Driven by double-digit growth, the logistics sector must face two challenges: guaranteeing the traceability of each product and its integrity throughout the chain.
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Two big challenges, while the volumes are racing, and its players must perfect their digital transformation to avoid any human error. of blockchain has been established for several years as an essential innovation for securing product transfers and guaranteeing unerring traceability. Better yet, NFTs – non-exchangeable token – clarify the responsibility of each actor and guarantee customer satisfaction. The explanations.
It’s a booming market: NFTs, these unique and non-repeatable digital certificates backed by blockchain to establish ownership. The global market has gone from $80 million in transactions in 2020 to more than $20 billion in 2021. It has already surpassed $18 billion in the first eight months of 2022, according to the reference site specializing in NonFungible NFT market analysis. Faced with this exponential growth, many brands – especially in the luxury sector – have committed significant resources to the development of their NFTs. The uses are already numerous.
Bring experiences to consumers
While there is indeed a craze around digital artworks, especially cryptopunks for speculative purposes, NFTs are also increasingly being used to provide services and experiences to consumers, sometimes in addition to purchasing a physical product. These are the so-called affinity NFTs. Thus, Decathlon has embarked on the adventure with its Kipsta Barrio project, a series of sneakers intended for street soccer players and designed in collaboration with Séan Garnier, world champion and three-time French champion of freestyle soccer. Each purchased pair is accompanied by an NFT in the form of a golden ticket. The latter gives access to personalized and exclusive experiences with the athlete. This reinforces the brand image. Finally, NFTs are becoming a tool for LOYALTY and customer insights, such as Starbucks, which rewards its best customers with limited-edition digital works, thereby creating innovative digital experiences.
NFTs are now entering the physical world with innovative use cases, serving business issues such as logistics. This fast-growing sector – 10% of French GDP and €200 billion turnover in 2021, according to a study by the supply chain blog info – driven by acquisitions, has experienced rapid digitization thanks to the opportunities offered by the Internet of things (IoT), in particular to optimize storage and supply chain monitoring. However, the sector needs to go further in its digital transformation to guarantee better product traceability and integrity, a real Achilles heel. Case management, order forecasting, difficulty finding a product… This lack of visibility puts pressure on all players in the chain. Logistics networks are in fact increasingly fragmented, with multiple parties moving the same product. And if the parcel is damaged or wrong, the sharp question immediately arises as to which link in the chain engages its responsibility.
Blockchain rhymes with supply chain
The solution may lie in the massive use of NFTs. By associating each transported package or pallet with a unique digital certificate, any status changes can be displayed in an ultra-secure manner, with no possible forgeries. Because thanks to the blockchain, every link in the supply chain can enter information under a contract that formalizes everyone’s writing rights. It is enough to give full visibility over the entire process and to guarantee particularly useful traceability for products whose value depends on several parameters: information on the production and storage of a bottle of wine, the origin of the raw materials and the production conditions for the luxury industry… in other words, blockchain is the way to create a single source of truth.
Security, traceability, liability
But NFTs go even further. At each stage of the supply chain, ownership of the NFT is transferred as well as responsibility for the physical product associated with it. By backing up the digital certificate and metadata associated with a parcel (technical characteristics, certificates, names of successive owners of the object, etc.), each player in the logistics chain becomes responsible for the transported product at the moment it is located in his place. Loading. French startup Ownest, which has made applying NFTs to the supply chain a hobby, talks about responsibility NFTs. These give real title: when carrier A transfers his cargo to B, he provides him with the corresponding certificate. Thanks to the tamper-proof information contained in the NFT, carrier B can verify the integrity of the goods. If the condition of the product is not in accordance (damaged packaging, temperature e STORAGE unsuitable…), he can reject it and, de facto, completely remove his responsibility. Therefore, this innovation not only improves traceability thanks to the blockchain, but also unmistakably defines each other’s responsibilities. And the use extends to all actors in the chain: suppliers, partners, customers, carriers…
Since 2021, Ownest has been working with the Cdiscount marketplace to track high-value packages using this NFT technology. Purpose? Monitor the transfer of responsibility throughout the journey of a parcel, from the warehouse to the end customer, to identify the actors responsible for the smallest complaint. After a successful pilot project, a 3-year contract was signed with the French market in 2021 to use the solution on 2.5 million parcels over 30 kg. This use case may become a school in the years to come.