Is technology taking over our money? …and what does it mean for Retail?
In an era where tastes change by the day, opinions can be swayed by the argument of a stranger on social media and where trending news is too often a celebrity antic, it can be hard to figure out whether things are here to stay or not.
The Internet & Cryptocurrency
Think about the internet back in the day when it launched. Who would have thought it’d be the beast it is today? Sadly, for a number of high-street retailers that have recently closed their doors for the last time, they didn’t take it too seriously either; without the investment and commitment needed to develop an ecommerce platform, they’ve struggled to keep pace with the changing buying habits and expectations of consumers and paid a very dear price.
Or take the emergence of the internet’s very own currency and financial infrastructure. You may have heard terms like ‘bitcoin’ and ‘cryptocurrency’. You may not have; or you may get various spam emails telling you all about it in a way that makes you instantly not trust it. How can the internet create its own currency? It has, and it’s actually rather successful.
It has also created a new financial data infrastructure, called ‘blockchain’. Without getting too technical, this is a form of database that holds pseudo-anonymised data about financial transactions that is publicly available to view. Computers can join its network if they prove their capability by solving complex mathematical problems (at odds of about one in 5.8trillon) requiring programs that cost them significant amounts of power and energy (read: money).
“Exploring its capability more broadly, blockchain could also help prevent counterfeiting, especially of luxury branded goods, and secondary ticketing, as well as minimising the chance of insider threats and improve customer loyalty programmes”
That said, the financial industry has been successfully making use of blockchain applications for several years now and as the technology advances, it has the potential to transform a number of other industries, including retail.
Because of blockchain’s ability to allow transactions to take place without third party involvement, it has the potential to help retailers to better track the origin of stock, gives them better control over what they sell and provides assurances for food safety, among other applications. Blockchain can also be useful for controlling supply chains as changes to data such as manufacturing dates and locations can be tracked. This could help eradicate the use of unreliable suppliers, poor quality ingredients and child labour.
Exploring its capability more broadly, blockchain could also help prevent counterfeiting, especially of luxury branded goods, and secondary ticketing, as well as minimising the chance of insider threats and improve customer loyalty programmes.
“A recent report disclosed that by 2023, blockchain in the retail market could grow to $2.3 billion or at a compound annual growth rate of 96.4 per cent, which would be the highest forecasted growth among any blockchain-related industry”
This matter because as in all things retail, customer expectations are evolving and brands must respond to this. Consumers are increasingly more aware of the ethical and sustainable issues surrounding the products they buy. They want reassurance that the food is produced using sustainable methods and the garments they buy are not manufactured in a factory using child labour. And they also want to know that when they are parting with their hard-earned cash, that it’s a genuine product at the right price that they are paying for. Adapting blockchain technology will allow transparency and traceability – giving customers choices and confidence in retailers they can trust.
A recent report disclosed that by 2023, blockchain in the retail market could grow to $2.3 billion or at a compound annual growth rate of 96.4 per cent, which would be the highest forecasted growth among any blockchain-related industry. Blockchain technology may still be in its infancy, but as the technology continues to gain the trust of large retailers around the world, its potential to disrupt the retail industry is remarkably evident, and the demand for blockchain applications will undoubtedly rise in the years to come.
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