Blockchain for Trade Promotion Execution?

The hype around blockchain technology is growing because man continues to seek the next best thing. The question is whether this radical new way of transacting business is applicable to trade channel promotion.

I’m sitting on my veranda in the hot Texas afternoon drinking my ice tea and mint leaves, turning the ribs every 8 minutes and reading my latest book. No, it’s not the tales of the old Royal Navy’s Captain John Aubrey or the latest Mitch Rapp novel; not today. I just cracked open my recent Amazon delivery of Mark Smith’s book, Blockchain: Step By Step Guide To Understanding The Blockchain Revolution And The Technology Behind It. This is a topic for one of our supply chain share groups; and Lora Cecere, our founding CEO challenged me to apply this new technology to trade channel promotion.

A blockchain is a connected matrix of individual packages or “blocks” of transactions that represent a present set of actions. Upon completion of the transaction string, the block is connected to the block before it, and, therefore, the basis for the nomenclature, Blockchain. Each block is totally secure and is forever unchangeable. It is also visible to everyone – it is totally public access.

Blockchain is the framework or data structure that was created to house the transactions of the digital currency or “cryptocurrency” like bitcoin. Never mind how THAT came about, you can look that up in your own book…or online. Suffice it to say that there are obvious applications in the financial services industry. And if you’re thinking about the Book of Revelation and are concerned about one-world currencies, well, yep, that is certainly how it may come about.

But how is this blockchain technology of any interest to trade channel promotion? Well, if you are thinking that it may serve as a new mechanism to pay for trade promotion, I think not. Remember, I said it was secure, but also it acts as a digital ledger completely open to public inspection. That won’t fly for any supplier. But how, then, can the blockchain technology be applied to the business and process of trade promotion?

Big Data, for one.

Right now, the scramble is on to build powerful databases and hardware to crunch data like never. Having the consumer profiles and shopping data that exists in the way of point-of-sale data, consumption data, marketing and social media data, and customer service/satisfaction indices gives us a virtual bottomless well of data from which to draw promotion insights. We struggle to make this data available, and at great cost. But what if each transaction, including online search, Facebook and Instagram posts, complaints, compliments, satisfaction survey data, consumption and market basket data were all on the blockchain network? Anyone has visibility and usage of the intelligence, enabling both buyer and rep to nail down stronger deals, to be sure. Marketing organizations would deliver more dependable and near real-time insights, and each retailer and supplier would be challenged appropriately to create the most effective consumer engagement possible.

Multi-tier Distribution, for another.

One of the oldest and still most painful problems in the trade channel is the lack of visibility manufacturers have of the end sellers and consumer point of sale when they sell through a multi-tier wholesaler/distributor (W/D). In fact, the W/D’s have that problem too; so, it is a universal issue. Aside from the fear the W/D’s naturally have of sharing too much intelligence about their largest customers such that the manufacturers attempt to sell direct, all parties suffer when critical intelligence is stifled. Not only does the manufacturer lose the visibility of sale pricing, competitive activity, merchandising and compliance, but the W/D suffers because of the loss of valuable data collaboration between them and the manufacturer that could optimize trade spending and improve ROI for both.  Doesn’t that make sense?

Enter blockchain.

Imagine if even some of the less revealing data like point-of-sale volume, merchandise and promotion compliance, inventory and store traffic could be shown at the market level, available within a transaction block and visible to all players. The W/D’s data could be protected (e.g. reselling margins, specific account/store branch locations, shipping logistics or other sensitive distribution data) and the data visibility would enable the manufacturers to collaborate more closely with the W/D to create more effective promotions and a clearer demand plan.

Tell-tale Coffee Maker

Now, let’s take it out a little further. Internet of Things (IoT) is booming in both technology and consumer application. We can already manage our kitchen appliances via the internet; but what if we have sensors in our pantry that reads RFID labels on the packages, jars and boxes with internal sensors that show the remaining product? Far-fetched? Nope. And think of THAT data spooling into a block in nanoseconds recording REAL consumption – not just some mathematical algorithmic projections of use. That is going to be highly visible, and…actionable! We are already thinking ahead here, as I have been involved in numerous conversations around the applicability of this type of data; and there is an entire industry springing up around IoT-ready consumer products.

Imagine this data – totally visible, accurate, secure and time stamped with no way to change or alter it – that’s my first cut at blockchain for trade channel promotion.

You must have some thoughts on this. And there is maybe a myriad of ways this conceptual view is flawed; but speculation around a new technology often becomes reality, doesn’t it? I would be very interested to hear your comments and get your ideas on other applications you might see for trade channel promotion.

Let’s be prepared.

 

 

Follow Me:  @RealRobHand

Rob Hand

Author Rob Hand

For most of my career, I have worked in four industries: Consumer Products, High Technology, Retail and Wholesale/Distribution. I was fortunate to begin my career with of one of the oldest channel promotion management companies in the world where I cut my teeth on the heart of consumer marketing around the business processes of co-op advertising, trade promotion and market development. Within consumer products, I covered all major sectors including fast moving consumer goods, fashion, DIY/Hardware, home furnishings, consumer electronics, retail telecom, oil & gas retail, automotive and beer/wine/spirits. I have formed and brought to successful outcomes three companies focused on these business processes and technology. I have worked with companies like Frito-Lay, Southwest Airlines, Intel, Hewlett-Packard, IBM, Nike, Sealy, Hanes, SABMiller, Anheuser-Busch and so many more – all of whom enabled me to build a strong cross-industry and cross-line of business viewpoint. I have guided the industry strategy and product management for companies like SAP and Oracle. Each of those companies gave me unique insights that have helped forge the way I look at every aspect of the consumer chain. My career has also provided me with a drive to be realistic in my analyses of observations and a pragmatic view of solutions. My parents blessed me with a penchant for hard work and an attitude that honesty is the always the best policy. I am a musician and a former NCAA football and basketball official; and I have a wonderful wife and children who continue to teach me something new every single day. I consider my opportunity with Lora Cecere and Supply Chain Insights as an excellent and inevitable channel to provide guidance, counsel and advice to a transforming group of industry leaders.

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