How does consumer quality preference impact blockchain adoption in supply chains?

Abstract

Blockchain technology is increasingly used to ensure the authenticity of product information in supply chains. As digital transparency becomes a key factor in modern commerce, the evaluation of blockchain’s value becomes important. In this paper, we model a supply chain with a manufacturer and an online retailer to study the role of blockchain in the marketplace and wholesale price models. Particularly, we take consumer quality preference into account and examine its impact on blockchain adoption. We discuss how blockchain ensures the authenticity of quality information shared between the manufacturer and retailer while improving consumers’ perceived product value. Our findings indicate that blockchain enhances information transparency and reduces the impact of commissions on pricing in the wholesale price model, which is beneficial to both the manufacturer and the retailer. This is significantly advantageous when quality-conscious consumers dominate the marketplace model. We recommend that the manufacturer and retailer should assess consumer preferences for product quality and carefully weigh the cost of implementing blockchain. Blockchain reduces constraints from commission-driven pricing, offering greater flexibility in business model selection. Additionally, transparency improvements are crucial when implementing blockchain in the marketplace model.