The Electronic Retailing Association

MCMS Speaker Insight Article: The application of Blockchain in Retail, Luxury Goods and Beyond

by Kanaway Yusingco

Blockchain seems to be appearing everywhere, but what is it and can it really make a difference to the retail and luxury goods sector?

Kanaway Yusingco, Founder and Managing Partner, Uniquely Wired

Kanaway Yusingco is the Founder and Managing Partner of Uniquely Wired, providing Tech Startups and Blockchain ICOs with talent and full stack marketing services. In the marketing division, she supports clients to identify what makes them unique and enables their success by defining their unique service and product proposition and helps them take this to market. She brings a human side to Blockchain, working with a number of Blockchain business and ICOs to develop their story in how they solve today's problems.

Kanaway has experience in a diverse range of industries including Blockchain ICOs, Tech Start Ups, Retail, Mobile, Connectivity, Banking, Insurance, and Finance, and was instrumental in one of UKs biggest retail merger in the retail connectivity space in 2016.

So what is Blockchain?

Blockchain is "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way" (source: "The Truth About Blockchain". Harvard Business Review)

Synonymously known with Bitcoin, this article looks more at the underpinning Blockchain technology and the revolution it is making across a range of industry sectors.

On a public blockchain, people can write entries into a record of information, and a community of users can then manage how the record of information is amended and updated. Many compare or give the example of Wikipedia entries which are not the result of a single publisher. No one person controls the information, but rather it is open and accessible to those on the public blockchain.

Each transaction in the blockchain will have a given digital signature, a public key, a timestamp, giving it a unique ID – which like past events in time can’t be changed.

What benefits does Blockchain bring?

So, what is all the fuss about? Why is every second word after Artificial Intelligence and Machine Learning … Blockchain? To understand this, we need to look into the key benefits that blockchain brings to the table.

Decentralisation

This is a core concept and benefit of blockchain. There is no need for a third party or intermediary to enable or confirm a transaction; instead agreed set of rules, or also known as smart contracts are used to confirm a transaction is legitimate.

Transparency and trust

As the inherent nature of blockchains are shared and everyone can see what is on the blockchain, this allows the system to be transparent and as a result trust is established. This, along with the fact that no one owns or has complete rule of the blockchain itself, provides the greatest benefits of Blockchain technology.

Security

In addition, with blockchain technology every transaction requires a unique identifier or key. The way the data is stored or written on the blockchain requires the data to be encrypted and saved into blocks for verification which makes it a secure and robust method of managing transactions.

Three ways to achieve blockchain

Initial application of Blockchain

Taking the benefits that Blockchain brings of Decentralisation, Transparency, Trust and Security, it has historically had rapid adoption in the FinTech sector by improving the transparency and speed of payments transfers resulting in significant cost savings by intermediaries.

Some well known players in the financial services sector have utilised blockchain to their advantage, here are some to name a few:

  • Deutsche Bank: considering the use of blockchain in currency settlement, trade processing, derivative contracts.
  • Citigroup: Utilising a distributed ledger technology enabled by blockchain and a test currency called ‘citicoin’.
  • Barclays Bank: Supports research labs in London for bitcoin and blockchain entrepreneurs, coders and businesses.
  • US Federal Reserve: Exploring a digital cash system using blockchain with the support of IBM
  • NASDAQ: Using Nasdaq Financial Framework, it has opened up its blockchain services to more than 100 of its market operator clients.

(source: marutitech.com)

Since then other industries have adopted Blockchain technologies to revolutionise their sector.

Take fine art as an investment market. Through the use of Blockchain technology players such as Maecenas and Look Lateral are revolutionising this sector by allow fine art as an investment class to be more accessible to everyday people through the use of a decentralised and transparent fine art trading platform built on blockchain.

This was achieved in three ways;

Blockchain signature tags
#1

Signature Tags

Through the use of a Signature Tag System such as Riddle & Code, that enables the clear identification of a genuine article by safely attaching a physical Signature Tag which cannot be tampered with, the fine art can then be identified as the real genuine article.

Blockchain Provenance System
#2

Provenance System

The signature tag unique identifier can then be stored on the blockchain where no changes can be made to that unique identifier without there being a known public record. As a result, there is an additional benefit of storing all the provenance information relating to that given item such as purchase price, purchase date(s), historical owners, etc. on the blockchain which is transparently accessible to all.

Blockchain Tokenisation
#3

Tokenisation

Finally, with the use of tokenisation, a method by which a single asset can be fragmented into digital tokens, allowing for individuals to own token(s). This makes it more accessible then before and allows more fluidity of transactions and trade.

Whether you take one or all of the elements of this solution, all are relevant and applicable to luxury goods and the retail sector. Here are some possible applications:

Recognising Counterfeit Merchandise

According to some reports, the counterfeit fashion market costs consumers as much as $450 billion each year. (Source: Forbes). Inherently the transparency that Blockchain brings can shed some light into the luxury goods counterfeit market. Be it an application of a signature tag that becomes a unique identifier to the luxury goods sold, which can then be stored on the blockchain along with the owner’s information, pairing them with the ownership of their item in a manner which that record cannot be tampered or overwritten without the right authorisation and being seen.

Clear Provenance and Value

The development and utilisation of authentication systems, such as Blockchain, helps to ensure clear provenance and valuation, while minimising the risk of fraud and counterfeiting.

For example, the diamond industry was one of the first industries to begin embracing the 21st century age of technology. By holding more providence information about the luxury good(s) on the blockchain, customers will not only see the additional value it carries such as in the diamond example its clarity, cut and weight, but they also know that provenance information comes from a trustworthy source.

A connection between Brands and Owners

Finally, blockchain can create an entirely new channel of communication between brands and customers. It is always challenging with today’s content saturated market to get a direct relationship with your customers.

Brands will be able to have an opportunity to have a direct relationship with their customers based on the products those customers have purchased. Previously it was hard to get consistency due to third party retailers not always capturing this information. Now through the drive to authenticate and create a secure record of their luxury item on the blockchain and pair this with its genuine owner, it changes the dynamics of certainty of ownership. In addition, brands will be able to share information to that customer to build a relationship with them, provided the customer has agreed to such communication.

At Uniquely Wired we are passionate about exploring how Blockchain technology revolutionises traditional businesses and industry sectors. Regardless of which of the applications you consider to apply to luxury good there are many beneficial applications of blockchain to luxury goods and to the overall retail sector, which can be harnessed to benefit both the end consumer and also the brands themselves.

There is no better time to begin exploring the endless possibilities that could ultimately lead the next innovation curve in your industry sector.

About Uniquely Wired

At Uniquely Wired, we fundamentally believe each individual and business is different, and that everyone has something unique to offer.

We help a range of businesses, identify what makes them unique and enable their success by developing their proposition to stand out with a unique differentiator to their competitors. We then support our clients to take their product or service to market through Full service marketing across proposition design, brand development, digital marketing, PR and Advertising.

Website: uniquelywired.com