In the United States, e-commerce sales are anticipated to reach $1 trillion by 2022, according to a report by Insider Intelligence. E-commerce, according to a different report by U.S. Consensus Bureau News, accounted for 13% of all retail sales in the first quarter of 2022. These astounding figures show that the e-commerce revolution we are seeing is gaining steam as web3 paves the way for a permissionless and decentralized internet. We might soon see the emergence of networked, non-exclusive platforms that any online vendor or brand can utilize to fuel their operation. Instead of being bound to monolithic platforms that control sales channels, customer data, and operations, Web3 gives brands the freedom to embrace the e-commerce solutions and systems best suited to their needs.
E-commerce has its limitations even if it has experienced remarkable growth and success. Most platforms rely on centralized financial institutions or payment gateways for tasks like transactions, which is the main cause of the issues. Such a centralized method of conducting financial transactions related to e-commerce is not only less safe but also less dependable. All crucial information, including transactional data, can be directly saved into a blockchain in a web3-based e-commerce system. The majority of the issues with the current e-commerce system might be resolved as a result. Web3 e-commerce is therefore disruptive and has the potential to change the e-commerce sector.
Web3: What is it?
Let’s first take a closer look at the idea of the third-generation internet, or web3, also known as the participatory internet, before delving further into e-commerce in web3.
Web2, the forerunner of web3, contains centralized data, which means that only a select few sizable players possess and control it. These significant businesses are sometimes referred to as “Big Tech,” a term created by one of the Ethereum co-founders. This is completely at odds with the digital future that web3 enthusiasts imagine. In order to improve user experiences,
Web3 is a brand-new digital world that makes use of blockchain technology and blockchain ideas like decentralization and token-based economies. Due to its decentralized structure, Web3 eliminates “Big Tech” and other such intermediaries from the picture. This is what appeals to people about web3. Users cannot access the internet with Web3 via centralized platforms like Google, Apple, or Facebook. It has a user-centered web architecture that lets users own and manage their own portions of the internet.
With Web3, there is no longer a need for “trust” or middlemen to facilitate virtual transactions, and blockchain technology guarantees the security and dependability of payments. Since Web3 is not dominated by large tech firms that gather potentially sensitive data, it can better protect user privacy.
Characteristics of Web3
- Information is largely open-source and free.
- Information about transactions is genuine and distinct.
- Data belongs to each individual.
- DeFi and cryptocurrencies have taken the place of the traditional currency system.
- Transactions are anonymous, as are ownership transactions.
- Currently facing difficulties in the e-commerce sector
Even though e-commerce is becoming increasingly popular, it has its own drawbacks. The major e-commerce difficulties are as follows:
Online identity verification: How can a business tell if a customer on an e-commerce site is legitimate? Are the information they enter accurate? Do people actually care about e-commerce goods? If you don’t have all of these details, how can you continue? Things can get very challenging. However, by making an investment in online identity verification, this issue may be resolved.
Cyber and data security – Because e-commerce involves a lot of information and data, security breaches are one of the biggest problems. Technical problems involving data can have detrimental effects on the brand’s reputation and day-to-day operations.
Attracting the ideal client -These days, consumers have a lot of options. They spend a lot of money on research before making purchases. How can you be sure they pick you out of all the other options? How do you locate the ideal buyer who will pay your price for your product? It can be challenging for businesses in the e-commerce sector to draw in the ideal clientele.
Experience of the customer – A good e-commerce website must offer a satisfying user experience. Customers anticipate having a same experience to one they would have at a physical store. Therefore, it’s crucial to take into account the website’s usability, content flow, segmentation, and retail customisation of goods based on customers’ preferences.
Two facts demonstrate the significance of consumer loyalty. First, given the rising costs of marketing and advertising, getting a client can be more expensive than retaining an existing one. Second, selling to an existing customer has a better success rate than marketing to a brand-new client. These two facts demonstrate how important customer retention and loyalty are. Once a consumer has made a purchase or used a service offered by a merchant, the customer’s loyalty is crucial. They must make sure that this customer remains a lifelong client.
Converting shoppers into potential customers – One of the most challenging e-commerce activities is turning visitors into paying customers. Even if a website offering e-commerce goods may receive a sizable amount of traffic, hits, and impressions, the predict sales numbers may not be met. This is yet another urgent issue facing the e-commerce sector.
Analyzing competitors in light of increased competition A “Jam Study” that was once carried out to gauge consumer awareness came to an unexpected conclusion. According to the findings of this experiment, the likelihood that customers will make a purchase increases the less you offer them. People are sick of having so many options. You can find thousands of possibilities by conducting a straightforward search. So how do you make a decision? Due to all of this, it is now challenging for merchants to separate apart from the competition.
Additionally, it is now more challenging to convince customers to visit their website rather than making purchases from other sellers. Most e-commerce systems rely on financial institutions or payment gateways to perform tasks like processing payments, which is the main cause of these issues. They will have direct access via using blockchain, which will fix most of the issues with the present system.
Customer service – As e-commerce is expanding quickly, so too has the population of e-commerce users. On numerous e-commerce platforms, however, a growing number of individuals experience a variety of problems virtually daily. Chatbots have been add to customer assistance, allowing for quicker request processing and ticket response, however these are not long-term fixes. For instance, a lot of chatbots irritate and displease customers.
Cross-border e-commerce – Due to a lack of engagement with clients from beyond their linguistic and geographic range, many e-commerce websites have a tendency to become stagnant. Customers who can’t communicate in the site’s primary language will search for different merchants to have a better experience. Due to varying prices and tax rates, consumers are deterred from making international purchases.
Marketing budgets – For e-commerce companies, digital marketing is becoming the norm. To increase ad expenditure, more businesses are relying on social media and digital marketing. Clicks and online advertising space are becoming more expensive. For small and medium-sized e-commerce retailers, this can be very expensive. It is also among the most difficult problems.
Data security – Modern consumers are fully aware of the significance and necessity of protecting their data. The data of their users is protect from third parties by Apple and other device manufacturers to the best of their abilities. However, there are still issues with data privacy in the centralized e-commerce sector.
Advantages of web3 e-commerce for companies
The e-commerce sector is already being impact by Web3 and related technologies like NFTs and cryptos, and this trend is likely to continue in the future. After all, as organizations of all shapes and sizes innovate at a breakneck pace, the use cases for blockchain are growing. Let’s examine some examples from the real world to discover how this impacts the e-commerce environment.
Decentralized banking or cryptocurrency wallet
On
web3 shopping website like Shopify and WooCommerce, cryptocurrency payments are accept.
markets that operate independently
Users will be able to choose what will be generate on Web3’s decentralize markets. It will be a market run by the community, with complete user control and freedom of exchange.
Trustless e-commerce powered by blockchain
Consumers will likely use cutting-edge, distributed, contract-enabled apps known as decentralized apps, or dApps, over the blockchain in the near future to make purchases from online stores. These transactions will be immutable, trustless, and capable of being carry out by smart contracts, which are self-executing programs. Fraud, chargebacks, and returns will all go down as a result. Although today’s e-commerce is still mostly driven by trust, web3 will place less importance on trust because the blockchain ensures trustless transactions. Bitcoin payments for online purchases will be accept as standard, just like credit cards or PayPal.
E-commerce loyalty incentive schemes based on NFT
NFTs are employe in e-commerce to make loyalty programs profitable. Customers that participate in these programs receive points for every dollar they spend, which they can exchange for goods, special offers, or even larger prizes. NFTs allow businesses to provide more worthwhile loyalty rewards. Instead of just providing customers random points, businesses can now give them NFT-based tokens with a predetermined value.
Metaverse consumer experiences
There isn’t a single definition or model of the future of the metaverse, as there are for many other new technologies. In the metaverse, new technologies like blockchain, cryptocurrencies, and augment reality/virtual reality are combine and expand. The metaverse can be characterise as a constantly growing world of 3D virtual environments that have their own economy. In the metaverse, e-commerce companies have a fascinating potential and challenge to develop distinctive customer experiences.
NFTs to create and profit from communities
The Proof of Attendance Protocol (POAP), which demonstrates how entrepreneurs are enhancing NFTs—exactly what their company idea is—shows. The main goal of POAP is to transform attendance at events into NFT assets. The POAP is represent via badges. For instance, you could instantly scan a QR code to get an NFT souvenir that gives you access to a community online.
Endnote
The decentralized web version known as
Web3 app development company aims to fix the problems with earlier web versions like Web1 and Web2. New standards in e-commerce may be anticipate with a larger choice of alternatives for customers as NFTs continue to blossom and AR and VR gain popularity as experience-enhancing technology. Today’s firms want to be accessible to customers whether they are making purchases online, offline, or through social media. With the connectivity that web3 offers, omnichannel strategies will be even more effective as firms can integrate all of their operational systems and sales channels to offer customers seamless e-commerce experiences. Brands may run their apps without a single point of failure and take use of blockchain’s robust technology stack thanks to Web3’s intrinsic attribute of decentralization. Without a doubt, Web3 will give customers and companies the best online shopping experience.
