Blockchain is Already Busily Improving Retail Analytics for The Little Guys
Currying favor from customers in the 21st century requires a multifaceted approach, and depends on optimizing every link of the retail supply chain to ensure that the experience is unparalleled. As such, the field of analytics is central to retailer efforts to garner a better understanding of their clientele and facilitate improved interactions. However, access to these granular insights about customer trends and preferences is mostly limited to large companies and industry gatekeepers. Even when smaller shops work to promote themselves by using 21st century commerce tools, this asymmetry grows even greater. While LivingSocial and Shopee are attempting to level the playing field by helping bring customers through the door, they oftentimes put their merchant customers at a disadvantage by restricting the flow of valuable data.
With companies seeking to look beyond the short-term boost that discounting and promotional activities provide, blockchain is stepping out the shadows to deliver the best possible solution for the entire retail industry. By building upon its attributes of decentralization, democratization, and disintermediation, blockchain could not only shift the balance of power away from the central data purveyors, but also engender a more level playing field.
Data’s Role in Refining Retail
The growing dependency on data is especially evident in the retail sector, which must routinely adjust and adapt to changing consumer preferences. With the need to constantly review figures related to inventories, purchases, loyalty, and other trends, data is playing an increasingly outsized role in the retail decision-making process. Predictive analytics available from business intelligence tools are especially popular, specifically when it comes to identifying sources of future demand for items during the holiday season. Analytics can also improve supply chain efficacy and efforts to ensure that products meet strict quality control standards. DAG technologies like IOTA’s can aid these efforts, building connections between interspersed IoT devices to collect and aggregate data which can eventually go towards streamlining the value chain while identifying areas for improvement to alleviate potential bottlenecks.
Finding efficiencies is an activity for which analytics is perfectly suited, but the data itself is not always accessible for all merchants. For instance, location-based promotional activities are a hugely popular tool amongst businesses seeking to drive traffic to their stores, using an online coupon that can be redeemed in store. Apart from the obvious benefit of increasing retail traffic, it gives many smaller businesses a perfect opportunity to introduce their products and services to new customers eager to take advantage of a discount. However, this is where the benefit for businesses generally ends.
Centralized purveyors of these discounts like LivingSocial and Groupon are undoubtedly providing a service that can help businesses drive value, but ultimately, they are the major beneficiaries of these efforts thanks to the data they collect. Details about the shoppers themselves, preferences, and buying habits is all valuable information that is not shared with the participating retailer. Furthermore, the gains for retailers are often one-off jumps in activity and store traffic instead of fostering longer-term relationships with customers. Without access to their valuable data, retailers are oftentimes paying to erode their margins instead of gleaning insights that could conceivably help improve their value propositions.
Revising the Existing Value Exchange Model
Although oftentimes value is simply denominated as currency, blockchain is upending our understanding of how value is transferred between and redefining what value even means. It is not to say that LivingSocial and Groupon are necessarily bad, but rather that they aren’t always advancing the interests of all stakeholders. Without being able to access the more granular data about the customers walking through their doors, merchants’ disadvantage in relation to larger peers grows palpably. Blockchain’s innate benefits like disintermediation and decentralization ensure that the gatekeepers that currently preside over this valuable data will gradually see their grip loosened.
Put in the context of consumers going grocery shopping, more individuals than ever before want to know the source of their produce and proteins. To help them understand the entire chain of custody from farmer to wholesaler to grocery store, Provenance has built a system designed to increase the trust and transparency across the entire logistics supply chain. Apart from helping businesses handle logistics, customers can buy with greater confidence, cultivating a closer relationship between all the parties in this retail experience and improving the collective confidence in the system. When combined with a system like Wave which helps monitor the entire supply chain, helping keep all paperwork in a single location to avoid duplicates, forgeries, and the possibility of disputes between suppliers that ultimately impact the merchant and consumer experience.
Apart from the supply chain possibilities, the relationship between retailers and their customers is also ready for a blockchain-based revolution. Retail engagement platform HotNow has built a gamified platform whereby merchants and customers build a more direct relationship, engaging in mutually beneficial activities. In exchange for completing an in-app game, posting on social media, or even writing a review, consumers are rewarded with HoToKeN for their efforts by participating merchants. These merchants are not only getting better exposure to help them expand their outreach efforts, but also able to bring online traffic offline into their retail outlets with the promise of promotions and discounts. Furthermore, they can better understand the efficacy of their efforts by accessing all the accompanying data without the restrictions imposed by other location-based advertising purveyors.
With greater insights and the data to support their decision-making, smaller merchants can fine tune or pivot depending on the preferences of their most important stakeholders without being at a disadvantage relative to bigger peers. In addition, blockchain-based services eliminate the need for intermediaries to collect and distribute the data thanks to the transparency of the distributed ledger, helping reduce the barriers for analyzing this valuable trove of information. With no gatekeeper lording over the most valuable data, merchants can freely improve their services without being beholden to the largest data collectors operating across the web.
Blockchain As the Great Retail Equalizer
The systems that were once the pride and joy of the entrenched retail giants are now filtering their way down to their smaller peers seeking to end the serious informational imbalance that currently defines the status quo. Even though these newer blockchain startups have a long way to go towards proving their efficacy in terms of aiding merchants, their efforts towards disintermediation and decentralization mean that a new status quo draws nearer with each passing day. With platforms designed to help streamline all activities across the value chain, while forging stronger connections between often disconnected stakeholders, the attributes that make blockchain so relevant will likely be the driving force behind greater retailer effectiveness.
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