Despite recent hits, cryptocurrency still offers opportunities for retailers.
By David Wilkinson
Given the amount of crypto-related Super Bowl commercials that kicked off in 2022, it’s safe to say blockchain awareness and popularity is increasing among both consumers and businesses. Even with rising inflation, stock market volatility and higher interest rates causing cryptocurrencies to lose value earlier this summer, experts still predict that bitcoin could climb to be worth $100,000.
Cryptocurrency isn’t the only blockchain-based technology being adopted by consumers and businesses. Eighty-one percent of the world’s top 100 public companies used blockchain technology in 2021, up from just two in 2014. Use cases by these businesses vary as blockchain technology, known for its flexibility, is applicable to many different industries and businesses and can help improve operations and profits.
Below are examples of ways convenience store retailers can use blockchain technology—and not just cryptocurrency—in their payments, loyalty programs and inventory management processes.
Cryptocurrency and Payments
Convenience stores want to offer services that both banked and unbanked individuals can use, and crypto applies to both of those. Regardless of taking a hit in early June, cryptocurrency has lasting power and is expected to gain traction once again. Since consumers buy cryptocurrency, retailers are looking for ways to accept it at their stores and online. In fact, nearly three-quarters of retailers have reported plans to accept either cryptocurrency or stablecoin payments within the next 24 months.
For example, in 2021, Sheetz became the first convenience retailer to accept bitcoin and other digital currencies in-store and at the pump. Also that year, software, consulting and technology provider NCR Corporation agreed to acquire LibertyX, a cryptocurrency software provider, to give its retail customers access to buy and sell cryptocurrency, conduct cross-border remittance and accept digital currency payments across digital and physical channels.
In addition to giving consumers another payment option, accepting cryptocurrency allows retailers to interact with cryptocurrency markets themselves. Depending on the payments service they are using, retailers could immediately have cryptocurrency payments settled back in fiat.
Retailers could also benefit by awarding cryptocurrency to consumers through their loyalty programs. Most retail loyalty programs today are traditional earn-and-burn programs where consumers earn points or a reward as they shop. However, as consumers build up more points and rewards, that is a liability for retailers because consumers can “cash” in those points at any time. Retailers then have to redeem the points as a discount against goods and services.
By integrating blockchain technology and digital currencies into loyalty programs, the programs can become better assets and bring broader market value to both consumers and retailers.
First, retailers can band together to create a universal loyalty digital currency. As consumers earn loyalty points, they would actually be earning a digital currency that can then be used at more than one retailer, potentially decreasing the liability for a single retailer and improving flexibility for consumers. Retailers could also set up a blockchain exchange where consumers can swap one retailer’s loyalty points for another. For example, a consumer with Starbucks points could swap them for Wawa, Sheetz or Buc-ee’s points.
Additionally, one of the emerging innovations is self-sovereign identity, the ability for individuals to own and control their own identifiers and data. With SSI, consumers could house their digital identity on their phones. Then, if they are loyalty customers at several different retailers, the consumers will have the ability to share their preferences with those retailers and receive customized bids for their loyalty and purchases. This is a way for consumers to monetize their own data and preferences while preserving privacy.
SSI is part of the growing movement to create an open data collection standard across all retailers, doing away with the current diverse mess of different methods of data collection and creating one method that is easy for both retailers and consumers to use.
For the retailer, moving loyalty points onto a third-party blockchain network could unburden them of the heavy infrastructure and administration of today’s work-intensive loyalty programs.
A potential way blockchain technology can influence inventory is by reducing food waste, which the U.S. Food and Drug Administration estimates is about 30-40% of the country’s food supply. Retailers who sell food could leverage blockchain as a digital footprint of the details around when fresh food was delivered and the time since preparation, the custody of it all the way through the supply chain and how to optimize the life of the food.
For example, blockchain technology could provide greater visibility into sell-by dates for food. If retailers can easily track upcoming expirations digitally using blockchain, they can more easily run specials and promotions and push notifications around those goods before they expire.
Blockchain technology could also help with real-time inventory visibility. If each item in the store has a digital footprint, retailers could more easily track incoming goods and then match them to an inventory already in the store. This would allow retailers to make better decisions about their next orders.
The Future Is Blockchain
These are just a few of the current and future blockchain use cases for the retail industry. As blockchain technology is adopted and integrated into the tech stacks of more businesses, use cases will continue to develop and expand beyond what we can predict today. For now, the best way retailers can stay on top of the technology is by taking steps to integrate it into their payments, loyalty programs and inventory management operations. That way, they will be ready for additional developments as blockchain technology continues to grow and evolve.
David Wilkinson is president, NCR Retail, and vice president and general manager, North America Retail Sales, NCR Corporation. Based in Atlanta, NCR is a leading enterprise technology provider that runs stores, restaurants and self-directed banking.