Digital Traceability & Digital Identity in Retail: An Introductory Guide

If you work in omnichannel retail, you’ve almost definitely heard the term traceable digital identity in conversations about the near future of your community. But it’s the kind of tech buzzword that’s easy to let float over your head because it’s usually explained in a flood of industry jargon that just serves to obfuscate. Here is your introductory guide to digital traceability in retail. 

Wait, What Is Digital Traceability? 

Before we get to digital traceability, let’s start with what exactly is being traced — the supply chain. When consumers buy a product, they usually think about two players in the interaction: the brand, and themselves. But in reality, it takes a long supply chain of different organizations and individual players to take a product from an idea to the consumer’s doorstep. For example, an apparel supply chain might look like this: a designer in Sweden designs a shirt —-> raw materials are spun into textiles at a cotton mill in India —> clothing is cut, sewn, and finished at a Chinese garment manufacturing factory —> inventory is transported to a US Warehouse via airplane —-> carriers like FedEx ship the shirt to a customer’s door anywhere in the world.

As supply chains get longer and spread further across the world, it’s increasingly difficult for consumers to know the holistic cost of their purchases, including environmental and ethical impact. It’s also difficult for brands to track and be accountable for their own inventory if there’s a problem. Digital traceability seeks to fix this problem by tagging every single piece of the chain with a traceable digital identity, a unique identifier much like a serial code. These can be easily integrated with blockchain technology, creating an immutable record showing every step of the journey an individual product took before ending up at a consumer’s door. 

So, imagine a world where before you buy a shirt you can see whether the manufacturer has been fined for breaking child labor laws, check whether the materials are authentically 100% cotton as advertised, and even calculate the emissions used in shipping. That’s digital traceability, and thanks to blockchain it’s going to be a reality a lot sooner than you might think.

What Are Its Applications?

1. Isolating problems for brands. Remember when Chipotle had a small e-coli outbreak and had to temporarily shut down a ton of store locations? It was a long term hit for the brand, which lost customers who still associate Chipotle with e-coli. If Chipotle had comprehensive digital traceability backed by immutable blockchain, they could have quickly traced the source of the infected plants, and seen exactly which stores received tainted shipments, avoiding unnecessary location closings and wide-spread panic.
2. Environmental Sustainability. Say you’re a consumer who wants to support the most sustainable clothing brands possible, so you buy pants made out of 100% recycled materials. The emissions used to ship the pants overseas actually creates exponentially more waste than is saved by the recycled materials, and a wiser choice would be to buy something new from a line made in America. Using digital traceability, you could calculate the full-scale environmental impact to make an informed decision and hold brands accountable to their sustainability promises.
3. Authentication. If you’ve walked down certain blocks of New York City, or perused their equivalent corners of the internet, you know that luxury brands have a real problem with fakes. If all of Gucci’s products have a traceable digital identity, it only takes a second to confirm whether your ebay purchase is the steal of a century or just stealing from you.

What’s The Tech?

Digital traceability is made possible by blockchain technology, like the Osa Unified Commerce Platform. Blockchain by definition preserves a perfect record of data changes, making it ideal for powering initiatives for increasing the world’s transparency.