eCommerce refers to the non-physical buying and selling using electronic transactions made through websites, mobile and web apps, among other digital channels such as social media. It involves a wide range of activities such as online shopping, online banking, online bill payment, and online ticketing, among others.
eCommerce accommodates both small and big-sized businesses. The eCommerce industry has seen massive growth, especially since the onset of the Covid 19 pandemic that restricted movement and in-person operations.
However, this growth is also significantly driven by the high global digitalization and the emergence of enabling technologies such as blockchain. With the help of experts providing blockchain development services, you can transform how you do business and gain the reward of gaining a global audience and seamless operational efficiency around the clock.
What exactly is blockchain and how does it apply in eCommerce?
Even after this technology has been around for over a decade, some people still find it a mystery and don’t understand how it works. However, the simple definition is that it’s an innovative technology that operates on a decentralized network, free from intermediaries. It has numerous use cases across all industries helping to streamline operations through its efficiency, speed, trustlessness, and high security.
In eCommerce, blockchain allows for better transactional efficiency by cutting down the time it takes to fulfill orders and securing the transaction through a binding smart contract. Since blockchain isn’t restricted to a region or time, your business also becomes unbound from these issues. In addition, international transfers are completed in real-time, eliminating delays and customer frustrations. Here are some top ways to apply blockchain in eCommerce.
Improve transactional security
One of the top things customers in the digital age value most is the security of their data. Customers want to be sure that they can trust you not to expose or exploit the information they share with you during a transaction. And this is a genuine concern going by the number of cybersecurity cases in the eCommerce industry. The assurance that the information will not leak to hackers can help you gain and retain customers better.
There are various ways eCommerce sites can keep customer and business information safe. One of these ways is through payment tokenization. Simply, it means that you create tokens for the payment details or substitute the payment details with a code that allows a customer to transact almost anonymously. Tokenization can shield a customer’s credit card details, their account number or address with a unique algorithm of numbers and letters.
That means even merchants don’t get to keep a customer’s data, therefore, creating an improved transactional space with high security where cyber criminals can’t interfere and steal data.
Reduce Shipping Costs
Blockchain technology plays a key role in monitoring and managing products along the supply chain. As an integral part of the eCommerce industry, the safe and reliable movement of products until they reach their desired end is critical. With the help of blockchain, you can monitor every movement your products make, the changes that occur along the chain, and notice any anomaly in time. This reduces time, which increases shipment costs in case of losses or returns.
However, if you can avoid all the issues and mistakes that lead to increased shipping costs, you can save money and increase profits. According to one survey, customers easily abandon the products at checkout when they see what they deem as high shipping costs. But for most online stores, this is necessitated by the many intermediaries the products have to go through. With blockchain, you can eliminate some of them such as banks, and ship products at a lower cost to the customers. And since you’ll have an efficient tracking system, the cost of insurance can also go down and there is a minimal risk of loss, damage, and returns
Quicker payment completion
Traditional money transfers are lengthy, time consuming, and unreliable. For example, if a customer purchases a product on Thursday evening, the payment gets a glitch, and the next day is a public holiday, they’ll wait until the bank opens on Monday for assistance. This is not only frustrating to the customer; it is for the seller as well as it potentially puts them in a bad light.
This reliance on intermediaries to complete transactions is one of the biggest gains blockchain technology offers to eCommerce sellers. Quicker checkouts equal higher customer satisfaction. Blockchain offers that peace of knowing that no matter when and from where your customer orders goods, the transaction is affected immediately. This allows you to fulfill more orders with fewer hitches, boosting sales and return on interest.
Preventing fraud
Apart from helping to lower shipping costs through improved supply chain tracking and monitoring, blockchain can also help to reduce fraudulent operations that lead to massive losses. Fraud occurs when unscrupulous persons create fake transactions to defraud stores and customers. One example of these fraudulent transactions occurs through phishing scams where hackers and cybercriminals corner customers to share details which allows them to access and steal bank data or credit card details.
Later, they use this information to order goods and pay with customer details. These types of fraud among others like selling counterfeit products can affect the eCommerce industry. But blockchain can help to prevent these cases. Transactions made on blockchain are verified and tamper-proof. Using blockchain applications and systems can help you build higher trust and keep your customers safe from fraudsters.
Product receipts and warranties
Warranties are an important aspect of selling as they provide the information customers need in case of default products and the manufacturer’s responsibilities. But most times, customers don’t bother with that part of the sale and similar is the case with receipts. But in case of anything that requires them to claim from the manufacturer or your store, these two documents are very important.
With blockchain, customers can save these documents into the cloud and access them anytime they need it. This allows them to have a good record and evidence of the transactions and also proof of sale and warranty, in case it’s ever needed.
Takeaway
The eCommerce industry is a big player in the global economy and an important industry for everyone. Blockchain can help to streamline its operations and create improved interactions between customers and retain stores. If you run an online shop, it’s a good time to consider ways to boost your operational efficiency with blockchain.
