If you’ve been keeping up with business news over the past decade or so, you’re probably familiar with the term “blockchain”. Investors and CEOs alike have been interested in this technology for a variety of reasons, but it is only just beginning to become ubiquitous in the conversation surrounding retail.
Grocers in particular need to understand the way that blockchain works, where it comes from, and how it can help their customers and their bottom line in 2020.
Where did blockchain get started?
Blockchain was originally created in 2008 as the backbone technology used to manage bitcoin. This digital currency was the first of its kind, and the foundational technology behind it was immediately intriguing to business people. What else could this tech be used for? How can we incorporate it into our business model in order to make more revenue?
The main way that retailers have used blockchain technology in their businesses is to track products through the supply chain. Transparency is becoming more important in retail every day, as are sustainable business practices, and blockchain can be an integral tool in not only talking the talk but walking the walk in both of these areas.
Who is using blockchain in the grocery industry?
The main utilizers of blockchain technology in the grocery industry can be found in one cohort created by IBM – Food Trust. Grocers like Albertson’s and Kroger, along with large brands like Walmart, Unilever, Nestle, Tyson, and Dole are members of this blockchain group led by the technology giant. It’s the first foray into using blockchain for food products, and it’s already paying dividends for the companies in terms of transparency and the ability to back up their sustainability claims. Each of the companies involved in the group require blockchain tracking from source to source throughout their supply chain, which provides them with easy-to-access data on their inventory in case of contamination, customer complaint, or even for marketing materials.
What are the pros and cons of blockchain in grocery?
The benefits of blockchain technology can be a huge boon for grocers. When they are able to use it effectively, they can access tracking information and provide accountability throughout the supply chain. Whether they’re concerned about produce contamination with E.coli, or are experiencing consumer backlash regarding business practices, blockchain technology allows grocers to point to the data and show customers exactly how they’re taking care of the problem. This increases trust between grocers and customers over time, which is integral to maintaining a thriving business in 2020.
The one major downside to blockchain technology in grocery is access. Those who don’t have the funds or the connections to obtain the technology or manpower needed to execute blockchain technology accurately won’t be able to take advantage of its benefits. There are, however, a few blockchain vendors on the market who are entering the food and sustainability space, so access may be less of an issue moving into 2020.
If you’re on the fence about blockchain, ask yourself this: would my customers trust my business more if I could provide them with transparent information about our business practices? Could tracking my inventory through the supply chain prevent health issues or customer dissatisfaction? In this case, the benefits may just outweigh the costs.