Retail and Food companies are starting to look at how the technology could revolutionise their end to end supply chain.
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How is Blockchain affecting Retail and Food?
Blockchain allows transactional information to be stored, traced and traded securely and privately between multiple users. Beyond Bitcoin and Cryptocurrencies, there are a number of opportunities for the retail and food industry.
Food
Food can be traced back to its origin (for example right back to the fisherman who pulled a fish out of the sea) and (together with hardware technology such as RFID chips) can be traced through the supply chain in a secure and immutable way.
The technology can show not only the exact location of the product in real time but also where it has been, the checks it has passed and also information about the state of the product (e.g. which temperatures it has been exposed to) in a tamper and forgery-proof way. All of this can be accessed by the manufacturer/retailer and even the customer when they scan a code on the device at the end of the chain.
This approach will help to grow customer trust and brand reputation. There will also be improvements in supply chain efficiency and a reduction in risk. Businesses will have easy access to immutable evidence, allowing the easy resolution of disputes with transporters and manufacturers.
Luxury Goods
The luxury goods market has been one of the first to utilise blockchain in their supply chain. It’s easy to see how as this technology develops it will start to penetrate the general
consumer goods space.
Blood Diamonds
Paper certificates make provenance hard to verify. Blockchain is being used to create a ledger of diamond origin, helping to stop the spread of conflict diamonds. Using features such as clarity and colour an ‘ID’ for each diamond is created and stored on the blockchain. The diamonds journey can be recorded from mine right through to who purchases the piece of jewellery it is set in.
Second hand market
From designer shoes to luxury handbags, blockchain is enabling the tracing of the origin and authenticity of luxury goods – enabling a secure second-hand market.
Loyalty Schemes
Customer engagement is the corner stone of many companies success and loyalty schemes are often a huge part of this. It is widely accepted that many loyalty schemes aren’t fulfilling their potential - customers often feel it takes too long to accumulate enough points to redeem enough rewards, leading to high attrition.Blockchain helps multiple partners come together on a private permissioned blockchain, enabling them to offer unique customer experiences - whilst preventing fraud or compromising privacy. Large scale and small independent organisations can come together on one system and still control how their customers interact with their loyalty scheme.Warranty
Blockchain enables products to come with a ‘virtual warranty wallet’ which can be built on blockchain. It eliminates the need to prove the date of purchase and the product’s origin/ownership trail - making a claim against a warranty more simple and convenient.
Enabling entrepreneurship in unbanked areas of the world by receiving payments in cryptocurrencies. Blockchain based Land/Tax/Company registries already help entrepreneurs, especially in geographic regions prone to corruption/lacking regulation. Blockchain can enable new market opportunities and increase trust by participants in the market due to its secure nature
Have you thought about the legal implications of Blockchain?
Jurisdiction
- Which legal framework will apply?
- What forum should be used to resolve disputes?
- How do you govern entities that exist purely in cyberspace (known as “decentralised anonymous organisations” or “DAOs”)?
Liability
- How is ownership/control determined?
- Where does the liability lie when something goes wrong?
- How can businesses limit their exposure?
Smart Contracts
- How do you create a blockchain based contract (a “Smart Contract”)?
- When will Smart Contracts be enforceable?
- Can code determine issues of fairness?
- How should disputes be resolved?
- How do you govern decisions made by an AI?
Regulation
- How will regulatory authorities choose to approach blockchain?
- How will blockchain interact with existing regimes such as those relating to consumers or finance?
- How will tax laws apply to transactions a blockchain system?
Terms and Conditions
- What terms do you need to include to cover the particularities of blockchain such as payments in cryptocurrency?
Data Protection
- Who are the controllers and who are the processors?
- How can privacy be protected on an open system?
- How can you obtain all the necessary consents?
How we can help
DWF’s market leading retail, food and blockchain experts have come together to explore how Blockchain is disrupting the industry. We understand this complex technology and its legal ramifications and we are experts in the retail and food sectors, working with “more FTSE 100 retailers than any other law firm”.*
*The Lawyer’s Market Intelligence Retail Report 2016 DWF
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Hilary Ross
- Head of Retail, Food & Hospitality // Executive Partner (London)
- T: +44 (0)3333 20 32 10
- M: +44 (0)7712 899715
- F: +44 (0)3333 20 44 40
- E: wal.fwd@ssor.yralih