How Will Smarter Technology Save Local Businesses?

How Will Smarter Technology Save Local Businesses?

Pixie is a blockchain-powered discovery, payment and rewards platform that’s tailor-made for independent businesses and the communities they serve. But are local shops and their customers ready to embrace digital payments, rewards and even cryptocurrencies? They’ll need to be if they want to get a head start on the ever-encroaching high street chains.

Independent businesses of all shapes and sizes – cafes, bars, restaurants, and retailers – plus their local communities are reliant on each other. Success is a two-way street. So why do they need a disruptive new tech like the blockchain to thrive? 

Despite the fact high street chains seem to be in terminal decline, their dominance remains real – particularly in city centres where the cost of renting a shop can be astronomical. As a result, independent stores are forced to set up in cheaper, less central areas. The kind of places which don’t naturally attract much footfall. 

Many don’t have a fighting chance, so they have to work harder to build a reputation for themselves – to ensure they’re known for their quality and service. But when so many other independent business owners are doing exactly the same thing, they require an additional point of difference. In short, to thrive they need to:

a) Provide different payment methods

b) Incentivise customers to visit their stores

c) Bolster their marketing efforts with richer customer data 

All of these options rely on having access to expensive technology – meaning additional capital outlay for already cash-strapped burgeoning businesses. Even tablet-operated chip-and-pin card devices can cost over £1,000 (when you consider the overall amount): costs that usually have to be pushed back on to the customer. 

Massive Costs for Merchants

Because their access to technology is limited, the majority of merchants don’t have the means to reward customers other than with basic stamp-and-clamp loyalty cards. As a result, it’s difficult for small independent businesses to use customer data in a way that competes with the CRM systems that big brands have in place. 

However, what independent businesses do have to their advantage is the fact that people love discovering new and exciting places to eat, drink, and shop. They want authentic, unique, and positive experiences – not the same bland and homogeneous fare they can get from any large chain. 

When it comes to payments, from a customer perspective, flexibility is key. With less reliance on cash, a lot of payment technology is now card-focused. But younger consumers – particularly those aged between 18 and 35 – are increasingly using bank-linked mobile apps to pay for day-to-day expenses. 

The Future of Independent Retail

Imagine being able to pay with and receive a ‘borderless’ currency at any independent store in the world – and being rewarded for doing so. That’s what a number of Fintech, rewards and shopping start-ups are investigating. Blockchain technology is key to these efforts. But there’s still a massive stigma to overcome. 

The problem is, the term ‘blockchain’ has become synonymous with Bitcoin, which is often portrayed by the mainstream media in a negative light: as either a ‘get rich quick’ initiative or a Ponzi scheme. And the bewildering number of cryptocurrencies coming to fruition – such as Ethereum, Litecoin, and Stellar Lumens – further confuse things for most. 

The main difference is that cryptocurrencies are built using blockchain technology, and ‘blockchains’ offer a secure way of storing and anonymising data – and creating shared value. When combined with mobile commerce, payments and rewards systems, blockchain technology can make data more accessible, verifiable, easier to use from a marketing perspective and more secure. Moreover, by incorporating token ecosystems into a particular technology environment, blockchains can process transactions and the transferral of value much faster. 

Staying Ahead of High Street Retailers

While some bigger brands are already investigating the benefits of using blockchain technology – such as Starbucks who’s developing a decentralised application (DApp) that will verify the source of its coffee beans – few (if any) are putting it to work in a meaningful way that will improve the customer experience.