Black Friday is the biggest sales day in many countries around the world. Shoppers spend billions of dollars each day that this weekend sale runs with many spending hundreds if not thousands of dollars per person. This event could have a positive affect cryptocurrencies and blockchain adoption globally. In this piece I’ll go through a few of the main aspects where this might occur.
Global Payment Systems
What originally started out as an American holiday, has now become a global phenomenon which sees retail stores reduce prices across the board in both physical and online stores. Last year, approximately 50% of shoppers visited online stores and that number is only going to rise. The majority of online stores have the ability to reach a global audience but international payments and currency exchanges plague both the store and shopper. Some users can expect to pay as much as 10% in exchange fees or receive poor rates in lieu of fees. Should the user end up requiring a refund, they will never receive the same amount they originally paid due to changing rates and high fees. With cryptocurrencies, these concerns fly out the window. Fees for transactions on blockchain are generally a set amount and not related to the total transaction amount. Some cryptocurrencies have fees as low as a few cents even if the transaction is thousands of dollars. In regards to refunds, the amount sent back to the user can simply be the cryptocurrency amount sent in the original transaction as there is no need for exchanging currencies on either end.
Platform to Launch Loyalty & Reward Programs
One key distinguisher between online retail stores can lie in the loyalty or rewards program they offer. These can sometimes be partnered with other companies or be part of a larger conglomerate allowing users to spend their reward points at a myriad of stores, both physical and online. One of the largest limitations to some of these programs is location. They are often only available at stores available in certain countries or products useful for certain regions. During the Black Friday Sales, competition is fierce and any advantage could mean the difference between a slightly profitable day or leading the industry with maximum sales. Cryptocurrencies could provide that slight advantage in the form of reward and loyalty programs. Boundaries do not exist in the crypto world and integration into retail systems can be achieved with ease removing any limitation of location or border. This will truly allow retailers to market to a global audience with an advantage few have capitalized on to date.
Scalable Systems to Support the Demand
Throughout the year an online store may receive a small portion of customers and the majority physical stores will also vary in shoppers drastically depending on times, days and seasons. But there are few holidays like Black Friday which see an influx of over 100x the normal visitors. This mad rush can and has caused serious issues for both shoppers and retailers as systems struggle to handle the overload. Not only is there chaos in inventory management and processing transactions, but should any technical error occur, the system falls over costing retailers millions of dollars much to the frustration of would be shoppers. Blockchain in general has seen similar issues with scalability with examples coming from the CryptoKitty surge on ethereum and the EIDOS airdrop on EOS. But there are systems which do scale well and can provide the performance needed by not only cryptocurrencies, but also traditional and online retail stores. Aelf provides a base transaction speed of 15,000 transactions per second but also have contingency plans in place to counter any potential congestion that could occur on any individual chain.
Blockchain can also help in the efficiency of stock and inventory management. It is no secret that supply chain management is riddled with efficiency and compatibility issues.I’ve discussed here how blockchain can be used to aid supply chain management so I won’t go into too much detail in this post, but it has been proven that simply transitioning onto blockchain can save a company well into the millions of dollars of lost profit. IBM’s FoodTrust app already demonstrates this application to an excellent degree.
Tokenizing Items to Allow Easy Resale, Refund and Store of Value
High-end goods have always had to counter fakes and will have to continue fighting them in the foreseeable future. Blockchain has been applied in certain cases to help in this fight by registering items onto the blockchain. Due to the immutable nature of these blockchains, it helps protect the integrity of items, such as wines, jewellery and designer brands. Through this method, the resale or refund of items become a much simpler process. No longer do you need to keep the receipt of the item or proof of sale. The holder of the token associated with the product is automatically the true owner of it and it can easily be traced back to the store and date of sale.
It is events like the Black Friday Sales which provide a true platform for blockchain and cryptocurrencies to show their true value. Not only in relation to the financial aspects, but also supply chain, data management and other use-cases which blockchain has already been tried and proven. This is an exciting avenue where the use of cryptocurrencies can reach millions