The eCommerce world is known to undergo continuous evolution. We keep seeing online businesses popping up in nearly every category. Interestingly enough, in a report conducted by the market researcher, it was found that eCommerce sales were responsible for over fifty percent of all retail sales in the United States during 2019–2021.
Furthermore, an unparalleled degree of ease has been brought about by the emergence of various technologies.
With that, it is no surprise that companies are witnessing overwhelming growth in sales. The availability of various tools and resources on e-commerce marketplaces gives businesses of different sizes the opportunity to list their products and boost their brand visibility.
However, do you know what? The industry is still plagued by several challenges, including fraud, high transaction fees, and a lack of transparency.
Well, these issues continue to cripple the industry. But wait, there is one promising solution to many of these problems that is not other than blockchain technology.
Yes, you read it right! So, give yourself some time to read this blog to learn about the potential of blockchain in eCommerce software development services.
A Quick Glimpse Into Statistical Data To Understand The Current Market
Image Source: Statista
Massive growth in global blockchain technology revenues is predicted by forecasts, with the market expected to reach over 39 billion U.S. dollars in size by 2025.
According to the report by Statista, it has been projected that Brazil will be ranked as the topmost country worldwide in terms of retail e-commerce growth. It is mentioned that between 2023 and 2027, the Brazilian e-commerce market will grow at an impressive compound annual growth rate of 14.6 percent.
Further, in the same report, it is mentioned that the global retail e-commerce CAGR during the same period has been estimated at 11.3 percent.
Now, let's see how the implementation of blockchain technology solves several challenges that the eCommerce industry is facing these days.
4 Common E-commerce Challenges That Can Be Solved By Implementation of Blockchain Technology
Challenge 1: Security of Payments in E-Commerce
In this digital era, online payment for any type of service is highly favored by businesses of all sizes and consumers alike, without a doubt. However, the growth in these online transactions has also led to increased concerns over the security of online payments.
Payment solutions within eCommerce software development services are far from perfect. Even using platforms like PayPal does not mean the money transfer will be carried out securely. Thus, the entire payment approach in e-commerce needs reworking.
It is predicted that in 2026, the global value of digital transactions will approach $3,453 million, which is a 21.5% annual rise.
Image Source: Grand View Research
With this, it is clear that in the coming time, online marketers will have to tackle a high volume of transactions. But the problem that they might have to face is a security breach.
A solution to this problem is to implement blockchain technology.
- Yes, with the help of this technology, it is easy to offer secure and transparent transactions. Hiring a blockchain development company is a real game-changer for your business.
- It becomes much easier to track and verify transactions.
- When you implement blockchain, a public ledger would help in recording each transaction, making it impossible to tamper with or counterfeit.
- Apart from security, blockchain also offers fee-free transactions.
- Blockchain technology also enables peer-to-peer transactions. This type of transaction allows parties to transact directly with each other. There is no need for intermediaries such as banks or other financial institutions.
Challenge 2: Data Management and Protection
E-commerce businesses face the daunting task of safeguarding data from tampering and theft.
Fortunately, blockchain technology offers a decentralized and secure solution for data storage. Reach out to a blockchain development company that can make use of smart contracts. This technology in the blockchain network plays a crucial role in making this possible.
They are self-executing agreements that trigger automatically when specific conditions are met. Consequently, businesses and customers can interact directly with each other without the constraints of regulated and centralized platforms.
Furthermore, by implementing blockchain technology into your inventory management system, you can avoid the risk of outdated databases and linear data entry, which are supported by many inventory management systems for record-keeping.
These traditional methods can work well until a source document meets some miscellaneous activity.
However, when such incidents occur, they are often just written off by some companies, which can encourage unethical practices like money laundering.
This is due to the centralization of inventory data, which makes it easy to forge.
Challenge 3: Fraud Prevention and Customer Profiling
The e-commerce industry is facing a big challenge from fraudulent activities that are affecting both buyers and sellers.
Fraudsters use the system to exploit unsuspecting individuals and take their money.
With blockchain, e-commerce businesses can create customer profiles that enable them to identify potential fraudsters.
Profiling customers and analyzing their buying habits can help businesses protect themselves from fraudulent activities more efficiently.
Challenge 4: Automation of Business Processes
The increasing number of orders, customer inquiries, and transactions is causing businesses to struggle. These processes are daunting to manage manually, and even the slightest error can have a significant impact.
The way e-commerce businesses operate can be revolutionized by the use of blockchain technology, which can streamline everything from payments and settlements to supply chain management. This revolutionary change can be brought about by companies that use this technology.
One area where blockchain can have a major impact is in automated payments and settlements. At present, payment processing between buyers and sellers involves numerous intermediaries, each of whom takes a cut of the transaction. The transaction is cut by every intermediary involved in the process, resulting in significant transaction costs for both buyers and sellers.
Blockchain could potentially automate these payments, eliminating the need for intermediaries and resulting in faster, cheaper settlements.
Another area where blockchain could streamline e-commerce businesses is supply chain management. The movement of goods throughout the supply chain, from manufacturers to warehouses to retailers, is easy to track using blockchain. The management of inventory and shipments by businesses could be made more efficient, and the reduction of counterfeiting may even be facilitated with the help of blockchain.
The eCommerce industry has been facing numerous challenges, but the good news is that blockchain technology can solve them! The entire eCommerce landscape has the potential to be revolutionized by it.
By distributed ledgers, smart contracts, tokenization, and secure payment solutions, significantly reduced costs can be benefited, and improved customer trust in their services can be achieved by businesses. With such powerful tools at hand, further progress in this space can be witnessed; it is only a matter of time.
It's high time that you avail yourself of eCommerce software development services and ask the development team to incorporate this technology into your system. To achieve this goal, the assistance of a trustworthy blockchain development company is required.
Act now and join the league of forward-thinking businesses that are already reaping the benefits of blockchain technology.