Bringing Blockchain Technology to E-Commerce: Current Trends
Online retailers are seeking solutions to problems plaguing the industry through Blockchain technology
While online retail sales have increased astronomically over recent years, in the online retail space, from shoes, to purses, and even to software-as-a-service (SaaS), retailers are facing challenges in the ways that they reach and satisfy customers.
New Blockchain technology solutions are coming that will help to simplify the customer acquisition process, as well as help customers to make informed choices before buying.
Retailers and returns
We’ve all been there. You find the perfect item for sale online and purchase it, only to discover that it’s actually a fraction of the size you originally thought. Our immediate disgust wears off, and after a few days of procrastinating, we throw it back in the original packaging and send it back.
The fact that this scenario is ubiquitous is not good for the online retail market space. Returns are a major struggle for online retailers, totaling $260 bln last year alone. Packaging is damaged, restocking is costly, and consumers have come to expect better return service than during the early days of Amazon.
The problem with online retail sellers is that customers are unable to kick the proverbial tires before making a purchase. Items such as clothing and shoes are unique, and often simply don’t appear natural in a two dimensional online world.
Other products can be difficult to gauge in terms of size or shape, or even depth. Purses and the like are often returned, simply because the buyer was unaware of the shape of the bottom of the bag.
These problems account for much of the online sales returns. But the problem is that online marketplaces are also losing sales. The big first wave of online retailing has passed, and consumers are not willing to take the risk that the product they see online is really what it looks like.
Solutions through Blockchain
While diagnosing the issue is generally the easy part, finding solutions is not. Creating images that increase sales and reduce return rates can be very costly, often too much for small retailers to handle.
The democratization of content, however, through the advent of Blockchain technology, is creating new platforms, like Cappasity. This is where online retailers and web developers can create, share and monetize new 3D images without the centralized profiteering they’ve come to expect from enterprise-level content providers.
Blockchain technology allows for creators and users alike to share content via peer-to-peer (P2P) networks, allowing creators to work directly with and sell content to online retailers. Further, Blockchain technology makes it possible for smaller image creation firms, or even individuals, to begin creating and monetizing new images.
Decentralized P2P platforms that make data sharing and transfer simple and easy will ultimately have profound impacts on the ways online retailers market goods and reduce return rates.
Online SaaS retailers finding Blockchain solutions
Online software retailers have also struggled with finding and keeping customers, because of the centralized nature of the current SaaS ecosystem. Software producers create quality content for different solutions, but are unable to effectively move it to the marketplace due to centralized hubs in software management.
Companies like Apple through the App Store, or Google through Google Play, have autonomous control over what types of software reach mainstream users, and apart from these centralized software hubs, companies have a hard time reaching critical user mass for survival.
However, seeing the complexities of moving software development to the market, companies are seeking to create new SaaS systems on the Blockchain that decentralize software creation and distribution.
Rather than centralized hubs like the App Store or Google Play, decentralized solutions create a platform where software developers are able to market their content to users directly, helping software retailers to both market and distribute their content rapidly and directly.
One company, Spheris, is seeking to create just such a platform, removing the centralized hub and replacing it with a decentralized technology solution.
David Shabun, Co-Founder at Spheris, says:
"Decentralization will bring unique opportunities to the SaaS ecosystem: trust-less, fully automated environments without authority, without a single point of failure. People will become both the authority and the infrastructure, instead of data centers and service providers. They will be able to decide how to work, negotiate, trade or simply communicate.”
Other companies are seeking to create similar platforms, allowing online software retailers direct access to consumers without the centralized hub structure of legacy models.
Moving out of the fort
While online retailers face varying challenges in their respective fields, the power of Blockchain technology with decentralized data and finance has provided a new vehicle for retailers to reach and satisfy their customers.
The traditional methods of reaching out to customers presented safe solutions that worked for the first era of e-commerce, but new solutions must be found, as customers become more tech savvy and less willing to deal with enterprise-level complexities.
Expectations for buyers of all kinds of products, both digital and real-world, have increased exponentially, and Blockchain technology is looking to provide solutions to these issues.
Such solutions are still in their nascent stages, as the movement of Blockchain technology into the e-commerce marketplace will certainly continue to mature.