Innovative technological concepts have been transfiguring the consumer experience for centuries. For example, eCommerce introduced an entirely new shopping alternative to customers, and now a significant share of global commerce is owned by electronic commerce. Consumers have enjoyed the new landscape for more than a decade, but now there seems to be room for improvement, which is set to fill by blockchain. In this blog, we will discuss all about blockchain and eCommerce and how the pair has enhanced the customer experience.
Blockchain has been the topic of discussion for recent decades. Like a ledger, blockchain is a digital system that carries data and records that are safer and secure. The core competency of blockchain is that it is digitally distributed, decentralized, and public ledger, which makes it nearly impossible for someone to make random changes. Thus, the system is more reliable to use in any transaction.
How Does Blockchain Work with eCommerce?
As defined already, blockchain is a digital ledger where data and information can be stored without the chances of getting hacked, erased, or altered. eCommerce, at the same time, is a digital landscape supporting tons of transactions every minute. Be it the customer placing the order, surfing through the product, setting up the profile, or making an online payment, a bulk of data is there to be stored and managed. In the absence of a secured and trusted platform to hold this crucial data, we have witnessed many cases of data breaches.
So, blockchain comes as the best platform choice to store all this data about transactions and customers without any risk of data breach. Whole information is stored in individual blocks of the blockchain. Any changes in these blocks by a single entity is nearly impossible. The working principle of blockchain is designed in a way that any alteration might take hundreds of years or even more.
Use Cases of Blockchain in eCommerce
Let’s have a glance at the use cases of blockchain in eCommerce and how it is transfiguring the industry-
1. Peer-To-Peer Payments
The monetary transaction is a core part of the eCommerce buying process. Currently, most of the transactions are made via banks, where these financial institutions play the intermediary role. Here, the transaction speed entirely depends on this intermediary’s capabilities. Similarly, the safety of payment, transaction speed, return of payment, and all the aspects depend on the intermediary.
So, blockchain in ecommerce payment replaces the conventional process of smart contracts. With blockchain, the payment process becomes more decentralized; thus, no intermediary controls your monetary transactions. Similarly, your payment is transferred from your side directly to the merchant without the interference of any middle party. So your transactions are secure, faster, and better managed. Kudos to the technology; we have transparency and reliability in our monetary transactions.
2. Personalized Product Offerings
Providing a personalized experience to the customers is key to establishing a loyal consumer base in this competitive landscape. However, merchants need essential information about their customers, such as their purchasing habits, preferences, and needs.
Blockchain integration in eCommerce helps to capture this kind of crucial insights and other information of the customers on its secure ledger. The upper hand is that customers have complete control over their data and can choose the merchants they want to share this information with. So, users don’t have to think twice before sharing their information, as their data is highly secured on the blockchain. At the same time, merchants can use this insight to offer personalized offers and discount coupons to their customers.
3. Reliable Product Information
Product information is one of the deciding factors for the purchase, and hence, customers look for reliable information about the product before making the purchase. Here, the product description is the go-to place for millions of customers on the online marketplace to know about the product. If the product description matches the requirement, the customer buys the product and vice-versa.
Blockchain makes the product description even more reliable for customers. Thanks to the concept, the information is more reliable, and customers can go through the relevant certifications to validate the quality and originality of the product. Undoubtedly, this core competency of blockchain has made the online shopping of jewelry, luxury products, branded and designer clothes, and other expensive things more reliable for customers.
4. Verified Customer Reviews
Customer reviews are the best source for the real-time quality of a product. Users rely on customer reviews to make decisions about their purchases. However, the competitive landscape has yet to spare this factor untouched; thus, even reviews are rarely reliable nowadays. Merchants publish fake reviews, while some post negative reviews on their competitors’ products.
So, blockchain delivers the ability to verify product reviews as well as modify the logic behind publishing and creating the reviews. Thus, a new industry standard for the review concept is established, which is more reliable, genuine, and trustworthy.
5. Optimized Supply Chain Management
The supply chain at eCommerce is vast and complex depending on the size of the business, type of products, countries, and continents of operations, along with various factors. Thus, maintaining the transparency of the supply chain management process has been a big challenge.
Blockchain arrives with significant relief in this scenario. Kudos to the nature of blockchain, any information fed in the blockchain can not be altered in the future. Similarly, the records of inventory, sales, and orders can neither be erased nor changed when stored on this digital ledger. The tracking of data is even better with blockchain. Any query such as who manufactured the product, who purchased the product, where the product was stored, who processed the order, and how the payment was made, can be traced easily. Thus, the overall supply chain becomes more transparent, integrated, and free from any possible fraud.
Benefits of Blockchain in eCommerce
When blockchain and eCommerce are integrated, it delivers many benefits to both the product providers and the receiver. A range of processes is streamlined at once, providing a seamless experience to relevant stakeholders. Let’s have a look at some significant benefits of blockchain in eCommerce.
1. Enhanced Security
One of the core strengths of blockchain technology is that it is more secure than any of the other concepts we know to date. The data stored about customers on the blockchain digital ledgers are free from any risk of data breaching or malicious activity. Customers have complete control over the information when the data is stored on the blockchain. The customer can even choose the merchants to share and not share the information with.
2. Fraud Prevention
Phishing is a prominent fraudulent activity that often affects the reliability of users on eCommerce platforms. Here, the hackers collect users’ login credentials and use them for various fraudulent tasks such as online fraud, counterfeit goods, cross-border shopping, and more.
Blockchain helps control these fraudulent activities to a significant extent. The tamper-proof record of transactions helps ensure that all transactions on the platform are legitimate and accountable.
3. Product Authenticity
As any information stored in the blockchain is challenging to change or delete, the product description provided by the merchant becomes more authentic. At the same time, transparency in the supply chain enhances customer product authenticity. So, the users can rely on product information provided by the merchant to make the buying decision.
4. No intermediaries
Blockchain entirely removes every intermediary from the process. The information is delivered from customer to merchant, and payment is transferred directly to the seller from the buyer. It not only transfigures the security of the process but also makes it faster. Whether making the payment or claiming the refund, transactions are completed within seconds.
5. Better Tracking of Parcels
A big part of eCommerce is logistics. However, significant problems have occurred due to the inefficiency of inventory tracking, as merchants and platforms have to rely on third-party delivery services. Blockchain here brings wonder by enhancing the tracking capabilities for logistics, and one can easily track the exact location of a parcel.
Real-time implementation of Blockchain in eCommerce
Renowned eCommerce platforms have already implemented blockchain technology to reshape their user experience. Have a glance at the following case studies-
1. Amazon Managed Blockchain
When it comes to ecommerce platforms, we can never skip the name Amazon. Being the leader of industry, the platform is known for its innovative implementations in the landscape. Be it the use of AR/VR for a better customer experience or the use of blockchain in the supply chain, and the firm has worked constantly to enhance the efficiency of online shopping.
For a long time, the firm has witnessed the challenge of tracking and tracing where customers need more access to know the exact location of their order. Today’s supply chain is based on an outdated paper process with disjointed data silos, which slows down the process.
So, Amazon is all set to equip its supply chain with Blockchain technology for better tracking and tracing ability of the product. The customer will be able to track the order and even access the details from the manufacturing stage. All the stakeholders, such as suppliers, manufacturers, regulators, logistics providers, wholesalers, retailers, and customers, will share the mutual digital ledger to input the information. So, there will be no specific owner or authority to control the process. Instead, every stakeholder will be providing up-to-date information about the product. So, the customer can access real-time position of the product without interference of a central authority.
2. eBay to introduce Libra Cryptocurrency
eBay has been operating in the eCommerce landscape for multiple decades and has introduced new updates time-to-time. Recently, the firm has joined hands with the Libra Association and is planning heavily to introduce Libra Cryptocurrency. The new digital currency is expected to be used for all kinds of transactions on the platforms.
With Libra Cryptocurrency, the firm aims to establish a trusted, accepted, and stable cryptocurrency that can transfigure experience at a marketplace in a significant manner. With this cryptocurrency in place, the buyers will have access to inventory offered by sellers from different corners of the world, and at the same time, they will be able to make the payment in their preferred currency. Also, the transaction will be completed at fraction of today’s transaction cost, making the deals more profitable for the businesses.
Challenge of Implementing Cryptocurrency in eCommerce
While blockchain is so efficient in enhancing the capabilities and operations of eCommerce transactions, it is still just in its infancy. There are a lot of challenges in the implementation of cryptocurrency in eCommerce. These challenges are but are not limited to:-
|Lack of adoption||One can leverage the efficiency of blockchain only when all the stakeholders in the process support it. For example, suppose the customer wants real-time tracking of the order. In that case, it is necessary that the supplier, manufacturer, warehouse manager, wholesaler, and retailer upload the updated information on the blockchain. But blockchain adoption is in its initial stages, and there is still a long way to go. The technology can only deliver benefits if the adoption rate is high enough.|
|Rising cost of blockchain implementation||Blockchain implementation requires a significant monetary investment, and as long as the business owner is not willing to invest a large sum, the implementation can not be executed. Undoubtedly, some of the solutions in blockchain are free of cost; still, it requires a good investment to hire skilled software engineers specialized in blockchain development.|
|Scalability||Bitcoin can support only 3-7 transactions every second, while Ethereum supports only 15-20. So, widespread adoption of blockchain needs to improve the speed before being implemented in large-scale businesses. So, the blockchain can still not simultaneously serve a large user base, which is a big challenge for adopting blockchain in eCommerce.|
|Rules and legislations||Cryptocurrencies have received negative attention in different markets, and some countries have even imposed restrictions on using cryptocurrencies for various purposes. Bitcoin is banned in numerous countries, while it is regulated with little success in other countries. So, before becoming a global concept in the eCommerce industry, these rules and legislation need extensive alterations.|
|Low workforce availability||With increasing familiarity with the NFTs and blockchain, the demand for relevant skills and talented people has risen by 300%. The situation has led to labor market issues. The companies are fighting hard to attract the right talent, and for the same, some are even offering more than $1 million annually to workers in this job category. Still, there need to be more blockchain experts in the market, which makes the deployment more challenging.|
|Other challenges||Other challenges cum hurdles in implementing blockchain in eCommerce are lack of standardization, integration with legacy systems, interoperability, vital private issues, etc.|
Possible Future Scenario of Blockchain in eCommerce
The blockchain market size has been valued at $4,982 million in 2021, which is expected to achieve a valuation of $67,385 by 2026. The figures calculate the CAGR of more than 68.4% in 5 years. Undoubtedly, the blockchain concept is getting familiar to the business and being implemented to transfigure the user experience. So, we can expect that-
- Blockchain will be a significant medium to store and share the necessary information about the customers, providing more data control into the users’ hands.
- The cryptocurrency might attract a more comprehensive use case as a globally accepted mode of payment without the need for currency exchange.
- The tracking and tracing of parcels might be equipped with blockchain technology, providing real-time insight into the current position of the package.
- The reliability of people to purchase luxury and expensive commodities from online platforms will increase as blockchain will ensure the authenticity of the information.
- The payment and refund time will decrease gradually with blockchain technology in place.
How can Emizentech help you?
Emizentech is one of the leading development companies for both eCommerce solutions and Blockchain technology. So, whether it is an online commerce landscape you are willing to explore, or the integration of blockchain technology in your existing ecommerce presence to achieve competitive advantages, Emizentech has everything for you under one roof.
We have an experienced and skilled workforce that will help you equip cutting-edge technology for your business and take a step ahead of competitors in the market. Emizentech works with a team of 250+ members, more than 50% of them carry exceptional skills and experience in the field. We have worked on blockchain app development projects and have the expertise to develop blockchain solutions with excellent efficiency.
Blockchain integration in eCommerce has been a new concept to enhance the customer experience and transfigure the process to the next level. First, using the blockchain to make the payment eliminates the central authority that processes and controls the payments. Thus the payment efficiency and speed increase. At the same time, storing the data about the supply chain on the digital ledger of blockchain makes it more accessible and real-time to users. Similarly, the customers’ information is being stored on the blockchain, enhancing the security and safety of data.
Being an eCommerce development company and Blockchain Development Company, Emizentech invites you to leverage the technology and achieve exceptional competitive advantages.