Blockchain technology has a wide range of applications in today’s world. From enabling peer-to-peer money to securing data integrity, blockchain technology has proved to be the most profitable. The ecommerce business and retail industry are seeing the best of blockchain technology which helps in the secure transfer of data, maintains data integrity and security.
In this article experts from Paybis.com will explain what blockchain is, check some of the problems of the ecommerce industry, and see how this new technology can prove to be the right “pill” for most “diseases” in online shopping.
What is blockchain?
The blockchain is a distributed ledger for keeping records of transactions, which means it is not stored in a central location nor being managed by a single authority. Blockchain is one of the great technological innovations of our time. The simple but ingenious idea that we can give anybody the ability to verify the information shared on a network in real-time has already had an impact on some of the world’s most successful companies, like IBM, Google, and other big names.
Apart from ecommerce, this emerging technology greatly affects education, healthcare, banking and insurance, and many other big industries. It’s the technology that enables machine learning and AI which we will bring up later in the article.
Which are the biggest ecommerce and retail problems, and how does blockchain tackle them?
The online commerce and retail industry have a lot of challenges that they should face, and if you plan to create a successful business, you need to have those in mind. Let’s start with some of the largest problems that are plaguing this sector.
Challenge 1: Security breaches
Ecommerce sites have a big problem with security, especially when customers have to enter their bank details to complete a purchase. This can be a major issue for customers and lead to serious consequences if their personal information is compromised. To combat this, ecommerce sites need to have strong security measures in place to protect their customers’ data.
Blockchain technology can successfully tackle many security problems as it uses encryption. As a result, even if something happens with the clients’ database, there won’t be major consequences since what hackers will receive as data will be pure gibberish.
Challenge 2: Supply chain
Supply chain management is a critical issue for businesses operating in the ecommerce space. Without proper supply chain management, businesses can end up inadvertently selling counterfeit goods, which can damage their reputation and bottom line. In order to avoid these problems, businesses need to have a clear understanding of their supply chain and put robust systems and processes in place to manage it effectively. However, things always look easier on paper.
Blockchain technology can provide a comprehensive view of the supply chain from start to finish. This transparency can improve product quality and safety, as well as help to ensure that ethical standards are met throughout the supply chain. In addition, blockchain-based supply chains can be more efficient and responsive, helping to save time and money when applying ecommerce tracking.
Challenge 3: Login authentication
Signing into an ecommerce website is crucial for a great shopping experience. People want to be able to log into their account easily and directly. By ensuring that sign-on login is easy and straightforward, you can give customers the great experience they crave. The less time customers spend before they checkout, the better. It’s still a big challenge for small websites to enable secure sign-on services.
Blockchain is the “pill” for this problem, too. Why? It’s simple – it can be used as a verification tool that could enhance user experience and counter problems that should be there at the first place, right?
Challenge 4: Global payment processing
Ecommerce storefront owners want to make money. However, they can lose a lot of money if they don’t have the right payment methods in place. There are many different ways to accept payments online, and each has its own advantages and disadvantages. Choosing the right payment method for your store can be the difference between making a profit and losing money.
Many big names in the industry already support multiple currencies, but there is one “slight” problem – there are still not enough gateways for people who live in more distant places. On another note, if you are a British customer shopping from an ecommerce store based in the US, you will have to pay currency exchange fees unless there is an option to buy with British pounds.
Paying with cryptocurrencies is a great way for shoppers from any country to buy from you. All they need is a crypto wallet, and they’re good to go. This makes it easier than ever for you to sell your products or services to anyone in the world. And there is an added benefit: if you buy from online stores with other currencies, you won’t have to deal with exchange rates that don’t favor you.
Challenge 4.1: Payment processing fees
We don’t bring it up as a new challenge, as it is a direct result from the payment processor fees. With some providers, they usually end up paying around 3%, including the commission. Paypal charges up to 2.9% + fixed fee per transaction. Stripe does the same, and many others follow suit. As a result, you may sacrifice around 2-3% of your profit margin to 3rd party processors. But provided that you generate around 10% net profit margin, this might be up to 30% worth of the whole sum.
Transaction fees don’t have to be large. Before Ethereum 2.0, there were little doubts that transactions were too expensive. However, that’s no longer the case, as you can spend less than $2, and with Ripple, you can spend zero to nothing. If you’re selling expensive electronics, this can make a huge difference, especially given the fact that consumer electronics don’t record high margins like apparel.
Challenge 5: Better customer service
There are many reasons why brands fail to improve customer loyalty – poor communication or wrong guesses. Often, there are factors outside of their control that can lead to poor results. This can be frustrating for brands, but it is important to remember that there are ways to overcome these challenges, and it’s crucial that you take action to change the favors if they go against you.
Blockchain technology is the most critical aspect of transformative change in any business by radically improving customer interactions with brands. With trust, security, and transparency at the core of blockchain projects, customers will interact with your brand in new ways with increased loyalty.
Challenge 6: Marketing efforts
Many ecommerce companies struggle to make an impact with their marketing campaigns, often losing lots of money and bringing low ROI. In order to be successful, ecommerce companies need to focus on creating campaigns that are not only effective, but also engaging. This means thinking outside the box and coming up with creative ideas that will capture the attention of potential customers. But there’s also something to consider – personalization. That may make a huge difference.
Many apps that offer blockchain-based solutions can help track traffic, and identify spam content or black hat marketing. This can be extremely helpful for businesses and organizations who want to keep their online presence clean and free of malicious content. Using these app solutions can help protect your brand and reputation while keeping your customers and users safe.
Challenge 7: Cutting the middleman
Intermediaries are everywhere when it comes to ecommerce. Lots of apps, lots of different services, and it all results in more chaotic processes, higher costs, and more money spent on 3rd party services. Of course, this will be one of the reasons for the ever-increasing prices of consumer goods. This would result in fewer sales, as a result.
Blockchain can effectively become a one-stop shop for all of your needs, as it has multiple applications – it can boost machine learning, optimize security protocols and remove the need for external software, add transparency and cut off shipping plugins, and deal with payment processors. It’s an all-in-one solution that can leverage your business.
As we move further into the digital age, automation is playing an increasingly important role in the world of online shopping. However, in order for this automation to be effective, it needs to have a solid foundation to build upon. This is where blockchain technology comes in. By creating a secure and decentralized network, blockchain provides the perfect backbone upon which AI can rely. In this way, blockchain can help to ensure that the future of online shopping is both efficient and reliable.
Blockchain technology is an inescapable part of ecommerce’s path. It can effectively resolve many issues and save business owners lots of bucks. And if you leverage blockchain now, you might end up outpacing your competitors!