eCommerce is one of the most prominent selling mediums at present and is being used by businesses from numerous industries all across the globe. Over time, e-retail has revolutionized businesses and has proven to be an excellent substitute and, in many cases, a better option than traditional shopping.
Moreover, eCommerce has evolved in recent times to become better and more efficient than ever before. Businesses in the eCommerce sector are using the latest technologies and tech innovations to achieve this objective. One of the most popular technologies that hold a tremendous role in revolutionizing e-retail is blockchain.
This blog will cover everything that you need to know about the implementation of blockchain technology in the eCommerce sector. Let’s start the blog by understanding what exactly blockchain technology is.
What Is Blockchain Technology?
In simple words, blockchain is a technology that records and stores data in a ‘block’. The data or information is decentralized, meaning that it is stored at different locations on public servers. The technology is known for its high security and immunity to theft and data breaches.
Today, blockchain technology is used in numerous different industries and sectors. One of the most popular implementations of the technology is undoubtedly bitcoin, which is a cryptocurrency based on this technology. Today, blockchain is used all across the globe for its high safety and top-notch security. Some of the most popular implementations of blockchain technology are evident in the healthcare, logistics, and NFT sectors.
However, it is also true that no other industry is benefitting from Blockchain technology as much as eCommerce is. Let’s find out more about this duo in the upcoming section.
Blockchain & eCommerce
The eCommerce industry relies heavily on tech advancements for its innovation and enhancement. Today, the industry utilizes numerous smart technologies like AI, AR/VR, cloud computing, and, most prominently, blockchain.
The e-retail and blockchain pair are best known at present for their ability to uplift the customer experience and provide buyers with a secure, safe, and hassle-free shopping experience. Witnessing the tremendous potential of this technology, e-retail businesses have been quick to integrate blockchain-based solutions in their business practices.
However, what exactly are the benefits of implementing blockchain technology in an eCommerce business? Let’s find the answer to this question in the upcoming section.T
8 Reasons Why eCommerce Should Adopt Blockchain
Increased Data Security
Data security is one of the biggest matters of concern in the eCommerce industry. While customer data is highly essential for e-retail businesses, it cannot be denied that it is also sensitive and highly confidential. In this case, businesses try their best to maintain the integrity of user data and prevent it from being exploited.
However, there have been numerous cases of data leaks and security breaches recorded among eCommerce businesses. In this case, it is almost impossible for online retail businesses to maintain optimum data security without utilizing high-end technologies like blockchain.
Blockchain technology is fundamentally known for its high security. Owing to the decentralized nature of the technology, the data that is secured using blockchain is almost impossible to access through unfair means. As a result, by using blockchain technology, you can provide assurance to your customers that their sensitive data, like credit/ debit card numbers, account information, address, mobile number, etc. is safe from predators.
Transparent Supply Chain
The supply chain is one of the most important parts of every business, online or traditional. It is the route through which a business procures and sell goods and earn its revenue.
However, numerous big brands and companies have been in question lately due to their lack of transparency, particularly in the supply chain. Present-day consumers are highly aware and informed. As a result, e-commerce businesses are opting for measures that add transparency and accountability to their practices.
Blockchain facilitates this need and makes it possible for businesses to ensure transparency throughout the supply chain. The technology is known for its ability to record each and every transaction in which the supply chain is no exception. Therefore, modern e-commerce businesses are widely using blockchain to be more fair and accountable to their customers and are providing unalterable and solid proof of their supply chains.
Reduced Delivery Charges
Shipping and delivery is a cumbersome process that involves numerous processes, detailed tracking, and, most importantly, hefty manual efforts. Naturally, all of this contributes to the shipping charges of the goods that people buy from eCommerce businesses.
Moreover, it is commonly known that the cost of delivering goods is often passed on to the final customers. This is one of the most prominent reasons for the limited adoption of e-commerce among customers. However, blockchain technology makes it possible for businesses to significantly cut down on these shipping and delivery charges and make buying goods online more feasible for e-shoppers.
Blockchain technology and its solutions have tremendous scope for implementation in shipping process management. To explain, transportation and fleet businesses can use blockchain to monitor the shipping process from start to end with effective tracking (owing to distributed block technology), reduce human errors, and maintain transportation data quality.
All of this directly contributes to lowering the cost it takes for a business to ship the goods to the customers and, in turn, reduces the overall shipping cost of the product. This certainly encourages people to shop more from e-commerce businesses.
Elimination of Intermediaries
Every business requires intermediaries or middlemen in some form or the other for certain roles and purposes in the organization. One of the most common and essential middlemen for every business is the one that keeps track of the financial records of the company. This middleman is often a banker that conducts the financial transactions on behalf of the organization.
However, hiring these middlemen is not only inconvenient but also an expensive affair for the business, as the organization has to spend additionally on these employees, further adding to the costs. Blockchain technology makes it possible for businesses to eliminate these intermediaries and automate transaction recording.
Blockchain is capable of automatically recording transactions and storing them in individual blocks. These records are highly secure and cannot be removed or altered, therefore maintaining their integrity and reliability. This not only helps in reducing the cost of operating an eCommerce business but also adds to their efficiency and transparency.
Every business, digital or traditional, aims to deliver the highest quality of customer experience. One of the most popular ways for e-commerce businesses to guarantee a seamless shopping experience to their customers is to ensure seamless, quick, and hurdle-free delivery.
However, with the increasing demand for e-commerce, it is often challenging for e-retailers to deliver a seamless buying experience to their buyers, resulting in customer dissatisfaction. Speaking factually, 85% of buyers do not prefer to shop again after having a bad delivery experience with an online seller.
In this case, eCommerce businesses can use technologies like blockchain to their benefit and improve their delivery service. To elaborate, blockchain technology can be seamlessly integrated with other technologies like IoT to undertake real-time order tracking. Buyers can use this feature to track their products in real-time and get a rigid delivery date.
Overall, the duo of blockchain and eCommerce has immense potential to uplift customers’ shopping experiences by guaranteeing timely product delivery, therefore enhancing the buyer’s shopping experiences.
One of the major advantages of shopping for goods online is digital payment. This payment method has made it easy for customers to buy goods, as they no longer have to carry physical cash and currency with them all the time. However, as beneficial as digital payments seem to be, they also come with certain limitations. One of the most prominent limitations of digital payments is the lengthy checkout process.
Therefore, there is a need for a solution that makes checkout more swift. This is the only way for eCommerce businesses to maintain their market position and earn customer trust.
Here, utilizing blockchain-based solutions is a million-dollar idea for eCommerce businesses. Today, numerous online retail businesses have integrated blockchain-based solutions in their payment methods and have made online shopping swift, quick, and reliable.
To explain, blockchain technology can store customer data on the platform. Owing to this factor, customers can skip the lengthy checkout process and buy goods with ease. This not only adds to the customer experience but also reduces the chances of cart abandonment.
Improved Business Efficiency
Business efficiency is a crucial aspect of every e-retail organization. At present, the only way to survive the competition and remain profitable is to attain process and operational efficiency. Generally speaking, it is easier for e-commerce businesses than traditional businesses to remain efficient. This is because starting an eCommerce business comes with all the advantages of integrating technologies that are better known for process automation, therefore, adding to business efficiency.
Blockchain is one of the most ideal and popularly used technologies in this aspect. Today, numerous eCommerce businesses use blockchain technology for numerous processes that contribute to process efficiency. To elaborate, blockchain is capable of automatically initiating and conducting processes, especially financial transactions and storing them on decentralized ledgers.
The ‘self-executing’ nature of blockchain technology has enabled online retailers to reduce manual efforts that would otherwise be required for their business and automate processes. Therefore, utilizing blockchain is one of the best ways for businesses to achieve process efficiency and increase profitability.
Top-notch Payment Processing
Payment processors are fundamental to eCommerce platforms, as they make it possible for buyers to pay digitally for the goods they intend to purchase. As a result, it is commonly understood that payment processors need to provide high-end performance and security.
However, this is easier said than done, as a minor bug in the digital payment gateway can hinder the complete checkout process and make it prone to security breaches. Here, utilizing blockchain technology can be an excellent way to improve digital payment processors’ quality.
Blockchain technology makes payment processing highly secure, as each and every transaction is recorded. The transactions are recorded on decentralized ledgers that can be accessed by everyone. As a result, there is no scope for theft or fraud in payments empowered by blockchain technology.
To add to that, many online retailers have started using blockchain-based digital currencies (cryptocurrencies) like Bitcoin as a form of payment. Paying through cryptocurrencies is not only secure but also seamless and hassle-free for the customers. This makes blockchain an excellent solution for e-retailers to uplift their customer experience and deliver a seamless and quick shopping experience.
These were a few of the many advantages of blockchain technology in the eCommerce sector. We hope that by now you are aware of why it is a good idea to integrate your eCommerce platform with blockchain. If you are not, let us try to give you a real-life example of Amazon, an eCommerce giant that has utilized blockchain to achieve tremendous market success.
Amazon & Blockchain: Example From Industry
The eCommerce giant Amazon offers a wide variety of online and traditional payment modes for buyers to choose from. We mentioned earlier the use of blockchain-based cryptocurrencies in the e-retail sector and their role in making payments more swift and secure. However, it is worth noting that the eCommerce giant does not facilitate paying through popular cryptocurrencies like Bitcoin on its platform.
On the contrary, Amazon has created its very own cryptocurrency, known as Amazon Coin. The users can purchase this currency as an investment and benefit from cryptocurrency. Moreover, users can also utilize this blockchain-based cryptocurrency to make payments on the platform.
AWS & Amazon Managed Blockchain
AWS (Amazon Web Services) is a cloud computing service offered by Amazon as a part of its expansion plan beyond eCommerce. The company uses AWS in its eCommerce processes and utilizes the technology to store the data securely on the cloud.
Amazon Managed Blockchain, when integrated with Amazon Web Services, enables the eCommerce giant to maintain data security and safety and ensure that all the transactions made on the platform are securely stored.
These are two of the most popular implementations of blockchain technology all across the eCommerce sector. Therefore, if you are planning to build an e-commerce website like Amazon or already have one, using blockchain technology can take your business to the next level of success and growth.
This was it for the topic on the importance and role of blockchain technology in the eCommerce sector. We hope that by now, you are aware of why it is a good idea for eCommerce businesses to invest in blockchain technology.
It is now known that there are numerous ways in which an e-retial business can benefit from investing in online shopping. From process automation to increased security and enhanced customer experience, blockchain technology has a significant role in enhancing the eCommerce sector and improving the profitability of e-retail businesses.
At last, it is up to the business to identify these benefits on time and study the competitors and understand how they are utilizing blockchain. By understanding these factors, you are most certain to get the best out of technology and upscale your eCommerce business in no time.