Blockchain ecommerce seems to be the word of the year; well, more like for the years to follow too. The b-word isn’t just a fancy jargon that accidentally happens to be the talk of the town. Blockchain has already started showing much of its potential and is expected to take the world by storm. The early developments in the application of Blockchain and the proliferation in its adoption says a lot about its future and how it could shape the world of ecommerce.
But if you haven’t been paying much attention to it, does that mean you’ll end up on the losing end of the spectrum or is everyone else jumping on another short-lived bandwagon?
Would you have to remodel your business plans or is it safe to turn a blind eye?
There’s only one way to find out. In this article, I will list down how blockchain has influenced ecommerce and where its true strengths lie.
The hard truth is that every business has pain points, among which customer trust and efficient business management are very visible areas.
The irony is that even when the Internet provides new and small players equal opportunity to compete in the marketplace, it can be hard to make yourself stand out. You either struggle to satisfy your customers at the expense of already squeezed-up margins or there are still loopholes in your business management system.
Even if you’ve mastered every aspect of the business, there is room for improvements.
All Those In Favor
Speaking of pain points, according to Grainne McNamara from PwC, trade finance is an outdated process with many delays and errors. Blockchain technology is expected to disrupt the process by addressing the pain points directly, by simplifying processes and reducing complexities at all levels. Interestingly, Alibaba, the ecommerce giant, is investing heavily into blockchain to track genuine food products and verify the authenticity of the items.
A group of leading companies across the global food supply chain, including Walmart, Nestlé and Unilever have announced a major blockchain collaboration with IBM. These companies see blockchain as an opportunity to maintain secure digital records and improve the traceability of the foodstuffs that enter the product lifecycle of their brands. Even Maersk, the well known shipping and logistics company has been reported to have tested the management of its cargo operations using blockchain. The system was built in a partnership with IBM.
What’s common between these companies is that they see blockchain as an opportunity to revamp their data management processes and maintain secure digital records. Simply put, their involvement spells glad tidings for the potential of blockchain and its future prospects.
What Does Blockchain Has To Offer?
Transparency, coherence, cost-effectiveness and effective integration with business processes at all levels of the business are just a few USPs of blockchain. Irrespective of the size of your business, (gradually) combining the strengths of blockchain with your business can present endless opportunities.
It’s a matter of a few years (I wouldn’t deny it), before store owners and ecommerce merchants are left with no option but to adopt blockchain and the associated cryptocurrencies and secure record management systems.
Here are some of the most feasible possibilities offered by blockchain right now. Note that these possibilities have the potential to transform the way business (both B2B, B2C and even C2C) is conducted in the coming years.
The most apparent benefit of integrating blockchain into your payment processing is its proposed transparency. Transactions through blockchain offer radical visibility, security, faster processing speed and traceability through the decentralized register of ownership. Every transaction is recorded and visible to the public, including the creation of a block.
At the same time, you can automate the fulfillment of agreements and eliminate counterfeit goods from your supply chain by taking advantage of the transparency of blockchain. Fraudulent goods are always an issue in online commerce and blockchain offers an ideal solution for this problem. In fact, tracking counterfeit products is one reason why Alibaba is so interested in blockchain.
Cost-Effectiveness & Trust
On the strength of blockchain, store owners can accept cryptocurrencies with zero (or very low) fees. The concept of cost-effectiveness beats the conventional digital payment methods as it removes the middlemen/payment processors that require a cut in exchange for security and guarantee for the transaction.
PayPal, for instance secures a buyer’s payment up until the goods are delivered. Using blockchain, a merchant can guarantee a similar level of security to its buyers. This way, your customers have the peace of mind that until the exact delivery is fulfilled, money will not be transferred to the merchant’s wallet.
Integration with the Management Systems
Don’t think that blockchain is restricted to accepting payments. You can easily integrate it into various management systems. A very probable use case is the integration of blockchain with warehouse management systems. This integration is crucial for avoiding the supply of fraudulent items. At the same time, this integration also allows for the automation of inventory control and streamlines the distribution processes – The possibilities are endless.
Another use case is the market strategy that involves democratization of content and its use in the daily business functions, such as the sharing and monetization of 3D images. Using the blockchain technology, creators and online retailers can share and sell content through P2P networks. An example of this solution is Cappasity, a cloud based platform, which leverages blockchain infrastructure to easily create and embed 3D content into their websites.
The Day After Tomorrow: Future of Ecommerce
We can all agree that the ecommerce of today is prone to errors and has significant room for improvement. And blockchain might just be the key for these improvements. According to a report by IBM, 15% of the banks in their survey are expected to have commercial blockchain solutions in operation as early as 2017.
But are the prospects of this prodigious approach exaggerated? Will it ever succeed? Does it even have a future? Well, no one can say for sure. What we do know is that blockchain has the potential to create a streamlined business that resonates with your audience and outperforms your peers that are still struggling with the conventional methods of conducting online business. We can say for sure that blockchain, if anything, isn’t a threat to ecommerce, but a technology that has the potential of evolving ecommerce into a higher, more beneficial global enterprise.