Transparency 2.0: will Blockchain really let consumers see further and deeper?

May 31, 2017

GDR Senior Consultant Will Seymour on how Blockchain is raising the bar for transparency across all categories – and its impact on consumer expectations.

Transparency is important, and it’s becoming increasingly important to back up a claim of transparency with some kind of verification. Let’s look at two examples of these claims, quoting directly from their marketing material:

  1. Amazon Elements

We’re committed to sharing the details of our product stories, from the reason each ingredient is included to where they are sourced. Openness on this level is unprecedented, but we see transparency as our responsibility to you.

      2. bext360

bext360 utilizes machine vision and artificial intelligence (AI) to source high-quality agricultural products… bext360 makes digital/mobile payments to the farmers, communities, banks, and other stakeholders utilizing blockchain payments directly to the stakeholders. The bext360 system then tracks the goods from the source to the end consumer, allowing the end consumer to interact directly with the communities that provide the goods.

Now, let’s compare.

The first promise is a simple one. Amazon will, on behalf of all the entities in its supply chain – of which there could be thousands for any given product – tell its customers where everything that goes into those products comes from. Everlane does something similar with pricing, though not to nearly the same level of detail. It’s a compelling innovation, if asking consumers to place a lot of trust in Amazon’s honesty.

The second promise is slightly more complex. bext360 wants to give consumers very similar historical supply data (and add a friendly interactive mechanic which we’ll pick up later). The important difference is this:

Rather than taking their word for it, bext360 is asking you to put your faith in power of the Blockchain.

Let’s unpack that.

bext360 is just one of many brands experimenting with the blockchain as a means to secure and/or reveal the supply chain. Right now, a slew of blockchain startups are pitching their solutions to brands and retailers, promising a range of benefits. Everledger will cryptographically secure your diamonds or other valuable assets; at the other end of the price range, Provenance (pictured) is targeting farmers and non-profits.

How Provenance works

How Provenance works

The basic premise is the same: with the Blockchain (compared to traditional verification methods), supply chain records are distributed (rather than centralised); communication is peer-to-peer (rather than channelled through a single node); the network is transparent to every node (rather than submitting to a single authority); and the data ledgered within it are irreversibly generated and cryptographically fused to one another (rather than complied, authored, and published by the single authority).

As you can see, this all gets very complex very quickly, but these benefits are what the Blockchain offers to the supply chain. You can find out more here, but know too that the Blockchains we’re talking about borrow Bitcoin’s technology but don’t have anything to do with the cryptocurrency in implementation, and Bitcoin users even less.

With that out of the way we can return to the promise that bext360 is actually making, which is particularly interesting because while there are plenty of Blockchain startups hoping to disrupt your supply chain, there aren’t many consumer-facing companies who have worked out how to communicate the benefits of the Blockchain to ordinary consumers. Apart from slapping a buzzword on a product – and bext360 is also throwing AI into the mix for good measure – the company wants coffee shops to pass on claims like this:

Sourced from Huila Province, Colombia in March 2017. Directly supported “La Escuela de Los Niños” by donating 10% ($0.27). There is $63,243.81 remaining to complete this project. You will be notified when “La Escuela de Los Niños” is fully funded, when it opens, and when the first class graduates.

This comes direct from their website. There are some nuances about why this information and the conditionals within it are enhanced by Blockchain compared to traditional data gathering, but the main promise is simple: don’t take our word for it.

Why? Because of the Blockchain, this data is has been self-verified by the network, not the company.

So, the stakes are being raised in transparency, to the level where a brand’s noises will not only have to be the right ones, but will also have to be verified in the right way too. And I think we might rediscover how difficult it is to put toothpaste back into a tube; any company using the Blockchain is implying that they have the capacity to lie to you, and so does everyone else.

But does this really make the claim above any more trustworthy than ones made by, say, Amazon?

The data may be unfalsifiable within the Blockchain, but a chain is only as strong as its weakest link and the moment the information comes out of the Blockchain – the moment bext360 tells it to us – is when we once again find ourselves trusting a single author. Added to that, bext360 will only be implementing Blockchain where it wants to. If we’ve learnt anything from the various tech giants and their assorted PR disasters, it’s how easy it is to change the world with one hand and sign a pact with the devil with the other.

Is the Blockchain anything other than a reworded promise to be really, really transparent?

Technically, no. But that’s not really the point.

What’s important here is how consumers will find themselves thinking about transparency over the next few years. The need has been stoked by the public awakening to how complex and opaque global capitalism really is. On the other hand, expectations have been raised by the likes of Amazon Elements and Everlane: the genie is out of the bottle.

It may be that we’re seeing the beginnings of an arms race between brands in the premium space over the most resonant claim of transparency, and Blockchain is a new weapon with which to wage war.

Alternatively, it may be that Blockchain proves less convincing than the entity talking about it. It’s certainly hard to envisage anyone going to any lengths to try and explain the benefits I barely managed to squeeze into an extremely dense paragraph above.

I think we need to see the Blockchain and the startups using it in this way as a symptom of the new condition of transparent business, not the cure.

Blockchain makes sense in a world in which companies will start implicitly accusing their competitors of lying to consumers, in which consumers are cynical enough to ignore any ‘unverified’ claim you make, and in which brands and retailers will need to do a lot more than just promise to be transparent.

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