E-commerce selling has been around for decades now and the evolution of the industry has been exemplary. Over the years, the concept of online selling has been deeply influenced by technological improvements. The latest amongst these technologies is blockchain, which spells new opportunities for the industry with its unmatched potential. From the elimination of middlemen to streamlining of operations and reducing complexities at all levels, Blockchain has a lot to offer to help e-commerce businesses resolve their every day as well as long-term challenges.
Plus, of course comes the fact that this technology is the foundation of cryptocurrency payments makes it even more important for the e-commerce domain. It would not be wrong to say that blockchain is poised to change the way transactions are made. With this, both traditional brick-and-mortar setups as well as e-commerce businesses should be ready for radical changes. We will be focusing on the impact that blockchain is going to have on e-commerce businesses in the near future. But before that, we need to clear some important queries about the Blockchain technology. These queries will help you to invest in E-commerce development services in an effective manner.
What is E-commerce Blockchain?
The E-commerce store has a large volume of customer, inventory and transaction data. These data require proper storage & management for effective results. Blockchain technology address this situation by combining transactions in the form of block and connecting every block in the form of a chain. Every block is saved on a separate computer thus making it secure, scalable & reliable. If you run a Magento 2 E-commerce Store try to integrate it with Blockchain technology for quality results.
How are Blockchain transactions verified?
Blockchain transactions have a proper process of verification. Each node in the Blockchain has a complete history of transactions. When a node knows about a new transaction, it performs multiple checks to make sure that the transaction is genuine. The first check is the signature validation if it is not valid the transaction is denied. It is quite impossible to forge the authenticity, as the transaction validation happens on every node. If you are new to Blockchain technology integration, simply Hire Magento Developer having proper skills & experience for the integration work.
First Things First: Let’s understand the biggest e-commerce challenges
Before exploring the potential that blockchain can unleash for the e-commerce industry, there is a need to understand the challenges and pain points it faces. E-commerce is a complex domain and starting here is a challenge in itself. Survival, sustenance and growth is even more difficult.
Here are some key challenges that sellers in this domain have to face on day-to-day basis as well as in the long run.
- The e-commerce market has always been highly competitive, with players of all sizes offering similar products and services. Moreover, more and more sellers are joining the bandwagon at a rapid pace. This includes new businesses as well as those transitioning from the brick-and-mortar model to this one. So businesses have to embrace smarter business models and technologies to stay in the race, right from setting up exceptional e-commerce stores to streamlining the processes that are to be carried on as a part of the business.
- Besides the challenge of huge competition, another pain point of the sellers is that the traditional business model has middlemen who take away a hefty share of the earnings during the selling process. For instance, sellers have to pay transaction processing fees to facilitate payments for the completion of the transactions. These fees cut down the profits of the sellers to a considerable extent and result in lower revenues.
- Protection of consumer data is another key concern for these businesses as they need to build the customer’s trust assuring them that their personal and financial details are completely safe. Furthermore, the implementation of data security regulations such as General Data Protection Regulation (GDPR) has made data security a critical concern for online enterprises. For this reason, sellers usually have to invest heavily in data encryption and other measures to prevent hacking.
- E-commerce selling is a complex process as it involves an array of operations such as supply chain, logistics, payments, and more. Managing these operations and the intermediaries involved is another key challenge for the industry. From ensuring that the inventory is replenished at the right time, to streamlining the shipping and delivery functions, looking after customer relationships, and more, there are a lot of things that merchants need to manage.
As these challenges have been overwhelming the sellers since the very beginning of this mode of selling, they have been looking for one technology that is capable of handling them all. Fortunately, they have found a perfect answer in the blockchain technology. Being a decentralized system, it brings a host of benefits for the e-commerce domain. Let’s explore how this technology is going to change the face of your Magento E-commerce Store.
Blockchain Will Be The Driving Force For E-Commerce In Future
Despite the positive impact that the e-commerce industry has had on the global economy, things have not been very bright for the sellers in the domain as it has been ridden with challenges since its inception. All these years, it has been looking for a secure technological backbone that can support it well enough and address the diverse challenges that it faces. Fortunately, the Blockchain technology is ready to give it the same today.
Let’s have a perspective of the road ahead as this technology makes its way into this segment:
Enhanced Operational Efficiency:
With its decentralized model, the Blockchain is capable of streamlining operations and driving efficiency into them. Smart contracts are used to regulate the intermediaries such as logistics and payment processing partners. The technology facilitates integration with various management systems and streamlines the overall workflow as well.
As blockchain provides a series of uneditable recorded data, visualization across the supply chains is enhanced manifold. The feature also provides the consumers with complete information of the origin, components, and processing of the products they are purchasing. Blockchain facilitates a decentralized database which gives stores a complete ownership of their digital assets including digital storefronts, product photos and videos, and reviews.
Trust and transparency in payments:
Despite the vast array of e-commerce payment solutions, these are far from perfect. Another significant advantage of Blockchain e-commerce is that it brings transparency in transactions, which fosters the trust of the buyers. Every transaction is recorded in a shared ledger and cannot be modified by anyone.
They offer high-security, radical visibility, and faster processing speed, along with traceability through the decentralized system. Being country and currency agnostic, cryptocurrencies will lower the transaction costs for international e-commerce stores. The technology is poised to disrupt the existing payment methods with the advantages that it offers over and above them.
Bitcoin is perhaps the most well-known use case for this technology. E-commerce sellers can rely on bitcoin and a host of other cryptocurrencies to avail cost-effective digital payment solutions. Since there are no payment processes involved in a crypto-transaction, the currency can be accepted by sellers at a zero processing fees.
Furthermore, blockchain facilitates decentralization of marketplaces and the inherent costs go down automatically. This translates into better rates for online retailers while the prices are lower for the customers as the savings are passed to them. Overall, the technology serves cost-effectiveness for both, sellers as well as buyers.
Dependable Data Security:
Consumer data of an e-commerce store, whether centralized or stored in the cloud, always remains a vulnerable point as it can easily fall prey to weak encryption. Even the most well-encrypted systems can get hacked, bearing in mind the tips and tricks that modern hackers use these days.
The Blockchain technology provides a decentralized ecosystem, which is practically impossible to hack from a single point of entry. Adopting blockchain-based systems will enable the sellers to prevent hackers from breaking into them and getting access to the sensitive customer information and databases. At the same time, it ensures that the business complies with the data security regulations.
With so many benefits, it is highly important to build an E-commerce store integrated with Blockchain technology. But before we do the conclusion, check some important frequently asked questions.
Frequently Asked Questions
What exactly is Blockchain?
A Blockchain is a distributed and digital ledger that is used to record transactions in the form of blocks. All these blocks are interconnected in the form of a chain and stored on multiple computers to ensure proper security is maintained. The information is distributed and can’t be copied in any scenario. Apart from its usage in financial, & health institutions, it is in high demand among the E-commerce industry.
How safe is Blockchain?
A Blockchain is a safe form of transaction and experts consider it innately secure. Blockchain includes private keys that highly-secure as they are considerably longer. It is in this way that blockchain offers a higher level of protection to a user as it removes the weak and easily breakable passwords and online identities.
Seeing the extensive benefits of e-commerce Blockchain, it becomes imperative for businesses to embrace it for achieving expansive growth. If you are an e-tailer who wants to add transparency in all the business transactions and also manage your consumer data reliably, this technology serves the best solution for you. Not only this, Blockchain can reduce your dependence on paper-based legacy systems and open you up to the smarter crypto-contracts too.
Having the right technology partner is a must if you are looking to explore this futuristic technology to take your e-commerce business to the next level. At OrangeMantra, we build advanced e-commerce solutions that leverage the power of Blockchain to open unlimited opportunities for your business. Connect with us and unleash the potential of this innovative technology to take your e-commerce business to the next level.