With a big enough database, it’s possible to determine highly specific actionable and profitable patterns in people’s shopping habits. a store recognizing that some women frequently purchase cotton swabs alongside their nail polish, for instance, might place these items closer together in the store to drive sales. The analytical connections don’t end there, as companies can draw real insights from seemingly unconnected pieces of data that will eventually contribute to the bottom line. The fields business intelligence and analytics exploded from this need by retailers to learn more about their consumers and do more with the knowledge.
What many don’t realize is that a disproportionately large amount of this valuable data comes exclusively from centralized gatherers like Amazon and Google. Blockchain is erecting barriers between regular users and these data overlords and is making it possible for the individual to choose their preferred level of exposure. With this increased decentralization also comes more precise targeting functionality. In the new paradigm, there are several ways that retailers can use blockchain to connect with their most relevant audience.
Don’t Knock Decentralization
A decentralized environment may be able to support the same processes that a traditional one can, but it does so in a vastly different way. Instead of routing traffic and drawing power from a centralized source like a server bank, decentralized networks distribute their resource requirements over a vast network of participants. Because data is no longer flowing through a single choke point, individuals can easily prevent others from seeing the data they produce. Blockchain applications grant people to ability to sell (and others to buy) their data in real-time, and for customers to share (or not to share) data from specific sources. These ideas are democratizing the datasphere for the better.
Companies like Groupon rely heavily on this type of data and use it to run a vital function of their business: targeting consumers. Ever wonder why Groupon emails will preemptively point you towards the best restaurants, even while you’re on vacation? It’s because they bought the knowledge that you’re currently in Brussels from Google, which stores your flight confirmation in Gmail. This is an expensive proposition for Groupon, and so the incentives that they can offer are limited accordingly. Groupon offsets these costs onto the businesses that advertise with it, and so the coupon often becomes a net loss for smaller and medium-sized retailers who cannot give away free meals or services, no matter how much awareness it spreads. Once blockchain becomes the new standard, they will need to do better.
A Rising Tide Lifts All Retailers
To fill these widening industry gaps, blockchain innovators like NAU.io are creating more effective, transparent ways for retailers and consumers to benefit mutually. The backbone of NAU is the simple idea that cryptocurrency is a suitable reward for those who spread the word about businesses who offer a coupon. NAU can easily find users who are willing to share their data in local areas, and offers them a reward for inviting other locals. New members who log in and take advantage of deals in their area activate a smart contract, which pays the recommending member from the retailer’s pocket. Transparent infrastructure lowers operating costs, and 95% of tokens paid by the retailer go towards the users who they rely on to inform others. This democratic system for distribution encourages better circulation of money between users and businesses.
Blockchain wipes the slate clean in the retail advertising industry, but it also inspires its users to stick with this new status quo. As soon as platforms like NAU gain a solid base of users, the middlemen who controlled the industry for so long will disappear.
Sharing the Platform with Users
Giving users a stake in their own data does much to ensure that the data itself is more pertinent, and more organized for those who need it. This notion is integral in retail, which is increasingly reliant on the ability to find users who are spread over many different applications, physical locales, and rungs on the financial ladder. While a few companies can already comprehend the degree of change that their industry is about to experience, like so many asset trading brokers, shoppers too will be caught by surprise when blockchain-based retail services take over their phones, but it will undoubtedly be a delightful one.
This post is part of our contributor series. The views expressed are the author's own and not necessarily shared by TNW.