Blockchain technology is coming, and this leads to the transformation of the online commerce business system.
How Blockchain May Change Future Online Marketplaces
PR-Inside.com: 2018-02-09 16:04:37
Online marketplaces of all types have been a widely discussed issue for the last two decades. With their fast development, more and more businesspeople are trying to understand how B2B, B2C, and C2C marketplaces work and to get deeper insight into their successful algorithms. Indeed, online marketing has deserved its success. No one will argue that it possesses many fascinating features, such as:
- it is scalable and fully customizable
- it uses network possibilities efficiently
- it doesn’t require much physical and financial supplement.
However, nowadays it seems inevitable to focus more on the external conditions where the marketplace operations are running. They have their own flip side, that may bring the end to their success.
Two Sides of the Same Dollar
The groundbreaking achievements of online marketplaces (roobykon.com/solution/marketplace
) were fully enabled by the technological growth. After the wide expansion of the Internet, brick and mortar shops became too expensive and uncomfortable, as they had limited working hours and a bunch of workers, who were unnecessary to hire at the online stores. Having removed the chain of intermediaries, installed convenient payment systems and customer feedback algorithms, online marketplaces were able to cut the prices. In such a way they could streamline retail operations and make them much more efficient, available, and quick. But e-commerce hasn’t changed the system itself - while being more productive, it still has its middlemen - banks, wholesale suppliers etc. They make the whole process slower, more expensive, and less productive. So now the time has come when we are to welcome some new kinds of technology that will change the way we see marketing.
The Next Marketing Revolution
There already exists the technology which may equalize progressive e-commerce with the old-fashioned brick and mortar retail. Moreover, you have definitely heard of it - it is blockchain, an open technology, which may record secure transactions permanently and efficiently, making them directly available for two parties involved. It emerged less than a decade ago, but has already revealed its tremendous possibilities (and made use of them!) These days, blockchain is still not very renowned - a complicated transaction technology remains mostly the domain of the proficient cryptocurrency traders. But it can be successfully used for resolving all the intermediary issues between sellers and customers, thus making the world of e-commerce a much more comfortable place.
The Power of Smart Contract
By itself, blockchain technology can only ensure a secure flow of data between two parties. But there exists a way to make it really useful, which is called a smart contract. Actually, this is kind of common contracts, but in a form of “if so, then” algorithms, that can enable the agreement to work in a secure shared place without any interferes from its holders. Based on a powerful blockchain technology, it also possesses the mechanisms to track how well each party follows the agreement. What is more, smart contracts have a capacity to automatically launch mutually agreed actions when all the necessary conditions are fulfilled.
So this may be a really productive way for future e-commerce businesspeople to trade, as it is automatic, honest, and secure. In that case, they wouldn’t need any intermediary help between them and would be simply obliged to stick to their mutual agreements.
Is the Future Now?
But why do we speak of blockchain for marketplaces as if it is unreal if we have stated that it is definitely the future of e-commerce? The matter is, now it is still not the right time to implement such drastic changes. Most of the people, who have just got used to e-commerce platforms, are not going to reject them for the technology, that is both very young and very uncommon. However, it would be careless to ignore the challenges that such direct automated transactions may create for the online business. Some of the big adventurers from different fields have already experimented with it and succeeded:
> WeiFund - a decentralized open-sourced platform, where anyone can launch a fundraising campaign, which is claimed to be user-friendly, thoroughly-tested, and interoperable. The company interacts directly with its creditors using both its own smart contracts or the ones created by them.
>LaZooz - a community-owned transportation application, which assigns its revenues to the developers, users, and backers.
> OpenBazaar - an online peer-to-peer marketplace without any internal fees. It enables people with a possibility to buy and sell any products directly.
The End of Online Marketplaces?
There is also the way of blockchain helping e-commerce to become even stronger, but it depends on a number of factors. First and foremost, the more automated and technology-backed your business already is, the easier for you it will be to dive into the world of smart contracts. If you ensure the most direct and simple trade between sellers and buyers, it won’t be a problem for you to apply even more automated connection. One more way out for online marketplace lies in the capacity of providing its customers with some advanced services, which go beyond the purchase itself. That is the story with Fulfillment by Amazon’s success, as it offers its clients warehousing and shipping, which cannot be handled by blockchain transactions.
Marketplaces can also retain their popularity by offering their customers some kinds of insurance and help. People very often need this and are ready to pay more to get it. This is how e-commerce can make use of blockchain and smart contracts itself, both ensuring its own revenue stream and providing people with experienced customer support.
Anyway, there is one thing online businesspeople should be sure of - there exists a huge level of competitiveness in their field. To succeed, they ought to adjust themselves to the new market conditions, and smart contracts may be one of the most challenging. But the ones who will act wisely and emerge victorious, will also make their business really innovative and prosperous.
Source: roobykon.com/blog/posts/82-how-blockchain-technology-affects-fut ..