With always more and more consumers from all around the world attracted by online shopping - sales forecast to reach $4 trillion globally by 2020, nearly 15% of total global retail sales, with large e-commerce companies like Amazon, Alibaba, eBay and a large group of other companies which account for over 50% of that market valuation according to eMarketer - packaging will play a pivotal role in brands' and consumers' e-commerce experiences, as it can eliminate consumer frustration with over-packaged and even under-branded goods sold online but, above all, it can answer to consumers expectation from their favoured brands: they view designing packaging online, open the item when it's delivered at their home, and they want it to reflect their expectations from shopping with that brand in-store.
Free from the supply chain restrictions, the retail giant Amazon is, indeed, working to minimize "touches" in the supply chain, maximize the brand experience for consumers, and optimize packaging SKUs (stock keeping units).
Many brands have now understood that they never have to underestimate the potential of e-commerce. Thus, they are asking their packaging suppliers to reinvigorate their products in order to be ready to face the online shopping and social media sharing challenge: this means new shapes, more colors in greater definition, fast delivery and better price.
It's really all about the unboxing experience. But what comes before?
Any given E-commerce product pages full of high-quality photos, product videos, reviews, and information, created at great cost to the store owner, because without them, no one would buy their goods. But is the E-commerce platform that owns all this digital material, in the end. Moreover, sales information and user behavior patterns stored on E-commerce platforms can also be used for unequal competition with selling similar products, just as Amazon does: it arbitrarily advertises its own products and prioritize them over competition.
And there's, of course, the pre-sale fee: traditional E-commerce platforms take a % (it varies by platform, but is generally 10–50%) of the total sale revenue from retailers, which leads to higher prices for consumers and less profit for retailers. It's a lose-lose for everyone, except the E-commerce platform. It's their strategy: they cut-off direct contact between consumers and sellers and this drastically reduces the possibility of creating business relationships. Also, E-commerce platforms offer no incentive for customers to leave reviews or help brands they love and trust in. This is the state of E-commerce at the moment, and if you don't play by giant platforms' rules you're out!
Well, Blockchain doesn't.
Just like this drastically innovative technology is disrupting the whole worldwide industrial system, it is impacting the E-commerce sector as well.
Blockchain will allow decentralized marketplaces to emerge providing, thanks to the lack of a centralized team and the inherent costs, lower prices for consumers and better rules for retailers. Their costs for selling goods will be lower and they will have complete ownership of all digital assets including their digital storefronts (reviews included): they will be recorded on the blockchain and will be 100% sellable, rentable, and tradable.
The ability to combine payment processing, inventory management, product images and descriptions with other business processes means fewer systems to maintain, less need for IT support staff, and fewer administrative tasks to be performed. Maintaining even a small online store is a 24/7/365 job: the power of blockchain enables online vendors to spend less time running their online store.
Additionally, retailers will be able to tokenize their store by launching Initial Coin Offerings directly on blockchain-based E-commerce platforms. This will enable retailers to increase brand affinity, collect more loyal customers that may, one day, also become investors in their favorite projects. It will also deliver new revenue streams as retailers can sell their tokens alongside their products to maximize profit.
The technology incentives users to buy as groups for higher discounts, refer friends auction goods to each other (via token rewards), feature merchants' daily deals at huge discounts, share deals with social media followers, and write product reviews for any goods they've purchased.
But Blockchain can do way more to solve E-commerce leaks!
Let's think about payments. Payment solutions for international e-commerce nowadays are far from perfect (even with PayPal and Skrill) due to high payment processing fees and high fees charged by e-commerce platforms on any sales made by retailers using their platform.
Blockchain e-commerce projects, such as Request Network and ECoinmerce, have an aim to create a blockchain based marketplace using fast and secure transactions for any e-commerce business model and providing low-cost financial transactions, high-security standards, and an overall amazing customer experience.
Blockchain is not limited to processing online payments. Part of the reason for the growth of DLT is its power to interface with new and existing systems. For the e-commerce vendor, this can mean tie-ins between the online store and a multitude of internal and external systems, processes, and partners. By providing a shared ledger that serves the company, the online store, and external entities, there are much more opportunities for vendors.
The current supply chain system has, also, issues only blockchain technology can solve: since data validated on the blockchain network is virtually incorruptible, the supply chain process on a supply chain focused blockchain network is a much-needed solution for supply chain management problems facing the e-commerce industry today, as it will provide a transparent supply chain where consumers can see their orders, this helping increase consumer confidence.
Another way of increasing it for the customers is being aware that their personal data are safe. E-commerce platforms host a very large amount of data collected directly from customers and retailers registered on them and stored on centralized vulnerable servers. With a decentralized blockchain based e-commerce platform, it is virtually impossible to suffer attacks, because it is virtually impossible to hack all the nodes of a blockchain platform.
In addition, there are several other applications related to Blockchain, that can help to increase the E-commerce experience
Inventory Control
Is an application that uses smart contracts to decrement inventory items from inventory as with some standard shopping carts, but replacement stock can be ordered when pre-defined thresholds are reached. A host of other functions can be automated, to ensure that an online store never runs out of product, and that excess inventory is not accumulated.
Product Description Database
Blockchain technology allows this information to be efficiently shared between suppliers, online stores, and with content creators.
Loyalty Rewards Software
Thanks to the power and versatility of smart contracts, customer loyalty reward programs can be totally automated within a blockchain.
Supply Chain Tracking
By using the blockchain to track the supply chain, e-commerce companies can ensure that vendors do not substitute products without notice, and that transparency is maintained throughout the process.
With these solutions offered by blockchain technology to help solve the inherent problems of the e-commerce industry, Amazon, Alibaba, and eBay have already responded by working on blockchain research and development.
As E-commerce is rapidly becoming the storefront for merchandisers the world over, Blockchain technology is rapidly becoming the backbone of E-commerce.