Want To Increase Brand Value? Look To Blockchain
The answer lies in the power of transparency.
People often talk about authenticity in a brand. It has become more and more important for shoppers to see that their favorite brands live out the same values that they do.
And blockchain provides something that’s sorely lacking among brands at the moment — actual proof that sustainable, ethical, and responsible practices are being used in the production of goods.
Millennials and other sustainable shoppers want that proof.
If you look at the success of brands like Patagonia or Everlane — which are very transparent about where their materials come from and the conditions they’re produced under — it’s clear that the amount of people who want to buy ethical goods is growing.
Although many brands talk a big game, they don’t always walk the walk when it comes to labeling practices.
Brands have strong incentives to prove that their products are made in an ethical manner, without exploiting workers or destroying the environment.
Brands know that Millennials and other socially-conscious shoppers want to buy products that are responsibly-sourced.
So when you walk into a grocery store, there are labels and seals all over products that say “cruelty-free” or “sustainable” or “ethical.” They do it because that’s what sells.
These labels have become so common that they don’t even merit a second look. The playing field has been leveled. And with Millennials spending an estimated $1.4 trillion per year by 2020, brands can’t take labeling lightly.
Some companies believe if you don’t have “organic” stamped on a product, then you’re not branding your product correctly.
But consumers want to know that product label claims are actually true.
They want visibility into the chain of events that led to the stamp.
For instance, palm oil is the most widely used vegetable oil on earth, with a projected 66 million tons being consumed in 2018. Yet the growth of plantations that produce the oil is destroying huge swaths of tropical forests, mostly due to “slash and burn” techniques used to clear land.
Blockchain provides an opportunity for brands to transparently record where their palm oil comes from.
If they show it comes from sustainable sources, that in turn improves their brand value in the eyes of their customers.
Companies that can actually prove their ethical practices will have a leg up on competitors who rely on stamps and marketing gimmicks.
Brand value isn’t just affected by where products come from — it’s also affected by where they go.
The fact is, the way we currently mass produce goods is inefficient.
The supply is based off last year’s numbers, dubious projections, or whatever some new AI analysis can come up with.
It’s rarely accurate.
What happens when it isn’t accurate? If projections come up short, companies lose out on potential profits. If they’ve overestimated the demand, the planet gets a brand new infusion of garbage.
That’s not an exaggeration, either. Fast fashion outlets like Forever 21 and H&M have long been accused of burning or otherwise destroying surplus inventory.
Blockchain can help suppliers shift from an oversaturated supply chain to a demand chain.
We can move away from the concept of inventory to create a completely direct-to-consumer model, with goods produced based on the demands.
No faulty projections or inventory destruction necessary.
Ideally, all participants in the demand chain will be interconnected by a common blockchain backbone.
This is not just good for the planet — it’s good for brands, too.
It means more operational efficiency and less money spent creating excess inventory. Companies can also tell their customers that they’re actively minimizing waste and not over-producing goods.
Using blockchain, businesses can save money and become more efficient. Customers can feel good about buying their products. It’s a win-win.
But it’s also important to remember the people who actually make these products.
Customers may feel good about buying from a company that doesn’t destroy inventory, but that doesn’t mean the products themselves were produced ethically.
Blockchain can also enable decentralized, constant reporting and feedback systems for workers at every level of the supply chain.
Through tools like BetterKinds, companies can prove that the workers in their supply chain aren’t being exploited or working in run-down factories. And HR members can participate and align around the specific products and brands they’re helping to fulfill.
We’ll see greater worker satisfaction, higher retention rates, and real changes in the way that our clothing, food, and technology is produced.
The end game here is to create a circular economy — a closed-loop system where everyone in the demand chain is incentivizing each other to become more efficient, more sustainable, and more ethical.
We have the technology we need in blockchain. We just have to put it to work.
Thanks for reading!