Blockchain and its related technologies have become buzzwords in daily conversation; in fact, data from market research firm Netscribes, projects the global blockchain technology market to experience a compound annual growth rate (CAGR) of close to 45 percent and reach $14 billion by 2022.
Blockchain has been riding this curve – especially in the retail sector, where cryptocurrencies and smart contracts can be deployed to facilitate new business models and economies.
Carrefour, for instance, has seen an increase in sales by making it possible for customers to track the provenance of some of its meat, diary, and fruit products. And thanks to this growth, the company plans to increase the number of products it sells using its blockchain platform which allows for greater transparency in terms of where the products are sourced from, where they were packed, among other variables.
This is only a fraction of what blockchain can do in the retail industry. Through this primer we want to have a look at how blockchain and particularly cryptocurrencies like PDX Coin can truly rewrite the retail sector.
Blockchain- Rewriting the Retail Sector
Despite its immense potential, blockchain is still relatively infant. Many start-ups and investors are considering the blockchain technology, but most of them don’t fully understand whether the use of the technology is really necessary.
So, how will PDX cut through this hype and truly rewrite the retail sector?
• PDX is Fully Transparent and Committed to Legal Compliance
Numbers from a recent Ernst & Young poll indicate 61 percent of senior professionals believe regulatory complexity is the biggest barrier to mainstream acceptance of blockchain, followed by integration with legacy technology at 51 percent and a lack of general understanding of blockchain capabilities.
Regulatory complexity has been a huge barrier to widespread adoption of digital currencies as payment methods in the retail sector. That’s why PDX recognizes that current digital currencies could not exist without trusted third parties, and therefore, will actively seek to foster that trust by providing transparent leadership and complying with applicable financial, tax, and currency regulations. It is committed to legal compliance for itself, the exchanges on which it trades and its holders, buyers and sellers.
PDX will be issued as a digital token on the Ethereum blockchain via the ERC20 protocol and each PDX token issued into circulation will be supported initially by independently certified oil and gas reserves, or oil equivalent. PDX will partner with leading globally recognized institutions (think audit, and petroleum engineering) in order to cost-effectively and securely build, audit, and monitor the pool of oil reserves benefiting all PDX holders.
And when you factor in data which shows sales tax avoidance by online retailers alone is worth close to $15 billon, then PDX could really come in handy. PDX could help online retailers to easily provide a record of their sales to tax authorities, reduce charges of fraud and potentially provide customers a simple way to attain tax refunds from their retail purchases.
• Settling Transactions in a seamless manner
Industry experts note that of the three main blockchain-based use cases – transactional applications such as smart contracts, cryptocurrencies and business functions such as logistics – cryptocurrencies are overrated, volatile and have no real value behind them.
However, PDX Coin is a totally different solution compared to other digital currencies out there. This solution wants to create a cryptocurrency-based payment model where, instead of exchanging cash to settle transactions, consumers instead pay for goods and services in digital currency and allow a vendor to receive immediate and guaranteed payment for a fixed amount of local fiat currency.
PDX use cases as a “disruptive” and a true global utility coin that is developing apps to make it extremely easy to make in-store purchases with retailers, as well as online purchases and bill payments, so that it’s as easy as using cash or a visa card today.
And unlike most fiat and digital currencies, PDX has the backing of underlying tangible assets, that is, physical reserves of crude oil and natural gas, and other energy assets. It offers all of the advantages of blockchain-enabled digital currencies while providing a verifiable asset base to protect its value, stability and security as a medium of exchange.
PDX Coin holders will be able to make instant payments and transfers anonymously, and instantly, anywhere in the world, and their data will be stored on an immutable blockchain, making it indestructible, and theft-proof.
Additionally, PDX is expected to have a much lower implied volatility as it is supported by proven hydrocarbon reserves in the ground, and at least half of those are in the US, a politically stable country.
Ultimately, PDX will allow retailers to use it as a means of exchanging value or data and thus seamlessly handle cross-border payments and micro-payments.
• Ensuring Transparent Payments and mitigating fraud
According to a Kaspersky Lab Global IT Security Risks Survey, a respectable 13 percent of more than 12, 000 consumers across 22 countries have used cryptocurrency to make online purchases.
Clearly, cryptocurrencies are going to revolutionize how payments are made in the retail sector and this will see more companies adopt them.
Smart contracts allow for transactions to be recorded over blockchain’s secure and encrypted platform, and this implies payments can be paid in near real-time. They allow the performance of credible transactions without third parties who charge extra fees for authenticating the transaction.
Loyalty programs, a crucial tool for enhancing customer loyalty, is another area in the retail sector that needs the attention of the blockchain technology especially when it comes to fraud. There are close to 4 billion users of consumer loyalty programs in the US alone, however, a majority of users (close to 60 percent) feel unsatisfied with loyalty programs or abandon them quickly.
Loyalty programs rely on less secure infrastructure which has led to a substantial increase in loyalty-fraud crime in recent years.
However, with a blockchain-based solution, personal data can be secured while a token-based rewards ecosystem open to third-party businesses can be created to provide customers with additional ways to spend their points. In essence, customers will be able to store all their points, rewards, and coupons in a single digital wallet, instead of managing multiple programmes.
The Bottom Line
Today’s complex business landscape means enterprises have to chart their digital future by leveraging the best-in-class technologies and developing a modern foundation for business.
Chandan Joshi, partner and global emerging markets leader for consumer products and retail at Ernst & Young, notes the blockchain technology would be rolled out across the financial industry in the next five to six years. The consumer goods industry is likely to follow suit largely due to the potential value that blockchain could bring in areas such as customer loyalty, retail and supply chain management.
We believe PDX, a “disruptive” and a true global utility coin, is going to revolutionize the retail sector in ways that we couldn’t imagine even a decade ago.
Want to learn more about PDX? Please check out this White paper.