5 Ways Blockchain is Transforming eCommerce
A typical eCommerce marketplace has witnessed its fair share of transitions and evolutions. With all these alterations underway — this domain has gone on to become one of the most lucrative sectors of the 21st Century.
So, what’s next on the plate for a traditional eCommerce business?
The answer is relatively simple and straight-forward — BLOCKCHAIN.
Blockchain has been enjoying a good run in the financial industry for quite some time now. According to a recent Statista Report, the global blockchain market is expected to see a surge of more than 400% by 2021.
As blockchain is inching closer to the real sectors of the economy — An increasing number of people have now started talking about other possible use-cases of blockchain apart from finance, especially in the most lucrative domain of them all — eCommerce.
The eCommerce industry has disrupted the way we shop & live, and blockchain is on its path to disrupt eCommerce. The implementation of blockchain technology in eCommerce marketplace will ignite a significant shift by establishing a decentralized economy.
Now, if you want to learn more about blockchain, then you must visit this link.
In this post, we are going to be extensively covering how blockchain is on its way transforming the ecommerce marketplace.
Stay tuned, as this post is definitely going to leave you surprised.
1. Payments Methods will get revamped
Blockchain witnessed its first implementation in currencies powered by its technology (like bitcoin, etherum, and ripple). Today, cryptocurrencies are being utilized as an alternative to traditional currencies.
This shift is due to the relative ease of implementation and the fact that they are decentralized. Bitcoin and other cryptocurrencies provide numerous advantages over traditional currencies which benefits both customers and merchants.
Some significant advantages are listed below,
Blockchain isn’t regulated by any central authority which basically implies that the buyer and seller only control blockchain operations. Thus, no third party can look over or manipulate your transactions.
Blockchain currencies can’t be inflated or devalued by any bank or government, as is the case with other currencies. For instance, if the economies of a country were to collapse today, their currencies would terribly suffer which is not the case with bitcoin because geopolitics do not influence its operation.
- Identity Protection
Cryptocurrencies based on blockchain technology don’t reveal the identities of the transacting parties. Still, these transactions are very transparent as centralized ledger stores the details and give visibility to transactions.
- Freedom of Transactions
There is no governing body which controls how a person utilizes his/her bitcoin. Regular payment methods are often imposed with several limits based on the amount and even geographical location. However, this isn’t the case with currencies like bitcoin — Blockchain-based currencies gives users absolute freedom to perform transactions without any cap on the spending limit.
- Ease of Use
Blockchain-based currencies are incredibly comfortable to use. Unlike traditional currencies, one doesn’t need to visit any regulatory authority to create an account. All these can be easily accomplished at the comfort of your home. Additionally, they do not levy any charges to open an account; instead, a virtual currency wallet is absolutely free.
- Faster Transactions
Traditional transfers often take long, especially sending money across continents may take up to several days to accomplish. Bitcoin transfers, on the contrary, only takes up a few minutes! Most importantly, they aren’t closed at any point in time, and a transaction could be carried out at almost any point of time, in an instant.
- Reduced Fraud
Blockchain-based currencies are extremely secure to transact with. Because of peer-to-peer technology, it is tough to hack into the process and conduct a fraud. Thus making it one of the safest modes of transaction.
With recent developments, it is very much likely that eCommerce marketplaces would soon allow consumers to pay with Bitcoin rather than Stripe or PayPal. In addition to being decentralized, secure and relatively easy to implement — sending and receiving money will become as convenient as scanning a QR code.
The relative ease of making payments is likely to be the first implementation of blockchain in the eCommerce marketplace.
2. Improved Supply Chain Management
Supply chain management is perhaps, one of the most pressing concerns every eCommerce business is marred with. Since the supply chain is a critical element of any eCommerce business — blockchain implementation in this sector will likely solve many problems.
Blockchain can be extensively leveraged to solve supply chain issues like recordkeeping, tracking of products as a less corruptible and better alternative to the centralized database.
Other use-cases of supply chain include,
- Provenance Tracking
In a blockchain-based supply chain, record keeping and provenance tracking become easy, as the product information can be accessed with the help of RFID tags and embedded sensors. The timeline of a product right from its inception to where it is at present can be traced through blockchain. Besides this, the type of accurate provenance tracking can also be leveraged to detect anomalies in any segment of the supply chain.
- Cost Reduction
When blockchain is applied to amp-up the administrative processes in the supply chain, the extra costs incurred by the system is automatically reduced while still guaranteeing the security of transactions. The elimination of intermediaries also eradicates the risks of frauds, product duplicacy while saving money at the same time. Customers and suppliers can further process payments within the supply chain by utilizing cryptocurrencies rather than customers and suppliers or relying on EDI.
- Inventory Management
Blockchain can be extensively utilized in the backend of the supply chain as well. For instance, the management of inventory becomes a whole lot easier by introducing blockchain in the process. Blockchain implementations in inventory management enable retailers to avoid unnecessary expenditure on hiring new staff time and again.
3. A More Transparent eCommerce Marketplace
With the recent backlash that big retailers have been facing in the wake of charges of lack of transparency — this is one of the more serious concerns faced by existing eCommerce platforms. For instance, Amazon was in the news for cutting-off and even disabling a merchant’s page without any explanation.
Thus, by applying blockchain technology in the ecommerce marketplace would establish a decentralized environment where any wrongdoings on the part of the business or merchant can be efficiently monitored.
A transparent eCommerce marketplace also facilitate in conducting transactions in a frictionless and efficient manner.
Moreover, with the declaration of recent blockchain projects by retail giants like Walmart and Unilever — it is evident that they are eyeing at gaining a foothold in blockchain-based offerings.
Blockchain today, can be easily deemed as one of the most secure platforms out there.
The Distributed Ledger Technology or DLT which blockchain boasts, offer excellent security for online database platforms that makes it ideal for implementation in eCommerce. Also, there has been almost negligible reporting of security breaches in blockchain-powered networks.
Another significant upside blockchain offers for eCommerce businesses is that blockchain-based currencies don’t exhibit personally identifiable information.
Currencies like Bitcoin operate like cash in the sense that they don’t require a consumer to expose sensitive data. In fact, the customer himself authorizes a transfer from his/her own personal “wallet” to that of the recipient. The only distinguishing piece of data tied to each user’s wallet is a randomly-generated unique identifier.
Since cyber attacks and data theft has increased tenfold, there is an inevitable risk of losing customers data. Therefore, adopting blockchain is an absolute key to solving these challenges.
5. Spawning Genuine Reviews and Personal Offers
- Fake Reviews
Reviews — good or bad — can determine the order in which a business appears on an ecommerce marketplace or in a search query result. Fake reviews tarnish the reputation of a good company while at the same time promoting a fraudulent one. The reputation of an online enterprise relies on the legitimacy of its reviews. Hence the majority of online operators have increasing concerns regarding the product service reviews found on the internet. Thus, making blockchain technology a crucial source to verify the reviews on their products or services. Deploying blockchain can help curb fake reviews, as blockchain stores data in blocks which is then added to a chain of similar information blocks. Each block requires to be verified across a network of computers before it can be added to the chain — once verified — it cannot be altered. The technology can be employed to create a digital map of someone, one which cannot be modified.
- Personal Offers
Adopting blockchain technologies in business processes can be extremely beneficial for marketing as you can issue redeemable reward points to the customers through blockchain when they cross a specific bar of spending. This will enable the client to benefit from a varied range of discounts and personal offers, at the same time enabling proper tracking of the data making blockchain technology more efficient.
The eCommerce marketplace is waiting to be revolutionized by the applications of Blockchain. Although it may take us a little time to witness these implementations — change is definitely in the pipeline.
Besides being faster and considerably cheaper, blockchain facilitates most activities that the present day commerce systems allow without causing any third party interference, making it ideal for retailers.
Blockchain technology can finally be concluded as the backbone of businesses in the ecommerce marketplace.
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