New entrants into the e-commerce arena are fueling the concept that blockchain can elevate online retail by remedying the power imbalance between brands and shoppers.
At its core, blockchain is a distributed database technology that’s decentralized; rather than existing on one central computer, blockchains live on multiple computers, making it difficult to amend records, or nodes, stored on the blockchain. That built-in immutability, coupled with “smart contracts,” is largely what makes blockchain so attractive to so many industries.
Because blockchain allows for a “single record of the truth,” consumers can use the database to store their personal data, prove they are who they are and attract brands based on their value to that particular label. E-commerce blockchains stand to cut out the traditional retail middleman and connect brands and consumers directly and transparently.
ApolloX, among the newest players in the nascent space, said its global blockchain platform will “empower e-commerce businesses with trust, transparency, data ownership and minimal fees.” The startup aims to create an open and democratic ecosystem of peer-to-peer transactions sans “monopolistic intermediaries” and said it will leverage community-based arbitration and blockchain’s smart contracts to safeguard shoppers from fraud and resolve any disputes.
“Today’s e-commerce industry forces sellers to pay anywhere between 25 percent to 50 percent of the sale price to gain traffic and trust,” Will Li, ApolloX’s founder and CEO, said. “Blockchain technology and [the] token economy [are] a promising solution. By rewarding positive community contributions, ApolloX can reduce the cost of traffic and trust by more than 50 percent and form a transparent and equal e-commerce environment.”
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Li said he expects products sold via e-commerce blockchain to cost 10 less than on traditional online retail sites. “This is going to be a revolutionary shift in e-commerce,” Li added.
Shopin takes a similar approach to improving online commerce with blockchain technology. CEO and co-founder Eran Eyal told TRAUB in its “Blockchain Primer Pt. 2: How Retail Can Benefit From Blockchain Technology” report that Shopin was created in reaction to the “rapid deterioration of so many incredible retail brands.”
“Using next-gen artificial intelligence and blockchain technology, Shopin is helping to create a more sustainable retail economy where retailers become stronger by working together and shoppers get reward,” Eyal said in the report. With brick-and-mortar retail going through an at times harsh transformation, blockchain can help to restore consumer confidence and trust in brands.
Unlike ApolloX, Shopin envisions transactions still taking place on retailers’ own e-commerce sites and in stores. However, shoppers can create a Shopin profile that stores their likes, dislikes, preferences and more. Armed with this shopper-specific data, retailers can market directly—using the platform’s proprietary technology—to relevant consumers based on this personalized information, raising conversion rates while lowering abandonment via targeted recommendations and offers, Shopin said.
“The idea is to enhance the current shopping experience both in-store and on the web without trying to change consumer behavior,” Eyal said.
In a world where data breaches are an unfortunate norm, Shopin said blockchain offers the only means of safely and securely storing consumer data. “Additionally, blockchain enables an environment where competing retailers can benefit from each other’s purchase data without directly sharing it,” Eyal explained. “This unique ability allows Shopin to power retailers’ product recommendations in a way that truly rivals e-commerce aggregators such as Amazon.”