Blockchain Poised to Reinvent Retail Supply Chains: PwC

Blockchain technology will fundamentally alter the way retail supply chains operate in the coming years, a PwC analyst told attendees at in Las Vegas, creating more transparency and security of data shared across partners and trading organizations.

“Blockchain is rewiring commerce and rewiring business, from the back office to the front office,” said Scott Likens, a new services and emerging technology leader at PwC. “Consumers want it because they understand that blockchain is important and different. Whether you lead or follow, start now, start small and think big.”

Likens said there is a “huge opportunity” for blockchain in the supply chain, as its shared ledgers create much greater data security among partners and across geographies.

“It can unlock that potential,” he said. “In the back office, it can take out (data) intermediaries. In loyalty programs, companies can create secure extraprises connecting them to partners and drive out costs.” He added blockchain will create problems for entities whose primary role is as data intermediaries.

Likens said Gartner has estimated blockchain will create $3 trillion in business value by 2030, a figure he felt was conservative. “Eighty-four percent of executives say they’re doing something today in blockchain,” he said. “So, look around your table and figure out who that one person is that’s not involved.”

He said blockchain was the secure foundation of Bitcoin and other cryptocurrencies.
“Bitcoin was an intelligent way to test the security of blockchain,” he said. “It’s never been beaten. Any fraud or theft (with cryptocurrency) has happened outside the blockchain.”

Compared to other hot technology categories, Likens said blockchain is the new kid on the block, having been created about 10 years ago, while AI has been around since the 1960s.

“AI’s challenge before now was data, but now there’s more than enough to fuel it,” he said. “AI thrives in blockchain. The Internet of Things now gives you the ability to get more data from the physical world through device integration. So now IoT and blockchain become a compelling combination. Those three are no brainers to invest in.”

Having recently spent five years in China, Likens said blockchain is being adopted and implemented at a more rapid pace than the U.S. and Europe, with momentum created by government sponsorship.

“The government in China is very concerned about food safety,” he said. “Jack Ma felt Alibaba could do a lot to address it through a (blockchain powered) food safety network. From vitamins to milk powder, what happens to them along a complex supply chain? How do you guarantee authenticity? There are a lot of problems with counterfeit foods that the Chinese government wants stopped.”

Likens said business and government cooperation in China have demonstrated blockchain as the only cost-effective way to guarantee provenance and greater safety for food and health products from source to home. He added consumers there are willing to pay extra in exchange for greater peace of mind through guaranteed authenticity.

Luxury retailers in particular are seeing benefits from blockchain’s ability to thwart counterfeiting, Likens said.

“There’s a tremendous moment when you understand what happens to a product from beginning to end,” he said. “Provenance tells the brand story in a different way, engaging customers by demonstrating where it comes from. It can help take out fake goods from the secondary market.”

Asked how retailers can get started in blockchain, Likens cautioned that there can be challenges with an unknown technology that involves sharing in-house data.

“Create your own R&D lab, and try to attract talent that can bring it to life,” he said. “But how do you build it in an organization that doesn’t have a nice, easy way to stand it up? It crosses every area. You have to have someone champion it, and create real experiments, not just academic exercises. Find a willing partner and build an extraprise use case. A lot of (the technology) is open source and free; the hardest challenge is finding talent.”

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