When most hear the term blockchain, the first thing that comes to mind is cryptocurrency. And while it was initially developed to track the exchange of bitcoin, blockchain (also known as distributed ledger technology) has evolved far beyond its financial origins. Now, organizations across every industry are exploring blockchain for its ability to create an immutable, shared record of all business data and transactions.
Blockchain has become a hot topic, particularly among consumer brands and retailers. The technology has been projected to impact nearly every aspect of the retail landscape in the coming years, from payment methods and customer engagement to marketing and — perhaps the most promising application — supply chain management.
A Primer On Blockchain For The Retail Supply Chain
What blockchain offers is a way for brands and retailers to digitize and securely store all data on transactions and product movement — from source to shelf and back. The information is visible in real time, so all parties can see exactly what is being manufactured, shipped and sold at any given moment. Further, information logged on the distributed ledger is tamperproof, since no changes can be made without the entire network’s consent.
This level of transparency, traceability and collaboration makes blockchain an ideal solution to many of the tough challenges plaguing retail supply chains. Most notably, it enables brands and retailers to:
- Proactively manage demand forecasting, production planning and inventory replenishment
- Intelligently allocate inventory to the right sales channels and optimize retail space planning
- Verify product provenance and mitigate the impact of product recalls
- Support ethical and sustainable sourcing efforts
- Combat counterfeiting and grey market trading
Barriers To Blockchain Adoption
Despite its transformative potential, blockchain for retail is still largely in its infancy. While major corporations like Walmart, Target and Starbucks have been early adopters, a relatively low percentage of brands and retailers have actually invested in the technology. Moreover, many of these projects are still in the proof-of-concept stage rather than full-blown enterprise implementations.
There are several major barriers to widespread blockchain adoption: time, cost, uncertainty and complexity. Most systems available in the market today involve lengthy development phases and deployment times, often upwards of 12 months. They also require substantial upfront costs for new infrastructure — an investment many businesses are wary of making. Overall, many are simply apprehensive about implementing, integrating and learning a radical new technology.
But even in the face of these roadblocks, blockchain adoption in the supply chain is projected to rise dramatically. In fact, the 2019 MHI Annual Industry Report predicted adoption will grow to 62% in the next five years.
With Blockchain-As-A-Service, Getting Started Is Simple
Driving this growth will be Blockchain-as-a-Service (BaaS), which will make it easier than ever for brands and retailers to get started with their own distributed ledger. Using the popular Software-as-a-Service model, BaaS-powered supply chain management platforms eliminate the need for complex on-premise systems, since all users need to connect is an Internet browser.
Businesses new to the technology and unsure where to begin should consider BaaS for the following benefits:
- Rapid implementation: BaaS platforms streamline implementation and cut deployment time from months down to weeks. Instead of a new, large infrastructure, users simply need a device that can access the Internet. Setup and ongoing maintenance are handled by the technology vendor instead of placing the burden on in-house IT teams. In fact, an experienced vendor can plan, develop, test and launch a BaaS system in under 90 days.
- Simple integration: Instead of eliminating established software, BaaS platforms can be layered seamlessly into a business’ technology stack. This includes virtually any existing system for supply chain management, accounting, inventory management, procurement, e-Commerce, product authentication and more
- Affordable payments: BaaS deployment is affordable through low, subscription-based payments. This makes blockchain affordable for any IT budget, since users can pay in monthly installments rather than large upfront sums. And any system updates are included in the subscription, so businesses don’t have to worry about their system becoming obsolete as blockchain technology evolves.
- Ease of use: When implementing any new technology into operations, it can be a challenge to get internal teams on board with the change. BaaS offers user-friendly access through already familiar hardware (any computer, mobile device, tablet, etc.), which means a very minimal learning curve. Employees will feel comfortable and confident with the technology in no time, making for a much smoother transition.
- Scalability for the future: With BaaS, you can start small and expand as needed. The technology is flexible enough to be deployed at a level that meets current needs, and then easily scaled up with business growth. A single system can solve the challenges of today and satisfy the demands of tomorrow.
How Ruby Rockets Built Complete Supply Chain Transparency With BaaS
One great example of a BaaS success story comes from the food and beverage world. Ruby Rockets is a frozen treat brand committed to providing healthy, trustworthy products to consumers’ families and children. To ensure only organic fruits and vegetables were used in production, Ruby Rockets needed visibility to trace its products from farm to retail shelf. However, this level of transparency was just not possible with its previous ERP system. Looking into a product’s history involved piecing together a complicated, time-consuming paper trail of spreadsheets, certificates of analysis and other disparate records.
Instead, Ruby Rockets made the leap to blockchain with a BaaS supply chain management platform. In under 90 days, the platform was integrated with Ruby Rockets’ existing accounting system, purchase orders, inventory management system and online shop. Data on every transaction and all product movement is logged and instantly available to decision-makers, providing real-time visibility from ingredient suppliers to the consumer level.
Ruby Rockets can now quickly trace product origins and easily manage food safety, which ultimately builds greater consumer trust. And with real-time insight into what consumers are buying in-store and online, Ruby Rockets can proactively forecast and plan production for both channels. Just six months after launch, Ruby Rockets boosted productivity by a notable 20% while decreasing its order to cash (OTC) cycle by 15%.
Moving forward, new technologies like blockchain will be a critical part of the ever-evolving retail industry. Those that innovate today will be ahead of the game, prepared to proactively meet consumer demands and drive profitability. BaaS puts the benefits of blockchain in reach for brands and retailers of all sizes, so that both small startups and global conglomerates can start building the efficient, transparent and secure supply chains of the future.
Pratik Soni is an investor and a global executive with a career spanning the U.S., Europe and Southeast Asia. A natural entrepreneur with a track record of founding and scaling business operations, Pratik brings a wealth of experience in supply chain design, implementation, technology and business strategy as CEO of Omnichain. In the past 15 years he has held leadership positions for startups and Fortune 500 companies including i.am+, Apple, Beats Electronics, 20th Century Fox and Sears Holdings. Soni also holds board and advisory positions for various startups like Arlians, Venzee and others.