Intro: Blockchain and e-commerce are a match that works.
Although the term “Blockchain” has received more media attention in recent times for everything concerning its most famous digital currency (Bitcoin), the following analysis focuses on the technology behind it and the value it can bring to digital commerce and various related industries.
Blockchain has the ambition, increasingly validated every day, of enabling a transformation from an “Internet of information” to an “internet of value” (Tapscott and Eucner 2019) through the transfer of virtual resources, such as digital information between parties, which can potentially influence many e-commerce related processes. This includes providing traceable and identifiable quality products, reducing delivery times, and logistics processes, the necessity of providing secure payment methods, managing inventory, and containing costs to streamline financial processes. E-commerce and blockchain both involve transactions, and it is clear that one represents the applicative tool of the other.
The focus of the following chapters is on identifying and stimulating discussions about some advantages and applicative opportunities for digital commerce related to various economies.
Some of the applicative advantages from different perspectives of e-commerce.
The exciting aspect of the combination of technology and e-commerce is the win-win relationship between the parties involved, being beneficial for both sellers and buyers. When selling a product online, it is essential to be able to convey its complete value to the end consumer, overcoming the non-tangibility of that object. In this way, the online showcase, as well as being optimized from a communication point of view, must be able to genuinely communicate that object through its authenticity, origin, and the values of the brand it represents.
Warranty of origin – example in the food economy.
Blockchain allows for an infallible and immutable tracking of all steps in the supply chain process, ensuring a secure connection between suppliers and buyers without any loss of information. Direct to Consumer (DtC) brands, especially in the food industry, will be a clear example of this as they guarantee the safety and quality of their products in the market. When connected to IoT technologies based on the exchange of information between objects on the network, it becomes possible to monitor essential requirements for some food products, such as the cold chain during transportation, with simple sensors.
Q-Commerce (Quick Commerce) will also acquire value for everything related to food delivery. Several startups are working in a retail sales scenario for fruits, vegetables, and “land-based products” (from the producer to the consumer) where the value of the product will be guaranteed by blockchain technology.
On product authenticity – an example in the fashion and art economy.
The problem of counterfeiting and the significant problem to the Made in Italy economy (according to OCSE estimates in 2019, it causes over 400 billion damages to companies globally) will be overcome. In practice, through distributed ledgers, it is easy to imagine how companies can register and certify all original clothing items, and the customer will have the certainty of purchasing an authentic product that can be traced back to the corresponding blockchain that certifies the manufacturing company. At the time of purchase, the transaction will be recorded on the blockchain, and that data will remain immutable and long-lasting over time. This also provides an additional advantage for the secondary market, where the customer who intends to buy an item from another retailer can have security on the product.
The same goes for the dynamic art market, which is conquering mass interest, allowing for sector expansion. “Authenticity” is already an essential document used by auction houses or galleries necessary for the sale of a work of art. Blockchain will make this document digital and automatic through smart contracts that will guarantee its origin in a transaction and recorded in a chain of blocks where its history can be traced (startups such as Veritas and Maecenas work in this field).
On review management – the Amazon case.
The aspect of consumer feedback is a key element for any product that intends to be sold online. Consumers choose one product over another by following the advice of former customers and reading the responses to those comments to finalize a purchase. As a result, it is not uncommon for sellers to falsify reviews to influence customer decisions. This problem grows proportionally with the expansion of e-commerce, and blockchain is a solution that big players (Amazon first and foremost) are providing to implement. The e-commerce giant is fully customer-oriented, and we increasingly read news about legal actions taken by the company against hundreds of third-party brands operating on the platform. Soon, blockchain will be used to verify reviews, ensuring that they are only inserted after a real purchase and digitally mapping the information of the consumer who purchased and reviewed a product. It will also make the platform more reliable if it guarantees the security of a comment.
E-commerce in the Content Creators Economy.
Content creators play a crucial role in the development of e-commerce sites and in promoting their related products. Therefore, the payment system for them will be an important element through which blockchain technology can be expressed in a disruptive manner. Social platforms such as YouTube, Tik Tok, and Facebook are centralized, which means that the data and “energies” of all content creators remain “trapped” in their networks. In addition, there is no economic benefit to users scrolling through their sites. With a decentralized system, the game would change, where the network would be managed by the users themselves (such as nodes of the blockchain chain) and content creators would have full benefit from their relationship with their audience, making them an active part of the relationship by rewarding them, for example, with digital tokens related to the artist. We will see how a photo, video, or sound generated by the content creators will be transformed into NFTs (non-fungible tokens) and everything will move on a decentralized network and in the hands of the community.
Conclusion.
Like any respectable innovation, the time to absorb it and then use it requires social maturation and daily use cases that actually simplify its use.
How many times has a train been delayed or a trip canceled? The ticket was certainly already purchased (most likely through an online transaction) and the refund process will be boring and intentionally cumbersome from the issuing companies to avoid the procedure. It would be much fairer for the ticket payment to be based on the use of that asset, and therefore, if the trip is canceled, no amount should be deducted because no asset has actually been used. But again, if the train is delayed, the person using that means of transportation should pay a lower price than the original title.
The same would apply to the “contrassegno,” a fully Italian institute in e-commerce, where it is customary to pay for a product after purchasing it online, at the time of receiving the goods. The reasoning is fully understandable, but what happens if the product does not arrive due to reasons that do not fall under the selling company? What if the courier lost the package? One of the parties (seller or buyer) will suffer damage. With blockchain, a train journey would be more democratic and an online purchase could be more reliable.
Dr. Claudio Gaudenzi CEO and Co-Founder of E-Bridge Group
Digital Entrepreneur at Aloo Alisha International & E-Bridge Group | E-commerce & Private Label Retailer | Start-up | Legal | Verticals | People Connector.
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