Blockchain is usually associated with the crypto currency Bitcoin. However, as a technology Blockchain can do so much more. Especially for the retail industry it not only offers a multitude of new possibilities. Digital pioneers can actively shape the future of trading with Blockchain.
Nowadays, before a product reaches its destination and is collected by its owner, it often has already travelled a long way. From the producer via wholesale, stationary trade or online distribution to your own living room. If you add its history of development from the raw material to the finished product, this path is extended by even more stops. Each stop involves a large number of intermediaries who come into contact with the product in one form or another. At this point at the latest it becomes obvious that trade is much more than a series of sober transactions, but rather a network of relationships based on trust. But what if this is lacking or insufficiently present? Can there be trust without trust? Blockchain is a digital technology that makes exactly this possible.
Trust is good, Blockchain is better
Blockchain is a communication medium that enables transactions between a large number of parties to be logged unalterably, tamper-proof and transparently. All data records, so-called "blocks", are linked with each other using cryptographic procedures and stored decentrally distributed over the network of all participants. Entries that have been made cannot be changed or deleted afterwards, thus preventing data manipulation. If new entries are added, they must also be confirmed by all participants.
Blockchain thus offers a decisive advantage over conventional storage solutions. While servers on which data is stored centrally are an easy target for cyber attacks by hackers or data collectors, a Blockchain network is almost untouchable by comparison. Due to this high level of reliability and resistance to manipulation, Blockchain is becoming more and more important, especially in retail. This is because the control mechanisms inherent in the system alone create trust in widely ramified trading networks.
Transparency from A to Z
In the luxury goods sector, for example, Blockchain can testify to the authenticity of an item. In order to be able to assign a product to its digital footprint with absolute certainty, it is given a unique physical characteristic, such as an identification number, an RFID chip, or a QR code. If such a feature cannot be applied directly to the product itself, it can alternatively be identified by its packaging. Ultimately, the concrete application is the deciding factor. Thus the history of a product can be traced seamlessly, from the production of the individual parts to the handover to the customer.
Setting high safety and quality standards
The same applies to the food sector. Has a product really been produced under fair conditions? Where and by whom was it marketed? Has the supplier maintained the cold chain? Without Blockchain, such questions can never be answered conclusively, as there is no tamper-proof evidence. Yet transparent evidence is essential in the interest of preventing health hazards. If a product enters the food chain by mistake or with fraudulent intent, the Blockchain can be used to determine exactly how it was produced, to which partners and third parties it was delivered and how it was further processed. In this way, an efficient and safe recall can be guaranteed in case of need.
Trade as a field of development
In order to further tap this potential of the Blockchain, Deutsche Telekom, together with its subsidiary T-Systems Multimedia Solutions and partner DATEV eG, has been researching a groundbreaking Blockchain platform since 2018. The so-called BIZZBLOXX project uses Blockchain technology for process automation and integrity assurance. The central objective is to simplify and automate supply chains and thus make trading and service activities even more efficient and sustainable. Practical expertise from the fields of e-commerce and logistics is provided by the research partners Otto Group and Hermes.
In a first version, DATEV and T-Systems Multimedia Solutions have developed a proof of concept with which documents required for regulatory purposes, such as delivery notes or invoices, are automatically generated by the system and audit-relevant facts are stored digitally in an audit-proof manner. While the focus is currently still on the classic delivery process, BIZZBLOXX is to be expanded to include all relevant business transactions in the future.
Read more about Blockchain, deployment scenarios and how this innovative technology helps drive new digital business models in our whitepaper.
Digitization will ensure the future success of retail.