Those of us with an eye on the future are becoming increasingly aware of the blockchain, a digital technology originally created to power crypto-currency Bitcoin. It’s predicted to transform communications between brands and consumers and radically alter ownership structures as we know them.
This is because of its core offering as a massively secure distributed ledger of transactions. It comprises systems and processes that work together, with anonymity, and without recourse to a third party such as a government or bank. As such, it is a technology that can be trusted by both parties. Consumers can trust the fact that their information is secure and they have complete control and anonymity. Brands can trust that the information is correct and unable to be falsified.
At its simplest, relevant sections of personal data held in the blockchain can be shared with the right brands. The brands you trust would be held on the blockchain. This could see major household purchases such as a vehicle, or a dishwasher, being shared with your trusted brands that can let you know about associated services and goods that are right for you, from insurance to cleaning tablets, while you – the consumer – remain anonymous and in control.
Several big institutions are looking into the blockchain; the Bank of England is investigating the technology and IBM is looking at how the blockchain can manage the huge array of connected devices that we are likely to see in the connected home of the 2020s eradicating the need to remember passwords for to 200 devices.
In fact it’s set to benefit marketers the most in helping them realise the age of ‘intelligent value’ that’s set to define how we use technology over the next ten years – not only in monetary value but reputations, social interactions, experiences and memories, relevancy to tastes and ambitions.
For example, the blockchain might be applied to the use and management of a car. The blockchain would underpin apps that monitor petrol consumption, realise when it’s running low, match this with information around where the driver is most likely to go at any given time then suggest a fill-up at a cheap station. The car would also link driving behaviour with insurance provider details enabling automatic insurance cover based on driving performance. All these elements could combine to tailor the advertising shown on a mobile or home TV. The blockchain provides a secure, distributed platform for all this data.
Similarly, in the FMCG world, the blockchain might see consumers buy their household products direct from P&G or Unilever rather than through a supermarket. As ecommerce, powered by optimisation algorithms, becomes the norm, consumers may question the value that retail intermediaries provide over and above the products themselves. Sidestepping the middle man would reduce the cost to consumers considerably.
Supermarkets might react by providing new and innovative Artificial Intelligence services to customers. These services, utilising personal data from the blockchain, could include managing health goals with a service linked to health data collected from a smartwatch. In fact consumers will gravitate towards brands that provide most value to them and will quickly reject those that don’t satisfy their needs.
But in my view the technology will have even wider ramifications. I believe the blockchain will transform ownership as we know it and have a profound effect on business and society in general.
Consumers will begin to borrow or hire products, rather than buy them outright. Storj is a company spearheading a data hire solution of this sort. It allows people to use the blockchain to rent out unused parts of their hard drive to other people completely securely, a sort of Airbnb for data. The company claims to reduce storage costs by a factor of ten.
The potential removal of the middle man, the increased expectations of consumers around value, and new models of ownership that the blockchain affords, will transform the role of brands. Marketers need to work out how they fit into this new world and think hard about how they might use the blockchain to enhance their value proposition to customers.
By Jean-Paul Edwards, Strategy and Product Development Director at OMD EMEA.
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