High-growth businesses all have at least one thing in common: they readily embrace the new wave of digital technologies available. Companies that are slow on the uptake often fall behind, as the first ships to the swell take all the glory and benefits.
In the business landscape today, staying ahead of the curve is absolutely crucial. It’s too easy for consumers to take their business elsewhere and, with more online retailers popping up by the day, there is a lot of competition.
This is especially true for small retailers who are competing with giants in the industry, like Amazon and eBay. But this doesn’t have to be the end of the road for smaller businesses. In fact, the swath of new technology – including the much talked about world of Blockchain – is making it easier than ever for lesser-known retailers to scale and see success.
Think about it from a data perspective: Amazon and the likes have monopolized the market for acquiring and monetizing consumer data. We’re talking everything from specific shopping habits to global views and the health concerns of their users. Small businesses don’t get a look in.
But Blockchain is set to revolutionize this.
In fact, Blockchain is predicted to make all data trustworthy for everyone. Because it works from a distributed ledger, both buyers and sellers can clearly see the source of all information.
Basically, this means that retail giants like Amazon and eBay will no longer be the sole trustworthy source for important data, and small businesses can jump in and reap the benefits.
Introducing a Level Playing Field
If you automatically think of cryptocurrency when you hear the word Blockchain, you’re not alone. But such a transparent and self-reliant data infrastructure is useful for far more than just digital currency.
It essentially functions by allowing remote and autonomous consensus between users, which means that new products can be brought to the market quickly and cost-effectively.
This also eliminates the previous high costs of security and data storage, meaning that businesses of all sizes have a more equal chance of joining the big names at the top.
The Introduction of Smart Contracts
According to research, 40% of small businesses reported cash flow issues within the last year, making it a huge struggle for smaller vendors who rely on sellers and merchants to keep their business afloat.
But with Blockchain comes “smart contracts”, which automate transactions like never before. They essentially use Blockchain to create, monitor, and enforce contracts between retailers and their customers and merchants, whether that’s in the form of invoicing, handling fulfillment of inventory, or other transactional activities.
Because these new contracts leave no doubt about when funds will be released, businesses can go ahead and deliver their services and products with the knowledge that the funds will be available to pay their vendors when they should be.
Not only does this mean that smaller businesses will no longer have to pay huge fees to third-party companies to sort this out, but it means that the saved costs can be passed on to customer-facing aspects of the business which makes prices more competitive overall.
There Are Benefits for the Consumer, Too
It’s not just the founders of small retailers that will benefit from the Blockchain, though. In fact, there are even bigger benefits for consumers as a whole, who will no longer have to rely on giants of the industry for trustworthiness.
In fact, the direct data exchange that Blockchain brings with it will allow trust and transparency to be applied to all online transactions. This will give consumers far more choice than they’ve ever had and allow smaller retailers to dramatically cut costs – which, you guessed it, will challenge the power of their larger rivals.
Add to that the reduced overheads for smaller retailers thanks to cheaper security which will lead to prices being slashed for consumers, and you have what might be a win-win situation.
Will Small Retailers Rise Above?
While we’ve laid out the clear benefits that small retailers will see when Blockchain becomes more widespread, it’s worth bearing in mind that it is a very new technology that is still struggling to get off the ground. Existing infrastructures aren’t quite up to scratch to support Blockchain’s needs, but that’s not to say that it can’t provide benefits in the not-too-distant future.
Over time, we can expect to see Blockchain (and a whole host of other new and exciting technologies) gain momentum and stability, which in turn will kickstart new ways of doing business for small and savvy retailers.
But, for this to happen, businesses need to actually start building on the Blockchain in the first place – without that, none of the benefits we’ve highlighted in this article are up for grabs.
At its core, Blockchain is a participatory and collaborative technology that only pays off (both physically and metaphorically) to businesses and consumers that choose to use it.
For a long time, a limited number of major brands have dominated the retail world, and will probably continue to do so for a little while still.
However, the future is bright for smaller retailers who have been struggling in the shadows of their larger competitors.
Smart contracts that cut third-party costs and improve cash flow, increased transparency in online transactions, and more secure data storage are all positives for the retail world.
By bringing these things to the forefront, Blockchain has the power to eliminate any hierarchies in the retail world and create a much more level playing field that has room to accommodate everyone, however big or small.