Besides finance and tech companies, other industries like fast-moving consumer goods (FMCGs), energy, telecommunications, retail, and e-commerce have widely adopted blockchain technologies.
The retail and e-commerce industry is growing at a size of 26.33 trillion and 16.6 trillion, respectively. There will be a definite shift as these industries incorporate blockchain solutions.
Many leading retail and e-commerce companies, like Walmart and Alibaba, have entered the space by using blockchain-based services to streamline their processes. Following this, several multinational corporations began to get involved with the decentralized technology of blockchain solutions to improve their customer experience.
Boosting Shopping Experience via Blockchain
The massive scale of digitization during the COVID-19 pandemic caused an increase in the inclusion of blockchain in retail and e-commerce. Some companies are experimenting with decentralized technologies and distributed ledgers while aiming to bring in transformative changes.
Blockchain technology has several benefits for retail and e-commerce businesses, such as data traceability, automated processes through smart contract integration, and many more. However, consumers also hugely benefit from the technology, as it simplifies their shopping experience and enhances product authenticity. Given that web3 technologies prioritize user experience, it's fair to assume that blockchain-based eCommerce and retail will develop further as the technology advances.
The usage of blockchain in retail and blockchain in e-commerce is widening. 6% of the retail business is based on Blockchain technology, placing the sector as the fifth-largest adopter of the technology.
Citizens from many countries like El Salvador, Venezuela, the Central African Republic, and Cyprus benefited from bitcoin for selling and purchasing necessities when their countries faced hyperinflation and political changes.
Technologies Introduced to Make the Process Simple
Blockchain technologies can simplify processes for businesses and consumers in the retail and e-commerce industries. They can be used to create safe and transparent payment portals, verify the authenticity of a product, track a shipment, and much more.
Payments via Blockchain
Blockchain technology provides transparency and traceability for any transaction. The decentralized structure of blockchain prevents fraud by making it difficult for bad actors to compromise the system. Therefore, consumers using blockchain to make payments have control over their transaction data without the assistance of intermediaries.
This technology helps eliminate the intermediary that has conventionally provided the processing that blockchain can now achieve by itself. Additionally, increased access to technology has allowed people to utilize crypto wallets for e-commerce or local departmental store transactions with Ethereum, Bitcoin, or other cryptocurrencies.
Because these payments are directly taking place through the buyer's wallet and the business, there are no additional service fees, and the intermediaries are eliminated. Thus blockchain can make the payment experience safe and cost-efficient for both the owners and buyers.
Retail and e-commerce are significant sectors with long chains of distribution channels, which can be time-consuming and inefficient to manage. As most central distributional channels are not transparent, many businesses receive fraudulent or damaged products.
Blockchain technology enables faster, more transparent, and cost-effective product delivery. Transactions on the blockchain are easily traceable and can improve coordination between businesses.
Blockchain and e-commerce solutions have made product information transparent by updating transactions in real time via distributed ledgers.
These can be easily traced by scanning the QR codes or RFID tags that are tokenized through the blockchain. The channel updates the status of the products and their conditions as they pass each supply line. Thus, every product bought online or in a retail store can be traced back to its origin to identify its authenticity.
Data Protection and Autonomy
Though blockchain e-commerce platforms increase transparency, they also ensure users' privacy. The authority to access user data belongs to the users themselves. Personal details will not be made public just because one uses e-commerce blockchain platforms. Thus, customer information is always protected from data breaches.
Furthermore, blockchain enables transactions on any platform, as there is no central authority to restrict the purchase. Thus, an individual who prefers to buy medicine or food products from any blockchain e-commerce platform can easily do so. The user retains autonomy over how and where they spend their currency while the transactions are executed through smart contracts and blockchain systems. This can also promote seamless global trading.
Companies Stepped Into Decentralized Retail, Blockchain, and E-Commerce
Amazon is a prime example of the implementation of blockchain for e-commerce. Amazon Web Service (AWS) is integrated via the blockchain to maintain immutable transaction data. AWS's blockchain template can be used to launch an enterprise Blockchain, which is used to scale up procedures, including international transactions and tracking supplies. This is managed via Hyperledger Fabric and Ethereum, enabling businesses and users to connect without intermediaries and eliminating miscellaneous and overhead costs.
Alibaba is a widely used e-commerce platform considering its prominent position in East Asian countries. Alibaba Cloud Baas (Blockchain as a Service) works similarly to AWS and supports product traceability from the point of origin to the point of destination. This allows the users to look through the products' supply chain process via real-time data storage.
The world's home largest improvement retail chain, Home Depot, is a classic example of blockchain retail use cases. The company uses the IBM blockchain to oversee a faster and more efficient supply chain. This helps maintain a transparent and trustable retail and vendor relationship as the blockchain supply chain improves product transparency.
Nestle is one of the early pioneers of Blockchain technology, which allows users to track their food's origin to ensure its authenticity. Nestle uses the IBM food trust blockchain platform to facilitate on-chain tracking. This began by facilitating milk tracking from New Zealand farmers until it arrived at their Middle Eastern warehouses. Following this, many of their products are now traced through the blockchain.
A transparent supply chain, easy-to-use and cost-efficient payment gateways, and many more features of blockchain technology have provided enormous benefits for distributors and consumers.
Once Central Bank Digital Currencies (CDBCs) are normalized, and Blockchain technology becomes widely used, e-commerce blockchain and blockchain for retail shall enable the customer to have a sophisticated shopping experience. The world is moving towards a new era of web3 digitization, as incorporating blockchain-enabled services is slowly transforming all industries.