Blockchain buyers: The transparency revolution coming to your shopping experience

http://www.news.com.au/technology/innovation/inventions/blockchain-buyers-the-transparency-revolution-coming-to-your-shopping-experience/news-story/f5606c2f15b80c8e57503aa6064332b6

A NEW technology is set to revolutionise how we shop and the products we buy, giving more power to Australian consumers to know exactly what they’re getting and where it came from.

It might take years for it to fully infiltrate the retail and produce sectors, but a relatively new type of digital technology known as blockchain is tipped to become a common part of the modern shopping experience.

So what is blockchain?

Put simply, it’s a kind of decentralised digital ledger that records transactions and information both chronologically and publicly and is shared on an online network

Importantly the records cannot be changed and are incorruptible. Blockchain is the technology that underpins notorious cryptocurrency Bitcoin and uses a form of math called cryptography to ensure that records can’t be counterfeited or altered.

So how will this apply to your grocery shopping?

If the system spreads through the retail sector — like Microsoft and many other tech companies are currently working towards — it means consumers would theoretically be able to scan a particular product with their smartphone and see the journey it took to get to the store shelf. For instance, customers could see how long “fresh fruit” took to get from the farm to the shelf and whether it was ever frozen.

It could quickly show you where, when and how a product — such as a T-shirt in Kmart or a bag of fair trade coffee beans — was produced and shipped to you, says futurist and digital consultant Chris Riddell.

“And the same goes for fresh fruit and vegetables, we assume that your produce is organic, you assume that it’s free range or you assume it’s Australian, and the reality is we don’t know where this stuff has come from despite what the packaging is saying,” he told news.com.au.

Australia does have strong regulations around food advertising and the claims a company makes about its product. But it is still possible for unfounded or embellished claims to sneak through.

In 2015 and 2016 two separate Australian companies were fined a total of more than half a million dollars for mislabelling their eggs as free range.

In fact on Thursday, the country’s peak consumer watchdog the ACCC urged businesses to review the country of origin labels on their products to ensure they comply with the Australian Consumer Law.

“Consumers are often willing to pay a premium for products that originate from particular countries, but they need to be able to trust the labels. Failure to label products correctly may expose a business to penalties of up to $1.1 million,” ACCC deputy chair Dr Michael Schaper said.

This is where blockchain technology comes in.

THE BATTLE OVER CONSUMER TRUST

Australian consumers are increasingly concerned about trusting the brands they buy and making ethical choices at the checkout. At the same time, trust in major brands is very low.

According to industry experts, with the growth in online shopping, the entry of players like Amazon to Australia and the rise of “influencers” spruiking products on social media, the battle for consumer trust is fiercer than ever.

“Blockchain is going to provide transparency to brands, everything from an avocado to a Nike trainer,” Mr Riddell said.

He believes it will become an integral part of your trip to the supermarket in the future.

“The competition now is around how can you show transparency and provide insight behind the brands,” he said.

According to a recent survey from consumer group Choice, 70 per cent of Australians are interested in ethical products and the advertising claims made on products.

At the moment, there are a number of apps designed to help Aussies make ethical choices when spending their money, such as the food-focused Shop Ethical! or the clothes-focused Good On You.

Many consumers are happy to pay a bit extra if it means they know more about the product, particularly when it comes to fresh food and meat products.

“Coles and the Woolies aren’t going to be very keen to do this, because it’s going to give a level of transparency behind brands that they don’t necessarily want,” Mr Riddell said.

But as we move towards a more interconnected world dubbed The Internet of Things, advances in chip and sensor technology will make it easier to translate data from the automated movement of physical goods, and could greatly enhance emerging blockchain systems, bringing them into the retail industry.

THE RISE OF BLOCKCHAIN

Blockchain technology got its start in the banking sector, but in recent years its potential utility has been applied to a number of other industries — and there is no shortage of global companies keen to capitalise on its use in the retail market.

US retail juggernaut Walmart is one of the biggest retailers in the world. It is currently working with IBM and a university in Beijing to follow the movement of pork in China by using blockchain.

A start-up named Everledger is using the technology to fight against the scourge of blood diamonds and help jewellers comply with regulations that governments impose on the conflict-ridden trade.

Microsoft and its partner Mojix had a booth at the annual National Retail Federation show in New York earlier this year where they spruiked how blockchain and IoT technology can provide “unprecedented supply chain and inventory visibility”.

In the UK, a start-up named Provenance tells prospective clients they can use its blockchain-based technology to “share your product’s journey and your business impact on environment and society.”

Meanwhile local Sydney-based start-up company called BronTech is working to find blockchain-enabled solutions to allow people to more easily gain access and share their personal data online, such as their medical records, in a secure way.

Emma Poposka is the co-founder of the company and believes blockchain has immense potential in creating trustworthy networks for sharing things like financial assets but doesn’t think it is suited for the retail and food industry.

She says while the interest in blockchain among Australian companies is growing, currently most businesses trying to exploit the technology are still in the proof-of-concept stage.

Ms Poposka is sceptical of the idea that blockchain is the way to bring transparency to retail supply chains, especially when it comes to recording the true origin of a product because people will find ways to manipulate what’s recorded in the chain.

“I know a lot of people are saying; ‘yeah you should use blockchain for this’ but I don’t necessarily agree with that. I think the transparency in the retail and food industry is not a technological problem.”

Other than using it to secure financial assets, “it’s a little bit tricky,” she said. “And I haven’t seen much progress.”

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