In the United States alone, the e-commerce industry represents 10% of retail sales, with a rapid increase of 15% each year. New blockchain technology solutions are proving to help simplify the process of customer acquisition as well as helping buyers make informed decisions before their purchase. As e-commerce continues to evolve at a rapid pace, business owners should keep up with the latest online trends to help boost sales and stay ahead. Check out how Blockchain technology is shaping the future of E-Commerce.
Rise of Blockchain Technology
A blockchain is a database in which bits of information, known as “the blocks,” are linked together. Since the database is managed and shared by more than one party, it can be easy to spot critical errors – making it a highly trusted system. With the rise of cryptocurrencies, online retailers including Shopify, Stripe, and Etsy are supporting the movement. However, the e-commerce industry has been cautious when it comes to the use of blockchain on their platform.
The blockchain revolution is poised to change the future of e-commerce by decentralizing control and cutting out the middlemen. While there are no centralized databases in the blockchain, it ensures that no individual will have the power to tamper or modify the data. Companies like Alibaba are currently using cryptocurrency payments to track the origin of food products and reduce the number of fake products sold. Furthermore, Amazon has recently registered three blockchain web domains. If companies like these see blockchain as the future, then clearly, this technology should be the forefront e-commerce strategy for every business.
Advantages of Blockchain in E-Commerce
While blockchain technology has been long linked with Bitcoin transactions, its potential to expand is now recognized by e-commerce and other growing industries. Blockchain can effectively solve today’s common online issues by bringing a new revolution, including:
Cheaper transactions – Enable the existence of smart contracts, which would lower the cost and complexity of transactions.
Faster Transfers – Order details, transactions, and commissions can be made visible for others to lower the dangers of dispute, disorganization, and delays.
The peer-to-peer connection gives power back to the user’s hands. For example, online shoppers who prefer not to pay until their item is received have the option to confirm the payment receipt to the seller until the delivery is complete. This can be done through coded instructed that replace the middle platform while cutting costs and increasing trust.
Blockchain Challenges in E-Commerce
While taking out the middleman is a cost-effective benefit, manufacturers and vendors will need to improve their customer experience. As this requires improvements in customer insight, what better way to achieve that than by combining merchants and consumers on a blockchain-based platform? Companies can provide a channel for services and assess their level of value added to their client’s interactions.
To survive the global growth of online retail, businesses will have to continue to incorporate blockchain technology into their operations, especially to optimize overall customer experience and logistics. Ignoring this rising trend means potentially missing out on more profit and market growth. In fact, retailers who combine their physical locations with e-commerce trends while maintaining personalized customer service will have the best opportunity to maximize their profit and consumer landscape.
Provided By Tax Software Company, Sovos