There is no doubt that blockchain is going to revolutionarily change the world. Blockchain can be defined as a decentralized and distributed ledger that stores all the transaction information in blocks over a peer-to-peer network. It provides immutable, transparent, and shared systems while remaining private. That’s why blockchain technology is a perfect fit for the e-commerce industry. Nowadays, there are more and more e-commerce businesses are seeking blockchain development companies to integrate this new technology into their platforms.
If you want to know more about blockchain use cases in the e-commerce sector, this is a useful article for you. Now, we will dig into the 4 ways that blockchain can solve problems existing in the e-commerce industry.
1. Integrating blockchain peer-to-peer payment systems in e-commerce
Nowadays, there are 2 biggest problems in e-commerce, which are data security and online identity verification issues. Inefficiency in customer identification leads to various fake IDs and unreliable reviews. And customers of current e-commerces are suffering from the problem of leaking personal information (such as shopping history, emails, phone numbers,…) due to ineffective data management.
So, blockchain is considered a great innovation to solve these issues by a peer-to-peer payment system. Here are some reasons why e-commerce benefits from the payment system of blockchain technology:
- Decentralized: Blockchain is a decentralized digital data storage that isn’t owned by any third-party vendors. So, retailers and customers are the only parties in the payment systems that can control transactions. There is no fear that a third-party organization will manipulate your transactions.
- Identity security: By using blockchain technology, all the payments, shopping history, and personal information are transparent in the system. So, it provides better privacy and security for customers.
- Convenience: When using cryptocurrencies such as Bitcoin or Ethereum, users don’t have to go to any third-party organizations to create an account. For example, if customers want to pay by credit card, they need to go to the bank and create an account. So, using blockchain payment systems provide better convenience than the current payment method of e-commerce.
- Fast transactions: It takes only a few minutes to complete a transaction in a blockchain payment system, while the traditional payment method of e-commerce takes a longer time for a successful transaction. If customers pay by credit card, the transaction needs to be verified by banks first, then going to businesses. So, blockchain technology can provide a payment method with better functions.
2. Enhancing supply chain management in e-commerce platforms
Item tracking is always a huge consideration for e-commerce businesses. Most online business owners face difficulty in monitoring, tracking goods, and managing supplies. The supply chain includes several intermediates with complicated processes such as packaging, unpackaging, repackaging, etc, so it is hard to control the quality of goods. Then, businesses can consider blockchain technology as a solution to enhance supply chain management. It helps businesses in provenance tracking, reducing costs, and ensuring privacy security.
- Provenance tracking: Blockchain technology makes provenance tracking and keeping records become easy to follow since the information of goods can be accessed anytime through identification tags and embedded sensors. Product origin also can be traced simply by blockchain technology.
- Reducing costs: Fewer intermediates mean lower costs in the supply chain. Additionally, deleting the intermediates can decrease the risks of information leaking, hacking, and fraud.
- Ensuring privacy and security: When adopting blockchain technology, all the data is stored in a distributed ledger, so the information about products, tracking processes, orders, etc can not be altered without businesses knowing. All the activities in the sale, tracking, and transaction processes are immutable and time-stamped. So, if any issues happen, businesses can trace them back easily.
3. Personalized Product Offerings for e-commerce's customers
Leaking personal data and spam messages are always huge issues that annoy e-commerce users. Many customers complain that their emails and phone numbers are leaked, so they are usually bothered by the spam and advertising emails of several merchants. Customers find it annoying, time-wasting, and gradually lose their trust in e-commerce.
So, is there any solution to tackle this problem? The answer is blockchain technology. By integrating blockchain with e-commerce, customers will have full control over their information. They can decide who can see purchasing history and merchants that can send product offerings to their emails. It helps customers to select product offerings and discount programs from only shops that they are interested in. So, blockchain technology helps not only customers in avoiding spam emails but also businesses in approaching potential customers. It is a win-win situation for both parties.
4. Verified customer reviews
There are various factors affecting customer retention, including prices, brand images, product quality, discount program, etc. Especially, according to MarketingSherpa Ecommerce Benchmark Study 2014, a website that has had a success score of customer feedback, almost 8/10. So, among different factors, reviews from the previous customer play an indispensable role in making customers repurchase products.
In current e-commerce, each user can have several IDs since registers require only phone numbers or emails. So, users can create clone emails or fake SIM cards to register. It leads to a critical issue, which is fake reviews. Competitors can leave negative fake reviews on other brands’ products to decrease their prestige. Meanwhile, a brand can create positive fake feedback to increase its own prestige. Unreliable reviews leave customers a bad impression about products, brands, and even e-commerce.
However, by using blockchain technology, each customer will have only an ID, registered by identity number, email, phone number, and address. It will avoid the risk of fake reviews or ghost orders since the registration information is verified. Data in the blockchain is kept in blocks that are added to a chain of blocks with similar information. Before being added to the chain, each block has to be verified by the computer network. So it is hard for the information in blockchain to alter or delete.
5. Final thoughts
Integrating blockchain in e-commerce helps businesses a lot in managing the supply chain better, avoiding fraud, and reducing costs. Customers are also benefited by blockchain-based e-commerce, such as having better control of their own information, avoiding spam messages, and high-quality customer feedback.
Since blockchain is predicted to be huge in the future, nowadays, many companies are jumping into this field. If you ever raise the question "Blockchain development - Who should I hire?", we are confident to say that SotaTek is one of the outstanding IT companies offering Blockchain Development Services with affordable prices and suitable solutions for businesses. If you want to get advice on how blockchain can help your businesses or the possible way to adopt blockchain in e-commerce, just contact us.