My thoughts on four use cases that blockchain can directly benefit merchants involved in online retail.
It’s been a buzzword we all hear every day, but blockchain is much more than a fad. The technology — which provides the foundation of cryptocurrencies like Bitcoin, Ethereum, Litecoin, and more — has the potential to transform the retail landscape, from inventory management and payments, to financing, insurance, supply chain management, and more.
A recent Barilliance study found that 3 out of 4 Shoppers do not purchase items that they put into their carts. This is obviously a huge loss of revenue for eCommerce stores. It also goes to show how important a frictionless user experience (UX) is to combat this trend.
Bringing that elevated experience design to independent merchants is a major driver in the success of market leaders like Shopify and Squarespace Commerce. Given their large R&D budgets, these firms can afford to test and iterate successful UX at a level that SMBs simply cannot. Blockchain can take this to the next step.
Blockchain technology enables more secure payments, an easier checkout, and a consistent user experience across multiple stores. Imagine being able to conveniently share your payment information with every vendor without having to log in, or being able to purchase items across the world with the same ease as purchasing goods locally in your local currency.
In 2018, it’s estimated we’ll see almost $700 billion in cross-border shopping spend. By 2020, cross-border eCommerce is estimated to reach $1 Trillion. Around 54% of US digital shoppers reported making online purchases from a foreign site in the past, and 67% of global consumers who shop abroad claim to do so because prices are lower outside of their own country. (source)
This means Brands and retailers need a simple way to accept a broad array of cross-border payment types including credit, debit, prepaid, fiat, and cryptocurrency.
Blockchain technology, with its ability to seamlessly facilitate cross-border transactions, supply chain management, and shipping and customs practices, can be the driving force towards broadening access to international eCommerce and global shopper inclusion. As proof, Chinese multinational eCommerce giant Alibaba recently announced their T-Mall is moving all cross-border eCommerce to blockchain.
Connecting with Shoppers
In today’s retail landscape, all of the power resides with a handful of big international marketplaces like Amazon, Walmart, and Alibaba. These marketplaces force both brands and individual consumers to play by their rules because they control all traffic and the resultant user data.
We believe there will be a shift from this current centralization model to a focus on decentralized eCommerce stores because, increasingly, users are not comfortable with the data collection practices of large corporations, and brands are suffering from extreme margin squeeze. Even more alarming is the fact that Brands are being forced out of their own markets by having to compete with marketplace private line development that copies their most successful products.
Most important, however, is the simple fact that niche Brand stores can provide a much more personalized, curated experience for Shoppers, while decentralized marketplaces would allow for Brands to flourish in an environment where data is shared, and ultimately return more value to the platform.
Opening access to user data can help facilitate this shift and lead to a closer relationship between Brands and Shoppers and go a long way towards improving online experiences, products, and services.
This model provides for more than just margin maximization. Understanding Shoppers’ needs and preferences informs Brands’ product development and marketing strategies and enables them to offer more insightful promotions for sharing posts with friends, or discounts on future purchases.
Blockchain can empower consumers to capture and reclaim ownership of their personal data as they move across the web and permission that data to Brands within each transaction in return for discounts and loyalty rewards. This way, Shoppers enjoy personal data ownership while Brands get the valuable consumer insights they need to better serve them.
Protocols will be enabled that allow developers to easily create new decentralized shopping platforms and apps that deliver the efficiencies and inherent security of the blockchain.
Blockchain to the Future
Online retail sales are growing growing like wildfire and blockchain is poised to bring empowerment to both Brands and Shoppers more than ever. We look forward to being stewards of the forthcoming retail revolution.