Photo by Hitesh Choudhary on Unsplash
Cryptocurrencies tend to make a lot of headlines these days; usually, and unfairly, for negative reasons.
Any new technology is going to receive its fair share of criticism and skeptics, but that early pessimism often overlooks the upside those innovations offer.
It’s the same thing with blockchain and cryptocurrencies. Despite all of the hand-wringing that takes place about how the technology will disrupt the financial sector, its potential to bring positive changes to the world far outweigh its purported risks. Even in the early stages of global blockchain adoption, both businesses and consumers are starting to recognize the incredible value of using the technology as a catalyst for transformation.
Some retailers are already taking advantage by accepting Bitcoin and other cryptocurrencies as forms of payment. Online e-commerce sites Overstock, Expedia and Newegg are just a few that already take Bitcoin as a secured payment method. It’s inevitable that more retailers, including brick-and-mortar stores, will start accepting cryptocurrencies in the future. They have plenty of reasons to embrace blockchain and spur further crypto adoption.
Here are the biggest opportunities for retailers.
Improved Safety and Trust of Transactions
Blockchain benefits payments and transactions in several ways. First, since it functions as a distributed ledger, it makes it easy to track payments and deliver payments securely. Secure payments are essential for e-commerce brands, and blockchain allows for very secure payment platforms, e.g. with Bitcoin. The value of this security is even more significant when making cross-border payments, or when facilitating purchases from international customers.
Meanwhile, cryptocurrencies can enable purchases and transactions from consumers who currently exist outside of a payment system. As Forbes notes, this makes it easier to do business with international consumers, many of whom lack access to a financial system that facilitates cross-border transactions. Not only can security be an issue, but traditional transaction methods come with very high fees, whereas the cost for blockchain-based transactions would be nominal, even though the security is superior.
Tokenized Loyalty Programs
Loyalty programs are often overly complicated and require a lot of management and upkeep. Tracking rewards on an individual level is taxing for many organizations, even with a digital management system in place.
I think that blockchain will eventually be used to track loyalty rewards through the use of tokens, creating a low-maintenance, efficient, easy system for running a loyalty program. Consumers will also be able to update, use, or transfer their rewards in real-time, improving the customer experience. Through the use of blockchain, which is potentially perfectly scalable to serve any consumer base as the technology progresses, brands can implement an easy-to-use, fixed-cost system that treats rewards points like digital currency and increases consumer engagement with the rewards program.
Tools to Counter Knock-Off Products
One of the benefits of blockchain is its ability to authenticate purchases, transactions, even entire supply chains. While blockchain makes it very difficult to counterfeit cryptocurrencies, it also could be used to verify the authenticity of counterfeited products.
High-end retail items from luxury brands like Louis Vuitton, Rolex and Coach are in a constant battle with cheap knock-offs that replicate the brand’s logos and designs. Blockchain could be used to track a product’s progress from assembly through shipment and onto delivery, authenticating the product’s origins and verifying its status as a genuine luxury product.
Through this application, consumers would be less vulnerable to consumer product fraud, while businesses would gain better control of their brand and their products.
Combating fraud, theft and poor brand experiences remain ongoing challenges for retail brands. By leveraging blockchain and cryptocurrencies as part of their commercial strategy, retailers can improve their service to customers while enabling faster, more secure transactions.