As William Shakespeare so aptly stated, “What’s in a name? That which we call a rose by any other name would smell as sweet.” Brands conjure up a perception in your mind, one that is both factual and emotional.
They provide consumers with the promise of quality, of knowing what they are buying and of course, with the emotional tug of purchasing a brand synonymous with luxury, style or outstanding quality.
The world’s top brands spend billions on creating a specific market perception, influencing the way we feel about them. The ability to temper this emotional perception with the reality of transparent supply chains is now being provided by blockchain-based applications.
Blockchain technology enables consumers to purchase a product with full knowledge of its provenance – where it comes from, what ingredients were used in it, how and where it was packaged and manufactured, and who certified it.
All of this is verifiable through a unique product ID. In a global economy where products often pass through the hands of multiple players as part of their journey, such information is invaluable. Consider the potential impact on the pharmaceuticals industry, where counterfeit drug trade is rampant.
According to the World Health organization, more than 120 000 people die each year in Africa from fake anti-malaria drugs alone. The ability to validate the authenticity of products and track their source through the supply chain would help to save these lives and thousands more. Blockchain based verification allows us to do this, providing a consensus based view of the individual product’s journey.
It also provides the opportunity to ensure that no concerning practices such as slave labour, animal testing, human trafficking or irresponsible farming methods have been used in the production and supply of the products we use.
For consumers, this means you know what you are buying and where it (really) comes from. For companies, this means quality assurance, recall management and enhanced brand value.
The benefit of enhanced brand value is of course dependent on whether your supply chain is congruent with your brand. The shift towards understanding where goods really come from will have a profound effect on the way that we create and sustain brands.
The impact of creating positive emotional connections solely through marketing and advertising will be diluted by a fact based economy. There will be no room for greenwashing or causewashing. Companies that promote themselves as ethical or environmentally friendly and do not ensure their business practices echo the same sentiment, are perceived as hypocritical.
Not worthy of investment or loyalty. According to Mintel, 56% of U.S consumers will stop buying from companies they believe are unethical. Even more surprising is that 35% of consumers would stop buying brands they perceive as unethical; even if there is no substitute available.
The new generation of shoppers will support your brand if your company’s ethics align with their own and punish you if they do not.
And they will soon have the power to see this, with more ease and speed than ever before. The Provenance blockchain solution will soon enable consumers to search for goods based on their origin and sourcing. SAP Ariba, which connects 2.5 million buyers and sellers around the world through its network, announced earlier this year that it will offer blockchain record-keeping across it’s cloud applications.
The same visibility that is applied to the origin of goods could be applied to the prices that are paid at various stages of the supply chain. This would enable more equal value distribution among those who have contributed to value creation. Such practices pave the way to potentially change our mechanisms for wealth distribution, focusing on fair compensation for the creation of value and cooperation towards common good.
This could have widespread implications. According to the Guardian, if the fashion industry added only 1% of its profits to workers’ wages, a staggering 125 million people could be taken out of poverty.
Of course, companies will be able to choose whether to provide transparency of their supply chains to consumers, and how much information to provide. As more and more brands do open up high degrees of visibility, the question will become, if you aren’t providing transparency – what have you got to hide?
Organisations need to start thinking about the implications of a world of transparent provenance now. The first step is a long hard look in the mirror. If customers could see the full value chain of how your products are sourced, would they still purchase from you? Does your brand match your business practices? What provenance factors are important to your current and future customers, and how do you ensure your business meets these requirements?
Transparent supply chains present the opportunity for a fairer, more ethical society. They will inevitably make each of us face the question – what’s in a brand?