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Using cryptocurrency to reward conscientious shoppers with Shping

Shping - global cryptocurrency reward scheme
(C) iStock.com/DenPotisev

Shopping is an activity that unites the vast majority of people on this planet. The global system that has developed to meet humanity’s need for goods and products is a labyrinth of companies, regulations and supply routes connecting manufacturers in one part of the world to consumers in another.

More and more, consumers want to know where the products they buy come from, and the processes under which they were made. Getting hold of this information, however, can be a difficult and time-consuming process.

We spoke to Shping CEO Gennady Volchek, about how the company is trying to leverage the power of cryptocurrencies to create a global system that brings brands and consumers together, and rewards shoppers for taking an interest in where products come from. The company has created a system that allows consumers to authenticate the products they buy by scanning the barcode and rewards them with cryptocurrency for doing so.

“Our goal for Shping Coin is that it becomes the new token of exchange that brands, retailers, certification bodies and associated authorities can use to incentivise shoppers to contribute, monitor and engage with information about their products before they buy,” says Volchek.

“By enabling businesses to reward shoppers to make smarter and safer shopping choices, we aim to make Shping Coin a highly accessible cryptocurrency.”

What’s wrong with the current system?

The global scale of the supply chain, from production to retail, often means that the products people buy travel through many jurisdictions before they get to them. Often, the component parts or ingredients come from distinct places before being assembled somewhere else.

More and more, consumers are wanting to know where the products they buy are coming from, and what they are made of. More governments are introducing mandatory requirements for some sectors to implement traceability and serialisation.

Shping looks to address three big problems with the current system.

Firstly, the current range of track and trace systems for products can be very expensive for businesses. Shping is looking to build the world’s biggest product database by combining a number of data sources, including GS1 member organisations, governments and independent certification bodies. This data will all be combined in the app and is accessed by scanning product barcodes.

An important practical application for this is a large-scale product recall event: “So, for example, if you are a manufacturer of infant formula and something goes wrong with the supply of your ingredients or in your production, governments want to make sure that consumers are safe and brands know exactly where their goods are if they have to recall them,” says Volchek.

“You need to able to quickly remove the products, so you need to know every retailer, every distributor that has interacted with your products along the supply chain.”

Secondly, counterfeiting is still a huge global problem. According to the OECD, the global trade in fake goods was worth almost half a trillion dollars in 2016. Shping wants to give consumers the power to validate products themselves as well as efforts by companies. “For businesses, the cost to ensure that only genuine products are sold in retail stores can be exorbitant,” says Volchek.

Thirdly, relaying product information to shopper’s is currently difficult and inefficient. Unless consumers exercise an unusual level of due diligence, it can be hard for them to find out the kinds of product information that Shping are offering when they might need it. “Consumers don’t go to websites to look up the products they put in their trolley in the supermarket,” explains Volchek.

Where does the product data come from?

One half of the company’s offering is Shping Security, which is a track and trace platform based on Hyperledger Fabric. “It integrates into the manufacturing and production process and in some cases, with the raw material supplier’s processes also,” says Volchek.

During the production process, every product produced gets a unique barcode in the form of a GS1 data metrics code, which is applied on the products either by printing on the product or the packaging. This is recorded at the day of the production so that it can be synced with best before dates and so on. Once the product has been produced it has a unique identifier, like a passport, and the system updates as the product moves through distributors, retailers and into the hands of eager consumers.

“As products move through the supply chain, Shping Security talks to the systems of supply chain partners and updates the chain of custody for every individual product,” says Volchek.

“Having complete traceability also enables brands to act quickly should any of the ingredient suppliers announce a product recall, alerting Shping App users who have scanned the barcode.”

The platform authenticates products by matching the geo-location of the end user scanning the barcode with the registered address of the product based on the data metrics code. Not only can this reduce the risk of counterfeits being sold, it can also help brands to monitor where products are being considered for purchase, offering valuable data to help businesses improve processes, optimise sales and increase efficiencies.

consumers don’t go to websites to look up the products they put in their trolley in the supermarket

Making data one swipe away

The idea that brands, as well as consumers, would find the data generated by the system useful forms the second half of the company’s offering. Shping Marketing offers brands a full set of marketing information about where their products are being bought and by whom, but it also lets them communicate directly with app users.

“Businesses can add detailed information about the product’s contents, provenance, features and benefits as well as promotional information and video content if they wish,” says Volchek. “Businesses can also create “to do” cards, product surveys, encourage product reviews and issue ‘shout outs’ to communicate to shoppers who have scanned their products in the past.”

Brands can use the geo-location features of the app, as well as user segmentation, to send specific offers and promotions to targeted sections of their audience. For example, a running shoes company could send out a promotion targeted to a particular city a month before it hosts a marathon, advertising a discount on new shoes. The idea is not to cut out the intermediaries between brands and consumers, such as retailers, but to create another layer in the ecosystem that feeds information directly to shoppers.

But why would consumers choose to use the app? This is where the cryptocurrency reward comes in. As Volchek details:

“To incentivise barcode scanning and resulting user actions, participating businesses can use the Shping Marketing platform to allocate Shping Coin for each activation triggered through the App as an incentive and reward for shoppers.” The company is hoping that, with global interest in cryptocurrency rising, the app will be adopted by shoppers hungry for crypto-based rewards, which will in turn produce more opportunities and data for brands.

For Volchek, this presents consumers two key benefits:

“On top of the crypto-rewards they can earn, the ability to access useful information about a product to help make purchases quickly and conveniently offers profound and immediate benefits for shoppers. Shoppers can also contribute images, reviews and tips about products they have purchased, adding an additional layer of information to help other App users make informed choices.”

One feature of this global supply system is the diversity of currencies that are used. This creates a problem for companies attempting to extend the reach of their reward schemes. Exchange rates can mean that some people are effectively locked out: a Zimbabwean, for example, consumer may have trouble exchanging their reward into their local currency.

Cryptocurrency could potentially solve this issue. A consumer crypto-based reward would only have to pass from the company’s wallet to the consumers, with no need for intermediaries such as fiat currency or banks.

The product roadmap for the App includes a number of compelling features to be released, including augmented experiences, additional alerts for shoppers with allergies and a host of new features that supports retailers.

Hybrid approach to data storage

The company is utilising two of the cutting-edge technologies in the blockchain space to make their system a reality. The cryptocurrency is running on Ethereum, while the track and trace system uses Hyperledger Fabric in partnership with Everledger, the blockchain company looking to reduce risk and fraud.

Volchek hopes that the partnership with Everledger will also enable the Shping App to validate the provenance of diamonds and other high-value asset goods, meaning that the app can be used for any purchase occasion.

With regards to the data it stores about its users and brands, however, the company has opted to take a hybrid approach. Some of the data is stored centrally while some of it is stored on a blockchain. According to Volchek, the reason for this comes down to the preference of brands with regards to how their data is stored.

“Some of the data collected from organisations could be sensitive,” he says. “As much as we are advocates for it, the blockchain is still a very new concept for many, we can appreciate that the model may not be the right fit for every product and every business.

“We are therefore offering both a centralised and a decentralised database to enable us to scale for both circumstances, while providing businesses with the option to make the transition, if and when they wish.”

So, does the company have plans to eventually make the full move over to a distributed ledger. For Volchek, that depends on the movements of the market in the future. Interest in the technology is currently very high, but whether that translates into an actual appetite remains to be seen:

“A lot of clients are actively exploring blockchain, but many of them are not yet ready to fully make the move.”

Shping launched their ICO pre-sale on 22 January. The crowd sale begins on 22 February. Visit the company website for details. 

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