New Retail and blockchain have emerged as undeniably hot sectors of the tech industry over the past year, both drawing favor from large segments of society. Bitcoin and other cryptocurrencies based on blockchain technology, for example, enjoy significant investor participation despite major fluctuations in value.
Blockchain, one of the underlying technologies of the Internet, will likely continue to influence the day-to-day processes of the society we live in — just as the Internet and mobile Internet have done throughout the past decade. In its current stage, the retail industry widely connects to the Internet and enjoys high web-powered efficiency. Considering this and the inevitable development of new technologies, blockchain’s influence in new retail will likely be faster than we previously expected.
The basis of blockchain
Blockchain is an underlying technology of the Internet and provides the technological foundation for Bitcoin, which has become the representative blockchain application of the financial sector. Thanks to the popularity of Bitcoin, more and more enterprises are acknowledging and harnessing the potential of blockchain for other applications.
Simply put, blockchain is a continuously growing list of records, referred to as blocks, linked and secured using cryptography. Each block typically contains a link to a previous block, as well as a timestamp and transaction data within.
It is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. This can be widely adopted in peer-to-peer networks, no matter whether applied to trading, digital services, or other functions. Once data is recorded within a blockchain, the data in any given block cannot be altered retroactively without the alteration of all subsequent blocks, which requires collusion of the network majority.
The following are three areas of the retail sector that will likely be impacted by blockchain technology in the near future.
Blockchain Technology empowers an upgraded logistics service. Enterprises in China and overseas are embracing the new technology. These include JD.com and Alibaba in China, as well as Walmart and others in the U.S.
We can take BiTA (Blockchain in Transport Alliance) as an example. The technology was formed by experienced tech and transportation executives to create a forum for the development of Blockchain standards and information accessibility for the freight industry. BiTA brings together various companies in the industry with vested interests in the development of blockchain technology. Thousands of companies have applied for membership, including Chinese e-commerce giant JD.com.
Furthermore, Alibaba’s logistics service provider Cainiao along with Alibaba’s B2C online retailer Tmall recently announced the introduction of blockchain technology for tracking logistics. Thanks to blockchain support, customers can now check all product traceability information, which allows verification whether products are authentic and reliable.
Because of this, trading will be more transparent, whether online or offline, and trading can be traced via information contained with blockchain sequences. Application of the technology will likely result in an immense impact to the logistics industry.
Blockchain technology is also highly useful in the application of supply chains, especially in the case of cross-border supply chains. With the help of distributed accounting, data cannot be altered once its recorded, a protection that can result in a substantial risk reduction in supply chain counterfeiting. Additionally, in terms of cross-border supply chain management, blockchain technology works in a more sophisticated manner. Blockchain records a wealth of information including production, transportation, customs clearance, and so on, based on its distribution framework. All processes can be tracked and monitored, yet they cannot be altered.
These merits can go a long way to solve the problem of information asymmetry between buyers and sellers.
Blockchain technology can be utilized to dramatically improve trading efficiency, as well as bridge customers and producers. Since all information during production and transportation is recorded, companies can offer customized and authentic services. Previously, producers had to connect with customers via brands or other agencies. Now, blockchain technology enables producers to directly face customers, and ultimately offer personalized services.
In summary, blockchain is a new underlying technology with the potential to reshape established conventions of various industries. Its effect on new retail is just one of the many applications we’re likely to see in this new era of blockchain technology.
(Top photo from 699pic.com)