Blockchain technology: the future of Retail & Luxury
Some of you may have heard about “blockchain”, a technology that was initially used for digital currency, such as bitcoin.
However, are you aware of the definition?
Don & Alex Tapscott in Blockchain Revolution (2016) defined blockchain as “an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
Probably now you are wondering: who invented blockchain? Referring to some articles, blockchain was originally invented by Satoshi Nakamoto, which turns out to be a pseudonym of a person or group of people. This invention created the backbone of a new type of internet, which allows you to distribute digital information without fear of getting copied – simply means a more secure transaction.
So, what makes blockchain more secure? The answer is its decentralized database, meaning the data is not just saved in a single location. The records are truly public and easily verifiable, for each user who has access to the system. This decentralized version creates a secure mechanism to prevent a hacker to corrupt the data or the database itself. That mechanism is truly what needed by many industries, such as financial service, healthcare, supply chain management, etc.
Then, what is the linkage between Blockchain with Retail & Luxury Industries? So, here are the blockchain functionality (including practical examples), that may be advantageous for your company.
Blockchain Against Counterfeiting
“Blockchain can do reconciliation regularly to its decentralized database, for securely store and the verify authenticity of goods.”
In luxury goods industry, counterfeiting always become one of the biggest issues. And up to now, most of the companies are still struggling to find the solution. Some technologies attempts that commonly deployed are:
barcode/ QR code
uses of special ink/ dyes/ papers/ label/ etc.
However, the above attempts are proven not effective in a long run, since the data is being stored in a central database. A hacker may hack and manipulate the data or the database, to create a copy or just to screw up the authentic special code. And to combat this issue, the company easily required to integrate the existing technologies (e.g NFC, RFID, Barcode, etc.) with blockchain platforms, to improve the security level.
Furthermore, blockchain technology also could be beneficial for food & beverages manufacturing & retail industry. An example to be considered is Highland Scotch whiskey distillery Ardnamurchan has partnered with digital tech firm Arc-Net, that provides scannable QR code on each bottle. This act gives importers and buyers with “absolute certainty”. It’s also impacted on health issues, to prevent sudden death by fake liquor.
Blockchain Supports Supply Chain Management for Security & Transparency
“Blockchain platform enables the company to easily track individual products, even parts, along with the journey from supplier to customer.”
Eventually, from all of the supply chain’ information, it will lead as a plus for the companies that focus either on sustainable products or company that get involved in #WhoMadeMyClothes campaign, by Fashion Revolution. It’s applicable as trust added and transparency for the brand, and as a storytelling medium for their customers to communicate how beautiful circumstances behind their products, and more further in the direction of referring as a standard expectation.
One of fascinating pioneer example is Martine Jarlgaard, a London-based fashion designer, in a partnership with Provenance on 2014. By attaching a unique digital token on each garment, all parties involved from farmer, designer, manufacturer, until customers can register and track each step on the blockchain via Provenance website/ application. That also serves as an e-commerce.
Blockchain for Exchange Goods Transaction
“Blockchain as a Distributed Ledger, that can help to give reliable details about ownership”
Blockchain allows quick and efficient identity verification process, without third-party support. Each user can closely and securely monitor their personal data. Have you ever heard or probably perform change ownership process for luxury goods? With this technology, consumers can clearly see the change ownership log of the goods.
In the meantime, the existing luxury goods industry, that involved in this technology is diamond ownership’s exchange, by Everledger. It’s a London-based company that has placed more than 1.6 million diamonds on a blockchain. The records listing on the system include the color, carat, and certificate number of the diamonds.
These are only 3 on-going functions of blockchain for retail & luxury goods industry. For sure, more companies will take part on the transformation along with a more mature infrastructure.
Article Courtesy of www.ftaccelerator.it