Do you know? Global Blockchain for Enterprise Applications Market (2016-2025) is expected to grow with a compound annual growth rate (CAGR) of 26.2% in 2025. eCommerce is one of the top industries to adopt blockchain solutions and streamline business processes.
In this blog post, we will look at the activities of eCommerce that blockchain technology has transformed. Before that, let’s look at the definition of blockchain.
What is Blockchain Technology?
Blockchain is a shared and immutable digital ledger that stores transactional records in the form of blocks. It tracks assets in the entire business network and makes it impossible for systems to be hacked or manipulated.
In any business, tracking transactional and other processes is critically important. Traditionally, this information is handled by third parties such as banks or brokers. Blockchain eliminates the traditional methods that are cumbersome and insecure. Instead, it offers a faster and more secure movement of transactions across entities.
The following are the major advantages of blockchain technology in this increasingly digital world.
- Instant traceability
- Highly secure
- Greater transparency
- Faster transactions
- Reduced costs
Characteristics of eCommerce
Before diving into the use cases of blockchain in eCommerce, let’s have a look at the systematic characteristics of eCommerce. There are three different operational areas in the eCommerce industry.
- Inter-organizational processes (communication and payments)
- Technological processes (IT support and network security)
- Support and maintenance (corporate strategy and public policy)
Understanding the eCommerce framework is important for its widespread adoption. Building trust and strengthening customer relationships is what contributes to the success of eCommerce. Let’s see how blockchain contributes to the seamless functioning of eCommerce platforms.
eCommerce and Blockchain
One common operation in blockchain and eCommerce is transactions. However, blockchain processes these transactions faster and safer and allows users to store digital assets automatically and manually. Moreover, it handles user operations such as product searches, purchases, customer support, and payment processing.
Ethereum and Bitcoin are two common blockchain technologies used in eCommerce. Ethereum offers a platform to eCommerce businesses that want to manage their blockchains. In contrast, Bitcoin is useful for the consumer end when it comes to selecting Bitcoin as a payment method. Blockchain helps eCommerce track orders and transactions. It enhances the customer experience and mitigates the risks of fraud.
Benefits of Blockchain in eCommerce
The ultimate advantage of blockchain in eCommerce is to reduce transaction and operational charges. Blockchain automates all activities such as payment processing, customer management, inventory management, etc., and reduces the cost of hiring IT support.
Blockchain transactions are instant as they do not require any approval from third-party or traditional banks. Blockchain in eCommerce architecture helps customers process their payments faster.
One of the biggest concerns of eCommerce retailers is to mitigate online fraud and data breaches. Blockchain technology offers transparent infrastructure and focuses on identity verification across multiple parties. Its high level of security makes CRM systems and customer databases secure from any unauthorized access.
Seamless Business Operations
Other than just transactional data, blockchains store the customer information, and their interest, and automate the tasks to eliminate any manual effort. Automated business operations in blockchain eCommerce platforms make it easy to validate ownership and store digital records in mere seconds.
Global Consumer Access
Large-scale eCommerce platforms have limitations when it comes to providing services to customers globally. Blockchain eliminates the need for banking middlemen and gives access to a wide community of eCommerce retailers across the world.
Role of Blockchain in Reforming eCommerce
Blockchain is revolutionizing the economic ecosystem by facilitating both retailers and customers. Below are some of the top opportunities for eCommerce to open doors to a wider eCommerce market using blockchain.
Supply Chain Management
A reliable and traceable supply chain is important to achieve certain business goals. From inventory management to transportation multiple operations are hard to track manually.
Blockchain eCommerce development automates these processes by storing them in a digital ledger. It helps verify the products, and track orders, stock, and payments. Blockchain empowers transparency in the supply chain, increases trust levels, and builds a strong relationship between retailers and consumers.
Store Digital Records
Blockchain eCommerce marketplace stores digital records such as online receipts and order information in a secure way. Paper receipts can be lost easily and lead to disputes among consumers and retailers. Blockchain addresses this challenge by allowing the industry to store all the records online where they could be managed and monitored properly.
Blockchain eCommerce development solutions make use of smart contracts to automate regular business operations. For instance, warehouse management, logistics, customer service, and order fulfillment are some common processes that could be automated to save time and maximize efficiency. It is also cost-saving as it eliminates the need for in-house human operators to view and monitor activities manually.
Reviews are important for the eCommerce marketplace as most of the buyers depend on them to make purchases. Blockchain plays a vital role in verifying the reviews before adding them to the platform. Genuine reviews improve customer trust and loyalty.
Rewards and Loyalty Programs
Blockchain enables reward points in eCommerce and allows retailers to issue cashable reward points to their loyal customers when they hit specific spending. These loyalty programs attract more customers and help businesses achieve goals.