E-commerce is one of the world’s most important industries. To manage large amounts of data and other services, e-commerce platforms require enormous power and storage. Even though the industry is currently performing well, there are ways to improve it further, which is possible with blockchain technology. Blockchain technology can help e-commerce companies handle data more efficiently. In a blockchain network, the platforms can organize information about users, products, orders, deliveries, manufacturers, sellers, and much more.
Blockchain is well-known for its security features, which add extra layers of security to the e-commerce sector. It eliminates intermediaries and encourages peer-to-peer transactions. As cryptocurrency exchanges evolve, we gain many benefits such as faster transactions, reduced chargeback fraud, customer review verification, and personalised offerings. Blockchain guarantees end-to-end product tracking to customers through traceability. Finally, people will be able to track their orders in real time and verify the authenticity of the products.
The Advantages of Blockchain Ecommerce
Blockchain is beneficial to both brands and buyers because it improves the security of online financial transactions. However, it also has many other advantages, such as cost savings, improved business processes, faster transactions, and a better overall customer experience.
Product quality assurance and supply chain management:
Products purchased through ecommerce sites come from a variety of sources, which may or may not be genuine. How can we be certain that the product is authentic? What if we could label the product on the website as BLOCKCHAIN VERIFIED? I believe it is effective. We need to run supply chain management using blockchain behind the scenes, which means that when the product is harvested from the field, its information needs to be saved in Blockchain.
Similarly, all product transit points must be recorded in the blockchain. A link on the ecommerce site’s product page will provide information about the product supply chain process. This process will not only benefit buyers, but it will also assist farmers in understanding the actual route of the product they are selling, skipping the middlemen, and saving more money that they are entitled to.
Technically, I believe we should provide an API that communicates with the Blockchain server via product identifier (SKU) and returns the product information extracted from Blockchain. We have already created this type of API, which we call Platform as a Service (PaaS).
Ecommerce retailers are concerned about data breaches and fraudulent transactions. According to PriceWaterhouseCoopers’ annual Global Economic Crime and Fraud Survey 2020, 47% of businesses experienced fraud in the previous 24 months, resulting in a total loss of $42 billion.
Blockchain technology enables the verification of trusted identities by multiple trusted parties and provides the highest level of security for customer databases and CRM systems.
While shipping is an important aspect of ecommerce, it is handled by third parties. Whether we buy a single jacket or a wholesaler buys 1000 jackets, it goes through several stages and responsibilities before reaching the buyer’s hands. If the shipment is travelling through a hot desert and the temperature inside the container cannot be adjusted, the jackets inside may be damaged, and damaged jackets will be delivered to the buyer. But who is to blame for the jacket damage? Is there any valid evidence to claim the loss to the parties involved? No, not yet. However, by utilising Blockchain and IoT, we can now ensure that we know who is responsible for this damage. IoT devices detect the inside temperature of the container and send the data to blockchain, where it is recorded by blockchian. Once the temperature is recorded in Blockchain for each second, we can easily determine where the items were damaged and who is to blame. In this way, we can improve the shipping business, which is an important part of ecommerce.
One significant advantage of blockchain technology is that it enables retailers to combine services such as payment processing, inventory management, product descriptions, and so on, saving them money on the purchase and maintenance of separate systems.
Furthermore, because cryptocurrencies such as Bitcoin can be sent instantly peer-to-peer, there is no need to use banking systems. This reduces bank fees for issuing or acquiring funds, as well as credit card company fees for processing payments.
Transactions are simpler and faster:
There are no payment processing delays or pending transactions like in traditional banks. Customers benefit from faster order fulfillment, as purchases can be made instantly.
Business processes have been improved:
Blockchains are capable of storing more than just transactional data. They can store smart contracts (also known as smart properties and chaincode), which can automate tasks like automatic payments and inventory management based on predefined rules and if-then statements.
For example, suppose you purchase a Rolex online and make a deposit using a blockchain-based cryptocurrency. You are given a receipt that is stored in a virtual contract. The retailer ships the watch to you by a specified delivery date, and if it does not arrive on time, the blockchain refunds your deposit. If you receive the watch, the blockchain transfers your entire payment to the retailer.
Blockchain can also be used to store digital records such as customer receipts and warranty information, making it easier to validate ownership and warranty information while also reducing the need for paper records.
Global consumers will have greater access:
Access to a dependable banking system is not a given for customers in developing countries. Blockchain and cryptocurrencies enable them to cut out the middleman, giving them access to a broader range of ecommerce retailers. It also enables forward-thinking brands to enter new and emerging markets.
Programs for rewards and referrals that are more convenient:
Blockchain enables brands to easily issue reward points that can be redeemed across multiple sites and partner brands. Companies can even pay influencers or content creators in digital tokens, which can then be converted into their preferred currency.
How Blockchain Will Change Ecommerce?
Blockchain technologies and e-commerce sites are forming a viable economic ecosystem for both consumers and online retailers. As more online retailers incorporate distributed ledger technology into their business processes, they discover new ways to serve their customers. Blockchains provide them with an efficient means of improving their customer experience. Other opportunities that blockchain technologies will create in the e-commerce market are listed below.
Smart contracts are computer programmes that can automate certain tasks based on predefined rules. Smart contracts can automate e-commerce-related processes because blockchains are used to store them. They can help an e-commerce business grow by lowering the costs of hiring employees to perform tasks that computer programmes can automate. Inventory management can also be aided by smart contracts. This means that online retailers can manage inventory control.
Receipts and warranties are easily accessible.
Using blockchain technology, online retailers and their customers can also store product receipts and warranties. The loss of paper receipts is one of the issues that buyers face when making online purchases. Buyers may also be frustrated when attempting to demonstrate the warranty coverage of products purchased. Thanks to blockchains, buyers and retailers will be able to easily access receipts and warranty data, as well as validate proof of ownership.
Personal Offers and Loyalty Programs
When online retailers incorporate blockchain technologies into their business processes, they will be able to easily issue redeemable reward points to their customers when they reach certain spending thresholds. These reward points can also be redeemed across multiple e-commerce sites by online retailers. Customers can also benefit from personalised offers and discounts provided by retailers as a result of blockchain technology. These loyalty programmes can help e-commerce businesses attract more customers and expand their product reach.
Content creators are critical to the growth of e-commerce sites and should not be overlooked. One of the exciting things that blockchain technology has in store for e-commerce sites in the future is the ability to pay content creators. This means that content curators will be able to earn digital tokens for creating and posting appealing content on these sites thanks to blockchains. Online retailers will accept payments through digital wallets. Digital wallets, which allow users to convert digital tokens to their preferred currencies, support cryptocurrencies such as Bitcoin.
Supply Chain Management
Online stores can achieve their business objectives with a dependable supply chain. This is because supply chains allow store owners to know what stocks are on the way and when they will arrive. Supply chains also assist store owners in determining the quality of products supplied by vendors. When these operators use blockchain to monitor the supply chain, they can prevent vendors from substituting specific products while also promoting transparency throughout the process.
Supply Chain Monitoring
With the assistance of a dependable supply chain, online stores can achieve their desired business goals. This is because supply chains inform store owners about what stocks are on their way and when they will arrive. Supply chains also assist store owners in determining the types of products offered by vendors. By using blockchain to track the supply chain, these companies can prevent vendors from substituting products and ensure that the process is transparent.