What You See Is What You Get: The Impact of Blockchain Technology Transparency on Consumers

Consumers often encounter challenges when assessing product quality, especially for those products with unobservable quality features. In this context, retailers play a crucial role in providing transparent product information that bridges the gap between manufacturers and consumers.

But how can retailers ensure transparency in the information provided to consumers? This study investigates whether leveraging digital technologies can enhance retailer transparency and reduce information asymmetry regarding product quality.

This work focuses explicitly on Blockchain Technology (BT) as a digital technology that may enhance retailer transparency. BT, known primarily for its role in finance, has increasingly found applications across various sectors, including retailing. One notable use of BT is in ensuring supply chain traceability. Platforms like Provenance and IBM Blockchain enable firms to trace product journeys, allowing retailers to offer consumers transparent information about the products they purchase.

Despite the potential benefits, the impact of retailer transparency facilitated by BT on consumer responses remains relatively unexplored in academic research. However, given consumers’ pivotal role in the supply chain, understanding their responses toward BT may be crucial both from a theoretical and managerial point of view.

In this work, we conducted three experiments involving 1,995 participants to understand more about the role of retailer transparency elicited by BT in affecting consumer responses.

Study 1 demonstrates that retailer transparency elicited by BT leads consumers to perceive higher product quality, resulting in increased trust and future intentions toward the retailer (intentions to purchase retailer’s products, to spread positive word-of-mouth, and to visit the store).

Study 2 demonstrates that information quantity (i.e., the amount of details about each supply chain step) moderates retailer transparency's effects. Indeed, as suggested by prior research, when retailers provide consumers with more information about the product’s journey, the latter should infer higher product quality. Therefore, when product information quantity is high, consumers should already perceive product quality as high, mitigating the positive effect of BT traceability. Results from Study 2 are in line with our prediction.

Lastly, Study 3 examines whether the effects observed in the previous studies are unique to BT-elicited transparency or if similar effects could be achieved through other transparency approaches. The results from this final study indicate that BT-elicited transparency specifically drives the observed effects rather than transparency in general.

From a managerial perspective, this work encourages businesses to leverage BT to trace the supply chain more transparently. Since retailers play a key role between manufacturers and consumers, our results prompt them to weigh the cost of investing in the technological infrastructure needed to provide consumers with BT traceability against the higher levels of future intentions expressed by consumers in response to such traceability.

This work should also be relevant for manufacturers, as sharing transparency data with retailers could become an excellent trade marketing tool. Complete disclosure of product information is necessary for successful implementations of transparency strategies and alignments between supply chain businesses. BT-induced transparency may not only boost retailers’ profits but also generate backward advantages for all the suppliers involved with retailers.

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Authors at the Department of Management

MATILDE RAPEZZI – PhD Candidate and Research Fellow

Academic disciplines: Marketing

Teaching areas: Marketing

Research fields: Branding, Language, Retailing

Matilde Rapezzi is a PhD candidate and Research Fellow at the University of Bologna. From 2023 to 2024, she was a visiting scholar at Vrije Universiteit Amsterdam. She is also a AMA-Sheth Doctoral Consortium Fellow. Matilde is a behavioral researcher. She investigates marketing phenomena from a psychological and sociopsychological perspective, relying on both experimental and field data.

GABRIELE PIZZI – Associate Professor

Academic disciplines: Marketing

Teaching areas: Marketing, Retailing

Research fields: Retailing and Channel Management; Technological Innovation in Retailing

Gabriele Pizzi is an associate professor of marketing at the University of Bologna and the Scientific Director of the Observatory on Retailing, which is in partnership with the Retail Institute Italy. In 2017, he received a Research Grant from the Italian Marketing Society for his research on the application of VR in the Retail industry, and he is currently the Principal Investigator for a PRIN project funded by the Italian Ministry for University and Research.

GIAN LUCA MARZOCCHI – Full Professor

Academic disciplines: Marketing

Teaching areas: Marketing

Research fields: Consumer behavior, Service Quality; Retailing

Gian Luca Marzocchi is a Full Professor of Management at the University of Bologna, where he teaches undergraduate and graduate courses on Consumer Behavior and Marketing, Customer Value Management, Micro-Marketing and CRM and Statistical Modelling of Service Quality. He is a member of the Committee for Sponsorship and Brand Licensing of the University of Bologna.