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Blockchain will soon become a nightmare for all major ecommerce brands. Ecommerce brands like Amazon had for a long time reaped the double benefits of earning from both the product owners and customers. The product owners have paid a good amount of money as retailer fees and other hidden charges, while the customer have almost ‘sold’ his/her soul to the e-commerce brands like amazon or flipkart.
Popular e-commerce brands like amazon and flipkart have revolutionized the way we shop. They have not only impacted our buying patterns, but have also tapped on to our thinking, by taking note of our behavior on their site.
The convenience, low prices, and huge variety of available products have drawn us to E-commerce platforms. But all these benefits come with a very high price tag, for us and the product owners. Yes, you just heard it right. We (the consumers and shop-owners) are actually paying twice (for the item bought and the information passed on). Let’s find out how.
According to Reuters, the U.S. online retail market will reach 1.2 trillion USD in 2020. Online sales will grow at a compound annual rate of 12 percent through 2020 and at a relatively moderate 9 percent over the next decade, according to the Reuters report published in October 2017. FTI stated that Amazon.com Inc’s total share of these online sales is likely to increase to 53 percent by 2027 from 34 percent in 2016. Amazon’s share would represent nearly 12% of U.S. retail sales by 2027 compared with 4% at present. While the online retail market is growing, the problems are not far behind.
We all know the product/store owners invest a good amount of money in photos, product videos, reviews of the products displayed in the e-commerce sites. Digital assets, once uploaded, as per rule, are no longer owned by the product owner. They belong to the e-commerce brand, which may use these resources at its own free will. And as our observation says these pictures are often used quite tactfully to promote the more expensive products, by comparing them side by side with similar products of higher price. Say for example you are looking for a pair of headphones; the first few search results will show the more highly priced products. To get a product, within your preferred price range, you have to drill down further, apply advanced search filters to find something within a small budget.
E-commerce platforms usually take a certain percentage of the total sale revenue from retailers and also charge a per-sale fee. These fees vary between 10%–50% of the total sale price, depending upon the platform chosen. Retailers build the cuts that E-commerce platforms take into the final price, which means higher prices for consumers and less profit for retailers. It’s a win-win case for the E-commerce platform.
Moreover, these e-commerce platforms have their own customer relationship teams to interact with the customers for product review or feedback. The retailers are allowed only a single follow-up mail asking for customer feedback, which may go unnoticed, or end up in the spam folder. The relationship management a retailer can provide suffers as a consequence.
What more, there have been instances where e-commerce platforms have stopped product owners to access to their own page, for reasons unknown. Customers also suffer because of this. Their order is cancelled/delayed without any concrete explanation.
So, how does Blockchain step in here?
Blockchain technology provides a secure system through which individuals and businesses can directly interact with each other for business transactions, without the need for an intermediary (read e-commerce brand). The retailer only has to pay a nominal fee for the network behind the blockchain for validating transactions and securing the network.
The cost of selling goods on ECoinmerce will be less than 0.1% for retailers and best part of it is, they will have complete ownership of all digital assets including their digital storefronts, product photos/videos, and reviews. Data related to digital assets’ ownership will be recorded on the blockchain and will be 100% sellable, rentable, and tradable.
What more? The product/store owners will also be able to tokenize their store by launching Initial Coin Offerings directly on ECoinmerce. This will enable them to enhance brand affinity, with loyal customers becoming early investors in their favorite projects. Also, this will create new revenue streams as retailers can sell their tokens alongside their products to maximize profit.
Blockchain being a decentralized platform will operate through blockchain applications, can be upgraded with consensus from the community. The users, thus individuals and businesses (part of the community), will determine how the platform will develop and function.
Customer’s gain:
Customers who have so far paid for the products they have bought and sold (yes they have, without ever being paid for) their time and effort in writing detailed product reviews, rating products/services, and recommending them to friends over social media feeds, will now be paid.
Yes, you just heard it right.
You as a customer (albeit a valued customer) will make commission from the sales that were driven from a social media post you made and also be incentivized (via token rewards and/or commission) for referring friends, sharing deals with social media followers, and writing product reviews
If you are a retailer, start digging into blockchain solutions and cryptocurrencies for a competitive advantage, both in efficiencies as in capturing market share. Playing into the hype could lead to a super boost for your brand.
Get ready for a more digitized marketplace.
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