Blockchain is a powerful technology, so powerful that a highly popular alternative currency is based on this technology.
Rapidly, before the governments throughout the world came into action to regulate the currency, Bitcoin has already become a tender, used according to the agreement between parties. Even that regulatory authorities have come into action, Bitcoin is still ruling into the wallets of many cryptocurrency buyers, to the extent that some current balances of wallets having no outgoings.
Interestingly, 42% of cryptocurrency whales didn’t sell the currency even when the demand was on peak. A research of blockchain unit by Diar shows that 1% of wallets has more than 55% of total Bitcoin in the world. This shows the confidence of the people on the Bitcoin and Blockchain technology, on which this eCurrency is based on.
Now, businesses around the world are willing to use the technology to maintain security and standards in payments, supply chain management, data management, and marketplace. Businesses from service sectors to energy sectors and logistics to finance are aiming to transform their processes to increase transparency and security.
One sector that is likely to get affected by Blockchain technology is eCommerce, as the Internet based industry has always struggled to gain everything that Blockchain offers-security,transparency, privacy, and customer convenience.
Below are the 5 Ways How Blockchain is Shaping the eCommerce Industry:
There are numerous eCommerce platforms, specifically large organizations such as Amazon, eBay, and Alibaba, where a wide range of goods are bought and sold every day. Since these platforms are immensely popular, a little effort is needed by the small-scale manufacturers, wholesalers, and retailers to sell their products.
With numerous benefits, there are several problems as well, which needed to be addressed and that Blockchain technology can easily resolve, which are:
Secure Payment Model for eCommerce Industry
Blockchain technology provides an irreversible transaction facility, and by using it, eCommerce companies can control fraudulent chargebacks.
With the absence of unilateral payment processor, dishonest claims by some customers or dispute can be put to the end. From this, the maximum benefit is going to be received by sellers, as ultimately it is they who suffers the most.
Secondly, most of the eCommerce sites use third party payment gateway, and so it is not directly between buyer and machine, which is time-consuming and costly for the sellers.
Although, blockchain is not the fastest way of payment, as the average time of block creations is up to 10 minutes that further limits the networking capabilities and restraining the transactions between 3.3 to 7 transactions per second but at this speed, there is an assurance of highly secure system.
Visibility into the Customers’ Order Fulfillment Journey
Large eCommerce platforms provide limited details to the retailers about the customers’ journey so that they can improve their product and services to better serve their customers in the future.
The journey begins from once the customer place the order online till the delivery of the product. If the eCommerce website is powered by the blockchain technology, then for every step of the transaction, a new chain will be created which will provide complete visibility into the actions performed by the customers.
It will also help in resolving transaction dispute and decentralized system to address grievances.
- Retailers can provide personalized offers and loyalty programs to their consistent buyers.
- Products warranties can be stored, and so all the parties including manufacturers, vendors, and customers can access the warranty data easily.
- It will help to generate reviews from the authentic buyers and not by the manipulative competitors.
Freedom from High Transaction Fees
eCommerce platforms charge processing fees from sellers for the payment solution providers as well as on the sales made by the sellers, which covers 2-3% of the total transaction made.
Since through blockchain technology, users can directly pay to the machines, it will reduce the transaction cost, which will be a win-win situation for the manufacturers and vendors.
Data on Decentralized Servers to Prevent Attacks
Ecommerce platforms store customer’s data into a centralized server, which are mostly collected from the customers and retailers.
Top companies like eBay and Zappos, owned by Amazon, has also faced cyber-attacks, where hackers have gained internal access to their system.
Blockchain based eCommerce website has decentralized servers and so this type of cyber-attacks is virtually impossible, as also hacking all those nodes is extremely difficult and so blockchain is considered comparatively safe.
Increased Safety of Personal Information of Users
Recently, in the May 2018, Europe has enforced a data protection law, which will impact on Blockchain technology and existing eCommerce players.
EU General Data Protection Regulation (GDPR) in it strive to protect the data and privacy of its citizen has increased territorial scope for data processing, introduced penalties for not having enough customer consent, and mainly ensuring privacy by design.
Whether a large eCommerce platform or a small eCommerce startup, every organization store the personal information of the users and use that in various ways.
As we know that Cryptocurrency payments are borderless, the out of territorial scope of data processing and privacy regulations by GDPR can be made valid by integrating eCommerce websites with blockchain technology.
Blockchain Powered by AI
Blockchain becomes more powerful when empowered by Artificial Intelligence including advanced cognitive abilities. This way the technology could help save a huge amount of time searching for a product by understanding customers’ behavioral habits.
In the market, many companies have already tried collaborating AI and Blockchain to build a marketplace. As Blockchain is a distributed ledger, it assures safe collaboration, establish peer-to-peer network, and remove intermediaries throughout the payment lifecycle. When powered by AI, the blockchain-based eCommerce website can help in creating useful datasets, expanding community, and enhance efficiency.
Preparing for the Blockchain Revolution
eCommerce Industry can gain a range of business opportunities through applying Blockchain technology for their platforms. It helps them gain transparency, security, and high efficiency-all the factors that lead to enhanced trustworthiness among customers. For eCommerce companies, it is an excellent opportunity to stay relevant for the consumers and gain their trust.
With Blockchain, eCommerce companies can manage payment, inventory, and product database. It also helps in ultimately reducing the cost, as the companies do not need to support a large IT team, besides, transactions charges levied by the banks can also be removed, leading to higher profit and happy customers.