As blockchain technology grows in popularity and usage, e-commerce businesses are realizing just how revolutionary the technology is, and how it can solve many of the problems the industry is currently facing.

1. Growth

Decentralized transactions allow merchants to expand their reach across borders and simultaneously grow their businesses to levels that were previously constrained by central authorities. Blockchain technology also allows third-world countries to trade online more easily, as consumers and merchants no longer need a payment intermediary thanks to peer-to-peer technology enabled by the blockchain. This will result in massive growth for existing online stores (and new ones coming in), thanks to their increased reach. 

2. Security 

The pure decentralized nature of the blockchain is also such that it is impossible to alter the data, thus removing the possibility of any fraudulent transactions. Additionally, due to self-executed smart contracts, business partnerships will strengthen and efficiency will increase. Thus, it will create a “trustless” environment where users will not need not know or trust each other to enter into an agreement since any manipulation of the data will be rejected by other members in the network. 

3. Counterfeit Products

E-commerce companies are facing a huge problem of counterfeit and substandard products due to difficulty in regulation and selection of vendors, which leads to increased returns and customer dissatisfaction. Blockchain technology solves this problem by enabling the verification of all information and claims associated with a product, allowing consumers to quickly and easily be able to check the purity, quality, or origin of a product, and thereby building more trust and loyalty.


4. Supply Chain Management

For certain products, ethical sourcing and/or sustainability is the key to its ethos and potentially success in the marketplace. But until now, that was always one of the most difficult things to get insight on. However, blockchain technology allows both customers and organizations the insight and ability to track complex variables related to both sustainability and ethical sourcing. This helps procurement organizations in all industries lower their costs and improve performance while driving greater value for their companies.


5. Payment

Paying vendors is not always as easy or straightforward as it may seem. But now with the blockchain, the entire payment process has been simplified and been made more efficient as the payment intermediary or central authorizing body has been eliminated. As a result, transactions can take place in real-time and also lowers operational costs. 

6. Exchange Rates

With cryptocurrency, we now truly have universal currencies – which allows consumers and businesses to transact all over the globe without needing to worry about exchange rates. 

7. Digital Identity 

Passwords and authentication requests have proven to be limited in their effectiveness in protecting data, and stealing a user’s credit card information has become easier for thieves. Blockchain technology helps to prevent this from happening with a digital identity that is safer and easier for users to manage with digital identities that are based on a uniquely random set of numbers assigned to each user on the blockchain network. 

8. Customer Experience

In addition to all the issues listed above, there are also problems in the customer experience. For instance, customer loyalty programs are seeing low redemption rates and are badly in need of a more modern upgrade; there are too few incentives for customers to join them; and data breaches happen with regularity compromising customers’ data. However, using blockchain technology, users can receive loyalty tokens that are interoperable across many programs, and they never expire or lose value unlike traditional reward points. 

9. Proof of Ownership

Additionally, blockchain technology allows businesses and consumers to prove ownership and save product invoices and warranties. Often times consumers get frustrated when they can’t find their paper receipt to substantiate ownership and therefore, the warranty coverage for their product. (I mean let’s be honest – how many people really save all their product warranties?) But with blockchain technology and NFTs specifically, buyers and sellers will be able to conveniently save receipts and warranty data and authenticate evidence of ownership.


Conclusion

In summary, blockchain technology can and will continue to be used to improve e-commerce and solve the problems that currently face it – including providing added security, fixing the issue of counterfeit products, proof of ownership and digital identity, supply chain management, and improving the customer experience.

What is your opinion? Feel free to contribute in the comments below.


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