Blockchain Technology in E-commerce and MarketingSource:
E-commerce does not stand still. Over the last few years, the industry has rapidly grown. Why? Let’s try to find out!
Remember when Nokia was the phone emperor, ruling over the mobile market? Then, out of nowhere, Apple dropped the iPhone bomb in 2007, and Nokia’s reign is history. Today, the e-commerce market is having its own Cinderella moment. The fairy godmother? Blockchain!
We know that today, blockchain is mostly associated with Bitcoin. But cryptocurrencies are only one of many applications for this technology. Blockchain is considered by many to be the next big thing since the Internet. In similar transformative capacities, a blockchain game development company can leverage this technology to create secure and innovative gaming experiences, thus pioneering new forms of engagement within the digital entertainment industry.
In our article, you will find out what blockchain is and how it works. We’ll also analyze the impact of blockchain on e-commerce. In short, we’ll tell you all about how blockchain is sweeping in and making this industry stronger and more advanced.
Blockchain: Advantages and Types
Our suggestion is to imagine blockchain as a huge puzzle, as it is practical. Each piece is a block. Every new piece holds all the previous ones. It creates something like a digital domino effect. Now, picture a massive community puzzle where every piece represents a transaction or a piece of data. When someone adds info, they’re dropping a puzzle piece into the mix.
Why is this cool? Well, you create something epic, and then this info is locked into the blockchain. No more fakes or shady business. Blockchain is in charge of data security and transparency. Isn’t that what the e-commerce industry desperately needs?
To explain how this works in an even simpler way, here’s a practical example (even though we made it up):
- Someone initiates a transaction – it could be a purchase, a contract, or anything. Let’s call our enthusiast Lily.
- Lily’s transaction gets locked up in a digital safe – encrypted and secure.
- Lily’s transaction joins a block. A gathering of computers (or nodes) verifies a transaction.
- Each block has a header with timestamps, a unique hash, and a nod to the previous block. It’s like a family tree.
- The blockchain algorithm transforms transaction data into a unique hash.
- Before a block joins the chain, it faces scrutiny. This consensus check ensures that there are no unauthorized actions.
- If all’s well, Lily’s transaction is officially in the books.
You’ve certainly heard plenty of times that blockchain is a revolutionary tech. Let’s recap why many people think so! Well, it offers real transparency, reliability (which makes hacking a tough nut to crack), security (the unbreakable chain), minimal commissions, no meddling middlemen, and total independence from the big shots.
The researchers are forecasting $176 billion in business value from blockchain by 2025 and $3.1 trillion by 2030. So you can really consider it to be a tech revolution!
There are three main Blockchain types. Here are their features summarized:
- Public Blockchain:
- Open to everyone.
- Like a massive digital space where anyone can join.
- Examples: Bitcoin and Ethereum.
- Consortium Blockchain:
- Semi-private club.
- Some entities have control.
- Example: Corda R3, where big banks team up.
- Private Blockchain:
- Exclusive party hosted by a single organization.
- Public can look in, but only selected people can manage it.
- Offers benefits like lower costs and faster transactions.
As for money, banking put in the most significant investment (29.7%). Other industries are manufacturing (11.4%), discrete manufacturing (10.9%), professional services (6.6%), and retail (6%).
Making Online Shopping Better with Blockchain
E-commerce has been facing some serious challenges lately, like fraud costing $343 billion in the next five years. And it’s also been plagued by phishing attacks, especially in retail and online shopping. Plus, high delivery prices are making 70% of online buyers bail on their purchases. Only about a third of them think delivery has actually gotten better.
But blockchain is truly changing the way things work. It brings a bunch of perks that can really make a big difference. Let’s talk more about that!
Firstly, blockchain makes entering the business easier. All these expensive logistical complexities and monopolies can be forgotten. Thanks to blockchain, everyone in the industry becomes more equal, making it easier for small companies to compete with larger ones. This undoubtedly raises the level of competition and stimulates innovations. As a result, it makes the industry more advanced, and working in it becomes even more interesting.
And, of course, blockchain equals the security of online shopping. Data leaks and privacy breaches are expressions that equally frighten both business owners and their customers. Blockchain can genuinely ensure the security of transactions. It utilizes various cryptographic tricks and guarantees confidentiality and reliability. Less fraud and more trust – that’s what awaits us!
And don’t think that’s all. Time to talk about transparency in supply chain management. The ability of blockchain to create an immutable and traceable ledger allows for recording and confirming every stage of the supply chain.
How will this help us? It reduces the risk of counterfeit goods and increases the overall reliability of the chain. Now we can be confident in the authenticity and origin of the products we purchase. Isn’t this a marvel in a world where everything from the latest iPhone to essential medications can be counterfeited?
So, this technology is not just convenient and cool. It addresses issues of large-scale fraud, data security, and supply chain transparency. So, it’s not entertainment for business owners; it’s the most direct and understandable path to a more inclusive, secure, and innovative ecosystem of online commerce. When considering the integration of such transformative technologies, partnering with experts like Wesoftyou can provide tailored solutions that align with your business goals and propel you towards a technologically advanced and secure online environment.
Real-world Application of Blockchain in E-Commerce
You won’t believe how blockchain technology is actively being implemented in various industries, and e-commerce is not lagging behind! Different businesses, from OpenBazaar to Buying.com, are already cutting-edge. And it’s not just startups, but well-known brands like Nestlé, Amazon, and others. They are not wasting time and are integrating blockchain into their business processes.
Let’s see how this technology is applicable in such industries:
- Payment systems;
- Logistics and delivery;
- Personal data protection.
Look, blockchain in payment systems is effective, and most importantly, affordable. Payment systems like PayPal and Payoneer, although cool, charge fees (2-3%) for using their platform. Blockchain, on the other hand, enables fast, secure, and inexpensive transfers.
As businesses explore efficient and cost-effective transaction methods, platforms where customers can buy Dogecoin offer a viable alternative, promising lower fees and faster processing times.
Ever heard of Request Network? That’s a perfect example. Financial transactions in e-commerce will become cheaper. E-commerce can operate with minimal commissions now.
Now, let’s talk about logistics and delivery. E-commerce requires efficient supply chain management and inventory control. And here comes blockchain with transparency. Now, you can track shipments at every stage. Just monitor, check the history. This reduces costs and eliminates corruption. Why? Because it removes intermediaries.
There are already companies applying blockchain in this manner. How do they operate? Each product receives its unique identifier. It goes into the blockchain and simultaneously onto the product with an NFC chip, RFID tag, or QR code. That’s how they track products at every stage of their movement. It also helps verify their authenticity, addressing the issue of counterfeits.
Now, let’s talk about blockchain in marketplaces! The key thing here is personal data protection. These marketplaces store all data on their servers, including crucial information like customers’ banking details. Blockchain excels here because there’s no centralized data storage system. You can’t just hack into all decentralized nodes of the blockchain platform. Plus, the information there is encrypted to the max. So, it’s all secure.
In general, blockchain in e-commerce is not just about security and transparency. It’s a complete rethink of conventional business processes!
According to Colin McDermott, head of Digital at e-commerce marketplace Whop.com: “Blockchain is reshaping e-commerce by making payments cheaper, supply chains transparent, and personal data more secure. Its adoption across various brands signifies a shift towards efficient, secure digital marketplaces.”
Blockchain in Marketing: Advertising in a New Way
Believe it or not, but now your data will be genuinely secure. Thanks to blockchain, they can now record every step of your purchase journey. Of course, this is under the condition that you’re willing to “sell” your data. Anonymity and personal data protection foster more trust among customers: they are now more willing to share their payment and purchase preferences.
But now, let’s talk more about how this technology helps in aspects such as:
- Accessible analytics;
- Combating fake reviews;
- Increasing customer loyalty.
Analytics
In retail, businesses can now track what they’ve purchased without spending a fortune on analytics. There are already examples of how this works brilliantly. Some services connect the buyers and the sellers. They provide us with access to verified information about products and their history. We get authentic data, and sellers get new customers and the opportunity to offer something special.
Fake Reviews
Customer reviews are cool. But sometimes, there are so many fakes that they can undermine a company’s reputation. That’s where blockchain comes to the rescue.
Revain is a prime example. They use blockchain to go through reviews, making it impossible to tamper with them.
Additionally, they implement Natural Language Understanding technologies for precise filtering of fakes. This solution also monitors how emotional we are, our past activity, and where we usually express doubt.
So, blockchain is changing the game in how marketing and data security rules operate. But, as with any new feature, implementation requires a careful approach.
Loyalty
With blockchain, information about products is always up-to-date. This is crucial for buyers. Consistent product descriptions and certificates strengthen our loyalty (especially when we’re splurging on something expensive).
Smart contracts play a significant role in loyalty programs. They can issue bonuses after each of our purchases (stored in the blockchain, of course).
Well, blockchain is still far from widespread implementation, but it’s crucial to clearly understand what task it should solve for businesses. And customer loyalty is perhaps the most significant challenge for every business owner, especially in niches with dozens or even hundreds of competitors.
Conclusion
Blockchain in e-commerce is not just a trend. We believe it’s a real catalyst for change. Of course, implementation takes time. However, looking at how this technology is conquering the world, global changes won’t make us wait for long – you can be sure of that!