RTM

RESEARCH
APPLICATION OF
DOCUMENT
BLOCK CHAIN IN
RETAIL INDUSTRY

RAISH ALAM

1
 INTRODUCTION
When it comes to blockchain technology, brick-and-mortar retailers remain behind when it comes to
adoption in their organizations, although a shift in thinking is taking place. Recently, 4,300 business
executives across 123 countries representing 28 industries were surveyed in an MIT Sloan
Management Review and Deloitte’s Annual Study of Digital Business, to map the maturity of various
industries. According to their findings, the retail industry scored well below average for digital
maturity, pegging them as a prime candidate for implementing these technologies.

The ability of blockchain to track, trace, and authenticate products, record contracts, guarantee the
movement of information and record transactions means it can be put to use across the entire value
chain, with the benefits consequently being passed on to the consumer in the form of savings,
increased trust and transparency, and safer and higher quality products.

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 BLOCKCHAIN APPLICATIONS FOR RETAIL

ENFORCING LABOUR RIGHTS ALONG SUPPLY CHAINS WORLDWIDE

The International Labour Organization estimates that nearly

25 million people work in forced-labour conditions in and out of
supply chains around the globe, with 47% in the Asia-Pacific
region alone. To enforce labour rights along the supply chain,
Coca-Cola together with the U.S. Department of State, has
opted to use blockchain technology to ensure that labour
conditions along their product supply chain are ethical.

In Cotechini’s recent forced labour benchmark, 38 food and

beverage companies were assessed to capture the key areas
most needed to remove forced labour from their supply
chains:

 Commitment and governance

 Traceability and risk assessment
 Purchasing practices
 Recruitment
 Worker voice
 Monitoring and remedy

While most companies said that they have a corrective action process in place for their suppliers, only
three companies – Unilever, Kellogg, and Coca-Cola – could comprehensively outline their corrective
action process, including a means to verify the implementation of corrective actions.

REDUCING FRAUD AND COUNTERFEIT

Blockchain was originally created to prevent

fraudulent transactions in digital currency
exchanges, and retail leaders are now using
blockchain technology to prevent counterfeit items
from reaching consumers. The De Beers Group
uses blockchain to track their gems from mine to
retail, and records every time they exchange hands, reducing the risk of fraud, and giving consumers
greater visibility into the industry. inter-company databases can track goods and ensure counterfeits
do not enter the system. If someone tries to slip in a counterfeit, it won't match with previous records,
and if blockchain does anything, it accurately records and enforces the veracity of historical records.

TRACKING INVENTORY

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 Although blockchain wasn’t initially designed to help warehouses
improve and optimize inventory management, the technology is
adept at both of these tasks. Blockchain allows warehouses,
manufacturers, suppliers and production sites, distribution centers
and retail partners to connect to each other through a permanent
record of every transaction that takes place. All the records are then
stored and accessible to everyone within the network.

With such transparency, manufacturers are better able to manage

product origins, traceability, potential recalls and perishable goods.
Manufacturers can actually see consumer-level demand in real
time, allowing them to forecast demand accurately and plan
manufacturing and replenishment.
Before blockchain, inventory management was based on a reactive
model, where replenishments were ordered once inventory was
depleted, or a predictive model that estimated when inventory would
run out.

With blockchain, warehouse inventory management can forecast demand accurately and thereby
always have the right type and quantity of stock needed to meet expected demand. The technology
makes it possible to optimize revenue and profitability, while reducing the risk of lost sales.