PwC analyst: Blockchain will revolutionise retail supply chains
Blockchain technology is set to revolutionise the way retail supply chains operate in the years, creating more transparency and security of data shared across partners and trading organisations, according to an analyst at accountancy giant PwC.
Speaking at the recent shop.org digital retail conference in Las Vegas, Scott Likens, a new services and emerging technology leader at PwC, said that an estimate by research group Gartner that blockchain will create $3 trillion in business value by 2030 was probably overly 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.”
“Blockchain is rewiring commerce and rewiring business, from the back office to the front office,” Likens told his audience. “Consumers want it because they understand that blockchain is important and different. Whether you lead or follow, start now, start small and think big.
The supply chain creates “huge opportunity” for blockchain, as its shared ledgers create much greater data security among partners and across geographies.
“It can unlock that potential,” he said Likens. “In the back office, it can take out (data) intermediaries. In loyalty programmes, companies can create secure extraprises connecting them to partners and drive out costs.” However, blockchain will create problems for entities whose primary role is as data intermediaries.
New kid on the block
Likens described blockchain as the “secure foundation” of cryptocurrencies. “Bitcoin was an intelligent way to test the security of blockchain,” he said. “It’s never been beaten. Any fraud or theft has happened outside the blockchain.”
He also likened blockchain as the new kid on the block, being no more than 10 years old, while other new technologies such as artificial intelligence (AI) dated back to the 1960s.
“AI’s challenge before now was data, but now there’s more than enough to fuel it,” Likens suggested. “AI thrives in blockchain. The Internet of Things (IoT) 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.”
Turning his attention to China, where he recently worked for five years, Likens said the country is adopting implementing blockchain more rapidly than the US and Europe, helped by the 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.”
Co-operation between Chinese business and government had shown blockchain to be the only cost-effective way to guarantee provenance and greater safety for food and health products from source to home. Likens added China’s consumers are willing to pay extra in exchange for greater peace of mind through guaranteed authenticity.