We’ve heard a lot of talk lately about how the blockchain will revolutionize every industry it touches. From government to finance, agriculture to the legal field, almost all areas stand to benefit from its transparency and decentralization. But, what about ecommerce? How can the blockchain improve online purchasing as we know it?
The ecommerce industry is positively burgeoning, with e-retail revenues estimated to reach $4.48 trillion by 2021. We spend a considerable amount of time buying and selling online and over 80 percent of all internet users have purchased something at least once. So, what exactly can the blockchain do to improve that?
Beyond Bitcoin Accepted Here
“Bitcoin Accepted Here” may be the first thing that crosses your mind when it comes to blockchain and ecommerce. But, that’s not exactly the only thing the blockchain can do for ecommerce. After all, several major e-tailers already allow for payment in digital currencies, including Overstock and Expedia. Nope, the real magic happens when ecommerce companies decides to weave the blockchain technology into their very core.
With the current financial system and need for payment processors, transactions pass through many middlemen between consumer and vendor. And every middleman rightly wants his slice of the pie. Whether that’s conversion costs or credit card fees, the blockchain could make them disappear. Not having to pay that 2.9 percent credit card fee paid on every single transaction would leave ecommerce stores a lot better off.
It’s not only the credit card companies either. Mega giants like PayPal should be feeling hearing the thundering hooves of the blockchain pounding fast on their heels. Why? Because currently, multi-billion dollar companies like this exist to ensure that money only moves hands after a transaction has been made and a product or service successfully delivered. But with the blockchain’s transparency and real time capability, there would no longer be the need for them.
Moreover, when a customer uses their digital wallet to pay for something, several actions occur. The item is processed, sent for delivery and later finally ends up on the door of the customer, with lots of passing of hands along the way. The blockchain has the capability of tracking the entire order from start to finish. Increased efficiency at lower cost.
No More Fraud
We keep hearing about the blockchain’s transparency, and this is a major bonus when it comes to things like fraudulent transactions. Thanks to the blockchain’s ability to record every single transaction, institutions can search for patterns in real time and fraudulent transactions can be flagged up before they occur. No more chargebacks.
Democratization of Data
Another huge middleman being hacked out of the equation are large data warehouses that store customer information and charge for it to be used. Companies logically don’t want to share data with each other, for fear of losing competitive advantage, but with blockchain, no one entity owns data anymore. Customers can control who uses their data and can trade it directly with the ecommerce store.
Why is this important? Because the e-tailer can purchase the data they want at a reduced cost that will lead to closed transactions.
More Efficient Marketing
Loyalty schemes could be instant with blockchain technology. Instead of waiting for cashback programs, the points could be handed out instantly in the customer’s digital wallet. Real time rewards at the time of purchase would lead to more purchases. There’s also the very attractive idea of consumers being rewarded for sharing their data.
ICOs like Sooloox provide a platform that allows customers to exchange data directly with interested buyers. Instead of having middlemen, the customers can get rewarded directly. This makes for consumer-led marketing with active participation, rather than reluctant consumers turning off their adblockers.
The blockchain is still in its infancy and experimental stages, so it remains to be seen in just how many more ways it will disrupt and improve the ecommerce industry. But it’s practically certain that the next Amazon to appear on the scene will have blockchain technology at its base.