This document discusses using blockchain technology in the retail industry. It begins by defining blockchain and distributed ledger technology. It then discusses several potential applications of blockchain in retail, including improving supply chain transparency and efficiency through product tracking and traceability. It also discusses using blockchain for more secure and efficient loyalty programs, transactions, and financing activities like payments and factoring. The document argues that blockchain could help reduce fraud and costs while improving visibility, security, and the customer experience across the retail value chain. It provides examples of how blockchain might be implemented for specific retail use cases like recalls, warranty programs, and invoice processing.

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Fujitsu Forum
Retail Expert
Sessions

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Using Blockchain to Exchange Retail Value
Speaker:
Glen Koskela, EMEIA Retail CTO
Fujitsu

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What is blockchain / distributed ledger?
 Didn’t solve double-spending problem;
ledgers did, long time ago
 Bitcoin is not that decentralized;
Chinese mining controls >70%
 Financial services isn’t that centralized;
Eurosystem has ~2500 banks
 Confusion between “accounting system” and
“accounting unit” (‘Bitcoin’ and “BTC”)
 Difficult explanations: P2P, distributed
ledger, cryptography, consensus algorithms,
proof-of-work, smart contracts, game theory
A decentralized, append-only, sequential [inefficient] database
for storing transactions,
utilizing peer-to-peer computing,
(often) with anonymity,
using cryptography to seal blocks of transactions with immutability
where consensus between nodes governs synchronization.
Blockchain technology:
The result of a protocol
where all the nodes in a network
agree on a sequence of messages.
A platform for decentralized applications spanning trust(less) boundaries

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Narrative more interesting than technology?
 Didn’t solve double-spending problem;
ledgers did, long time ago
 Bitcoin is not that decentralized;
Chinese mining controls >70%
 Financial services isn’t that centralized;
Eurosystem has ~2500 banks
 Confusion between “accounting system” and
“accounting unit” (‘Bitcoin’ and “BTC”)
 Difficult explanations: P2P, distributed
ledger, cryptography, consensus algorithms,
proof-of-work, smart contracts, game theory
Chart source: What’s Next in Blockchain, CBINSIGHTS, 2019
Uncertain market
opportunity
Wide-spread
implementation
Conceptual
PoCs
Large addressable
market, early adopters

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Long-term promise still there
The ability to track, trace and authenticate
products, record contracts, guarantee the
movement of information and record
transactions means it can be used across
the entire retail value chain.
Programmable assets

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A look inside
Ruleset governing the system
P2P network implementing the ruleset
Records produced by the system
API libraries and GUIs
Specialized consensus algos
Membership policies
Gateway
Operations dashboard
Core APIs
Code execution environment
Ledger data structures
Modular consensus framework
Modular identity services
Network peers

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Retail industry: a magnet for ideas
Improving and protecting the
consumer experience:
smart loyalty programs, consumer
participation, automated after-
sales services, targeted recalls etc.
Improving process efficiencies
across the supply chain:
connected supply-chain (traceability),
authenticity of a product (brand),
delivery tracking, ensuring validity
and implementation of contracts etc.
Improving transaction processes and ensuring
the validity and implementation of contracts:
consumer payments, bidding for advertising space,
purchase records, ownership and attribution etc.
Analyst view: average retail industry value for cost savings ~1.5% and for new revenue ~2%

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Provenance/Authenticity
Provenance
Application Value drivers DLT role
Authenticity
Reinforcement
 Indisputable proof of the provenance of
products at every step in the supply chain as
part of CSR initiatives (materials, processes
and the people involved behind the
manufacturing process)
 Track and display supply-chain information
for transparency to fight the evil of
counterfeiting and verify a product’s identity
from concept to consumer
 Reinforce the origin and purity, accuracy of
ingredient listings, and value of premium
products, farm-to-fork
Provide reliable information to customers who
increasingly base their purchase decisions on
product content, origins, purity and authenticity
– a verifiable record from every legitimate
touchpoint in the supply chain
Counterfeit products exact a huge toll in the
form of lost sales and brand damage, caused in
part by the difficulty consumers have in
differentiating fakes from the real thing
Consumers are increasingly aware of and willing
to pay a premium for organic, gluten-free food
that has not been genetically modified, while
losing faith that these labels mean anything
beyond a higher price

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Transactions
Validity
Application Value drivers DLT role
Settlement
Security
 Ensure the validity of the exchange of goods,
money and data
 Reduced time and cost required to complete
and ensure transaction integrity
 Reduced risk of fraud
Connected
Supply Chain
 More efficient business relationships through
self-executing smart contracts (e.g. between
seller and customs authorities)
Ensuring business transactions substantially
reduces fraud and increases the efficiency of
business partnerships and frees significant
resources that can be redirected to more
valuable ways of working across the value chain
Speed the settlement process and/or reduce the
fees retailers and other supply chain partners
pay to banks and other third parties
Reduce the need for independent auditors and
in-house accountants and lawyers to identify
fraud and recover damages resulting from it
Enable manufacturers to order or sell, trace and
pay for goods once they arrive at their
destination, with confirmed receipt of goods
received (e.g. port authorities)

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Supply chain
Visibility &
Forecasting
Application Value drivers DLT role
Recalls
 Improve visibility into complex retail supply
chains, such as information on product status
and location, capabilities by consolidating
digital information into a single version of
the truth
 Expedite the process of recalls or service
bulletins by providing the critical, immutable
granularity needed to identify the issue and
contain it
After-care
 Easily collect, store and retrieve warranty
information
Lack of visibility causes over-ordering upstream,
which results in the bullwhip effect: demand-
supply variability that can inflate costs
considerably for upstream supply chain partners
Save by only recalling what is actually
contaminated, preventing lawsuits, shortening
investigations and maintaining accountability
throughout the value chain (unsafe food,
products with defective parts etc.)
Provide guaranteed after-care services and
warranties based on predefined contracts and
agreements and assists in warranty cases by
using e.g. virtual warranty wallet

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Loyalty
Smart Loyalty
Programs
Application Value drivers DLT role
 Make tracking points faster, cheaper, more
secure and much more visible to both the
owners of the points and the retailer issuing
them – and capture customer details and
behavior for more personalized targeting
Networked
Loyalty Programs
 Enabling multi-branded coalitions with
superior program liability management and
dynamic issuance/redemption options
customized for each unique relationship
Consumer Surveys
 Carry out surveys and competitions securely
and guarantee certainty of the data and
transparency of the process
Offer easy use of points at a variety of channels
in order to and increase willingness to buy,
thanks to the reward mechanism
Introduce interoperability to the currently
fragmented industry and enable multi-branded
coalitions and a variety of merchants, and
reduce the liability of the originating retailer
Let consumers participate in contexts that
required a high level of transparency and
security when e.g. expressing a preference

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Financing-Factoring
Factoring
Application Value drivers DLT role
 Real-time reliable view of transaction state
(POs, invoices, inventory assets, payment
obligations) to build a trustworthy and stable
supply chain ecosystem
Sharing
Economy
 Present an environment for safely and quickly
allowing monetary transactions, verifying
and changing ownership references, and
recording usage behavior
Consumer
Payments
 Facilitate cheaper, faster validation of
payments
Improve B2B trade financing through
automated release of funds triggered by
real-world events and/or replace traditional
letters of credit
Underpin a new kind of sharing economy –
cooperative purchase and maintenance of
expensive goods and their life-cycle services
Allow consumers to save time and money on
payments through the use of cryptocurrencies,
eliminating the costs currently incurred
by banks

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Eliminating the threat of invoice scams
 Cryptographically joining a buyer’s purchase order, any related payments and
all related invoice data from the seller for the entire lifecycle of the account
 Ensures an invoice comes from a legitimate source
 Ensures an invoice comes for an expected and legitimate purpose
 Prevents erroneous/fraudulent handing and multiple payments
Invoice processing done
from originating system
(Oracle, SAP, etc.).
Smart contracts validate
the routing.
Nodes can only see their
own invoices.

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Q & A