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Here, we discuss the grocery retail market and explore ways to cut costs and improve shopping experience with the help of a decentralized marketplace.

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The Problem

We find the grocery retail ineffective. The market is monopolised by corporations and concentrated around mega-chains. Today, national and regional retailers are dominating the landscape and squeezing out competition. Their abuse of power extends beyond a reasonable level.

Retail chains decide what to stock and how to market it. Their influence over suppliers, large or small, is absolute. They run costly promotions and often overlook the importance of food miles, food safety and quality. In fact, supermarkets throw out up to a third of what they serve.

This situation has not only been allowed to develop but also to thrive. It affects consumers on a day to day basis: retailers dictate the process from farm to fork, manipulate shopping behaviour and push up prices.

The Disintermediation

Local natural products are hard to find in grocery stores due to strict supply chain management and harsh procurement terms. Cutting out the middleman allows for ‘direct from the factory’ approach and provides consumers with control over what brands and suppliers they want to see available, including access to farmers’ produce.

An improved discovery process together with effective pull system and inventory management will help to decrease food miles and reduce the food waste throughout the supply chain. These problems are relevant to all regions and countries, and lead to significant financial and ecological costs.

We are on the mission to reinvent traditional distribution channels, replace a one way street type of communication with direct feedback and facilitate interaction between consumers and manufacturers. In this way, it will be possible to market directly to consumers, avoid inefficient trade promotions, and set up personalised rewards together with networked loyalty programs.

Bypassing retailers and wholesalers allows for a more transparent grocery shopping experience. Here, the blockchain technology acts as a ‘trust machine’. To put it simple, it provides a digital ledger of information that is validated by a peer-to-peer network of participants. Once a record is verified, it cannot be tampered with and is visible to all parties, including consumers.

In fact, every part of the product’s journey through the retail supply chain can be recorded and viewed on a blockchain-based platform. Transparent and verified information over how food is grown, processed, packaged, delivered, priced and promoted enables discovery and trust building mechanisms.

With a blockchain-based platform, consumers will be able to uncover the story behind a grocery item and make smarter buying decisions based on information about the supplier, food miles, delivery and storage conditions.

Apart from transparency, blockchain technology means security as it requires much less personal data to make purchases and complete transactions. The order completion process is automated with the help of ‘smart contracts’ that guarantee payment only upon delivery and offer proof of ownership plus complaint mechanisms to handle disputes.

All in all, a blockchain-based grocery shopping platform cuts out the middleman and provides consumers with the following incentives:

  1. Everyday groceries could get up to a third cheaper.
  2. Local grocery delivery will become simpler and quicker.
  3. Consumers will provide direct feedback to influence manufacturers.
  4. Consumers will have a straightforward access to verified information about grocery items and see their ‘journey’ through the supply chain.
  5. Consumers will get opportunities to participate in custom loyalty programs, earn different types of rewards, trade and exchange ‘points’.

We at INS Ecosystem have been thinking more and more about the future of groceries. We have identified and are acting upon trends in the food industry, e-commerce and emerging technology. With founders of Instamart, one of the largest venture-backed grocery delivery operators, top industry experts on the Advisory Board and recognition of FMCG giants such as Unilever, MARS, FrieslandCampina, Valio, Reckitt Benckiser we are set to challenge the whole notion of the grocery retail value chain. In order to do this, we are now working on an open source marketplace platform and building frameworks related to the decentralized consumer ecosystem. Here is how it works.

INS decentralized marketplace for groceries - How it works scheme

The Ecosystem

Here, we explore everything related to individuals or companies that want to buy high-quality groceries via the INS Platform. This includes key components and processes such as product discovery, placing orders, making payments with INS Tokens, receiving loyalty, referral, feedback rewards, and more.

Product Search and Discovery

Hooking up local and independent suppliers means tens of thousands products listed online. Browsing an overcrowded marketplace can be very daunting for consumers but there are ways to make the discovery process simple. One of them is to have additional parameters defined for products.

It is necessary to maintain an up-to-date database of items submitted by manufacturers and provide customers with catalogue filters for product attributes such as Local, Gluten-Free, Organic and On Sale. This will make it easy to discover and find products by applying sorting and filters.

INS decentralized marketplace for groceries - product filters

In addition to ‘rich filtering’, we will implement the 1-to-1 personalization mechanisms to provide a custom-tailored shopping experience. Starting from the ‘homepage’ consumers will be able to view previous orders, see their most frequently purchased items and product recommendations based on the shopping history. This will extend over to displaying special offers and suggestions in search results and navigation, providing recommendations right in the online shopping cart and sending out daily/weekly offers.

The marketplace for consumers will be available via the website and mobile apps with access to the decentralized storage network and smart contracts. The goal here is to set up secure and straightforward interfaces that makes it easy to discover, find and choose products for ordering.

INS decentralized marketplace - grocery interface

Orders and Payment

When placing orders via the INS website or app, consumers will be able to specify delivery details and complete purchases using onsite payment. Eligibility to discount and rewards will depend on the payment method.

The INS Tokens will serve as a local currency and one of the means of payment accepted by our partners. Apart from that, it will be used to handle all types of rewards earned, traded and exchanged within the INS Ecosystem.

Disclaimer: INS tokens do not provide holders with any ownership, interest or any guaranteed form of dividends, revenue distributions, and voting rights within the INS Ecosystem Limited, incorporated as a BVI company.

Consumers will be able to acquire INS Tokens via cryptographic token exchanges and upon becoming INS Ecosystem participants. During the registration process, the platform will set up a user profile and a wallet that securely stores payment information and utilises smart contracts.

Rewards

Rewards and loyalty programs will be customised by manufacturers to meet consumers needs and inceltivize long-term relationships. In turn, consumers will provide manufacturers with direct privacy-preserving feedback based on their personal interest and the amount of potential reward in INS tokens.

In order to motivate their audience, manufacturers will be able to program blockchain-based smart contracts with multiple conditions and variables such as reward types, expiration dates, product lists that the reward can be spent on and more. The whole system will work similar to miles-based loyalty programs and will be more flexible, personalised and cheaper to run.

In addition, consumers will be incentivised to make a first order and promote the INS Ecosystem via referral rewards system. We will allocate the INS Reserve Fund on our token generation event with the primary goal to reward customers that help us spread the word about the new way to buy groceries.

Dispute Resolution

One of our main goals is to integrate trust building mechanisms into the INS Platform and INS Ecosystem as a whole. In order to do it, we will adopt the blockchain technology that will act as a universal ‘trust machine’, and implement the reputation system based on ratings for manufacturers, fulfillment parties and consumers. The system will be automated with the help of smart contracts, have transparent rules and improved security requirements such as legitimacy, integrity and privacy.

The reputation system will render the dispute mechanism unnecessary in most cases and will incentivise all ecosystem participants to act truthfully in order to maintain a high rating score. If failed, the dispute mechanism will include an INS employee to serve as an arbiter and can influence the rating score for both defendant and complainant.

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