Blockchain for Personalization, Opportunities and Challenges for the future

Opportunities for retailers include novel ways of delivering personalized coupons on the blockchain which cannot be duplicated or forged. This lowers the cost of delivery and management of the coupons. Retailers can also offer micro or nano payments in the form of coupons on the blockchain or cryptocurrencies to reward their most exceptional customers. Additionally, retailers can switch from current commercial payment systems to cryptocurrency, which is based on blockchain. These would alleviate some of the tensions between retailers and credit card payment gateway systems regarding commissions and fees. Similarly, customers can monetize their intent and personal data such as preferences on shopping styles, food allergies, cuisine preferences, vacation plans and even what books and movies they like or read. While customers today think twice before sharing any personal information online, blockchain would give them an added assurance that their data cannot be easily tampered with or compromised – perhaps allowing them to warm up to the idea of sharing more of their personal data.

There are also some headwinds in this direction such as scale, investor interest, trust, and regulation. It has yet to be seen whether blockchain can scale up to meet demand, especially considering the billions and even trillions of offers which are in use today. Currently, transactions on blockchain are expensive and take significant computing resources to store and process, which could hinder practicality on a large or massive scale. The second challenge is whether retail businesses are ready to invest in having a dialogue with customers for their data. When confronted with competition from blockchain technology, data aggregators could fight this switch by stepping up and having the conversation with the customer themselves, drastically improving their current data feed. Small and medium-size businesses might perhaps use these enhanced data services instead of directly investing in the blockchain technology. Trusting the customer to tell what is best for them is also fraught with risk. For example, the customers might identify their preferences for healthy food such as salad, but a look at their shopping cart would show pizza or some other indulgence. The regulatory agencies will also need to catch up with blockchain regarding the standards to store personal information. While there are currently standards for storing credit card or medical data, there still needs to be work done to come up with standards for storing personal data on blockchain.

Overall, blockchain has the looks of a disrupter. However, we are not entirely sure that it can deliver on all the promises and potential opportunities. Retailers need to be cautiously optimistic about this disrupter, keep themselves updated and invest in the necessary R&D to look to reap the benefits of early adoption.