Posted on: Monday December 2, 2019
It’s been a decade when the revolutionary concept of online selling was introduced to the world and the evolution of this industry has been exemplary. Within the past few years, the concept of ecommerce has been intensely affected by continuous technological advancements and blockchain is one of them.
Blockchain offers a variety of new opportunities for the industry through its unparalleled potential; eliminating mediators to centralize operations, reducing complexities for ecommerce businesses to resolve their long-term challenges. However, it’s important to mention that this technology is the foundation of cryptocurrency payments which makes it more important for the e-commerce domain. It would be appropriate to say that blockchain is poised to change the way transactions are made. In continuation, both traditional selling stores, as well as e-commerce businesses, should be prepared for radical changes. Our focus will set on analyzing the impact of blockchain technology on e-commerce businesses in coming future. But prior, we need to clarify some important questions about the Blockchain technology. Those buzz will be helpful for you to spend on the services of a professional shopify development company in an effective manner.
What is E-commerce Blockchain?
A traditional ecommerce store always has a large number of customers, inventory and transaction data, which requires adequate management & storage for effective results. In blockchain technology, this situation is addressed by combining transactions in block form and connecting those blocks in the form of a chain. Here every block is stored on individual computers hereby making it secure & scalable.
How are Blockchain transactions verified?
Transactions in Blockchain has a legitimate process of verification. Every node has a complete history of transactions and whenever there is a new happening transaction, the node performs several checks to ensure that it’s a genuine one. The process starts with a signature validation and if not valid then gets denied promptly hereby making it impossible to falsify the authenticity. Hiring a professional developer is most suitable if you are new to Blockchain technology integration.
But prior to having a look at the unleashed potential of blockchain for the e-commerce industry, it’s required to understand the potential challenges and pain points it faces. The survival, sustenance and growth in E-commerce is difficult due to its complexity as a domain and to start here is a challenge in itself. Let’s have a look at some of the key challenges faced by the sellers on a day-to-day basis as well as in the long run.
The e-commerce industry is becoming highly competitive, with existing players offering similar products and services and more sellers are joining the bandwagon at a rapid pace. It requires businesses to adapt smart business models & technologies to sustain in the race. Another pain point of the sellers is the presence of a middlemen in traditional business models who shares a hefty percent of earning in the selling process. Also the sellers have to pay a transaction processing fees to facilitate payments for completing the transactions. This fee reduces the profits of sellers to a considerable extent and result in lower revenues.
Another key concern for these businesses is the protection of consumer data as they require to build the customer’s trust by assuring them about the complete safety of their personal as well as financial details. The implementation of data security regulations; General Data Protection Regulation (GDPR) has made data security an important concern for ecommerce companies. This is prime reason for sellers to invest more in data encryption and other measures for preventing hacks.
There is an array of operations like supply chain, logistics, payments included in ecommerce business and management of these operations is a key challenge for the industry. From correct inventory replenishment, proper arrangement of shipping and delivery functions, to managing customer relationships are few of a lot things needed to be managed by the merchants.
And since all these challenges can be overwhelming the sellers from very start of online selling, they have been searching for a technology that’s capable of handling them all. Fortunately, blockchain technology is a suitable answer for all these questions and being a decentralized system, it offers a lot of benefits for the e-commerce domain.
E-Commerce Will Be Driven By Blockchain In Future
Regardless of all the positive impacts e-commerce industry has on the world economy, things have not been fruitful for the sellers in the domain because of the challenges since the origin. Also, it has been seeking for a secure technological backbone to support it and address the diverse challenges it faces. Luckily, the Blockchain technology is ready to give it the same today through an array of features:
The decentralized model in Blockchain makes it capable of assigning operations and drive efficiently. Smarter contracts are passed down to regulate the intermediates like logistics and payment processing partners. It facilities the integration with several management systems to streamline the overall workflow as well. Blockchain offers the clients complete ownership of their assets like digital storefronts, product photos, and videos, and reviews.
Another significant advantage is the transparency in transactions, which increases a buyer’s trust. Every transaction is taped in a shared ledger which cannot be modified by anyone. Users avail high-security, faster processing speed, and radical visibility along with traceability through decentralized system. Also cryptocurrencies lower the transaction costs for international e-commerce stores.
Bitcoin is a well-known and most utilized case for this technology. Online sellers can trust bitcoin and other cryptocurrencies to get in-budget payment solutions and since there are no payment processes involved, currency can be accepted at a zero processing fee by the sellers. Additionally, blockchain offers a decentralization of marketplaces, letting the inherent costs going down automatically. It also provide better pricing for online retailers for the customers as the savings are passed to them.
Consumer data of an e-commerce store is always on a vulnerable point due to weak encryption, since well-encrypted systems can be hacked by the tips and tricks used by modern hackers. The presence of a decentralized ecosystem makes it impossible to hack from a single point, enabling sellers to safeguard the sensitive customer information and databases.
Since there are extensive benefits of e-commerce Blockchain making it imperative for businesses to grasp for massive growth. If you require transparency in business transactions and manage your consumer data reliably, this technology is the best solution for you.
Having a right technology partner is must for you to use this futuristic technology at fullest and take your business to the next level. At Pro Web- Unisys we develop robust e-commerce solutions to open unlimited opportunities and take your e-commerce business to the next level.