Data analytics can be applied to virtually any supply chain process, and analytics hold great value in managing retail supply chains. Retail supply chains have the added complications of needing to offer both in-store and online customer experiences, and they must continue to try to beat Amazonian prices. Defining retail needs is not an easy process, but data is king and can help companies sift through the needs and wants of customers, reports Arthur Zaczkiewicz of WWD. Although data analytics help retailers make informed decisions, the potential of blockchain is worth considering as well.
Retailers Face Major Hurdles to Transparency, Omnichannel, and More
Retailers still struggle to maintain transparency with consumers. In e-commerce platforms, consumers expect on-demand order tracking, but the same concept may not apply to orders placed in stores. An item may be misplaced, or a single location may be out-of-stock for the items in question. In response, consumers are likely to review the business online and look for other retailers that may have the item in-stock. Additionally, the number of potential products has risen beyond recognition, and the average shelf-life of products seems to shrink at the same time.
For example, the fashion industry deals with products that have an inherent, short shelf-life. The next design and trend could become reality overnight, especially with the age of social media influencers. This leads to problems compiling reports, sending the unsold product back to manufacturers, and a decreased level of transparency. Consumers want the product, not the backstory, so retailers must find a way to increase transparency to provide better customer service.
An Introduction to Blockchain and Its Potential Benefits and Drawbacks in Supply Chain Management
Blockchain in Retail Enables Better Retail Management
Better retail management centers on omnichannel in today’s discussions, but omnichannel as a word is on its way out. Omnichannel will simply become known as standard procedure, says Jason Rosing, CEO of Veridian. It will be just business, but the ability to define product locations, give customers a seamless shopping experience, and increase profitability depends on transparency.
Connecting systems with consumer-facing e-commerce platforms will build seamless customer experiences, and since the system requires the complete history of a product, it has a natural implication for the use of blockchain technology. Instead of spending hours checking products to eliminate the purchase of “knock-offs,” retailers can enter a secure portal, provided via blockchain, verify product history and manufacturing, and complete their purchase. This holds additional value for consumers that want to order a product online from their favorite retailers. At its core, blockchain in retail is essential to creating seamless experiences and reducing negative customer interactions.
Top Ways Data Analytics and Blockchain in Retail Go Hand-in-Hand
The applications of blockchain in retail range from spending less time in the store to avoiding the dreaded Amazon conversion, a term used to describe consumers that abandon their carts in favor of Amazon’s pricing. In fact, Amazon carries a major risk as a retailer. According to USA Today, fashion accessories, handbags, and electronics make up the most common counterfeit products on the market. As a third-party marketplace, Amazon struggles to verify the validity of these products, says CBS News. For some manufacturers, selling parts under the namesake of an authorized retailer through Amazon is not an option. Amazon’s marketing algorithm will present shoppers with similar products that have the potential to be counterfeit. Of course, the obvious counterfeit products are removed, but the scope of Amazon means some may slip through the cracks. However, blockchain in retail could change that notion, providing any retailer engaged in blockchain platforms the ability to trace a product back to its origin or transfer of ownership through other sales. This is why the benefits of using data analytics and blockchain in retail can have a huge ROI.
For example, blockchain analytics, applying analytics to blockchains to derive insight across supply chain party lines, can have these key benefits, as noted by an Amber Road whitepaper.
- More informed sales associates will be able to help customers and understand what customers want and need to have a positive experience.
- Consumers can locate products faster, getting help from in-store associates, using personal mobile devices, or shopping from the convenience of their homes.
- Decentralized storage of blocks, even if appearing centralized through the cloud, reduces the risk of downtime in the supply chain.
- Omnichannel shopping grows easier.
- Consumers are willing to share data, provided it can be secured.
- Blockchain enhances returns management, providing a means of tracking returns and identifying issues contributing to higher-than-usual returns’ rates.
- Distribution becomes fluid, helping supply chain managers and distributors decide which products to send to different locations, based on increased accuracy in demand forecasting through data analytics and the transparency of blockchain technology.
Blockchain Will Become a Cornerstone of Effective Retail Supply Chain Management
Blockchain in retail is only on the cusp of innovation. Walmart, Amazon, Google, and Apple are working to unlock the power of blockchain technology in retail applications, which includes applications for better inventory management, manufacturing demand forecasting, customer experience management, returns management, validation of legitimacy, and insight into everyday operations. Blockchain analytics will become essential to effective retail supply chain management, putting the power of an incorruptible resource behind the possibilities of data analytics.