Today, e-commerce has revolutionized the way people do business, especially in the retail sector. As opposed to ten years ago, when most businesses were brick and mortar, today, even most brick and mortar businesses have an e-commerce presence. Companies such as eBay, Amazon, and Shopify have leveraged the power of the internet to help people buy goods from all over the world.
Since many small businesses know that competing against giants such as Amazon is futile, they end up joining up. This would often cost them about 15%-20% in commissions. These commissions being what they are, either eat into the already thin profit margins. To avoid this, some of these costs end up being shouldered by the customer, which means having competitive prices is out of the question.
Here is how DeFi or decentralized finance can make the e-commerce sector that much better:
In a world full of technology, one of the biggest challenges for customers is privacy. Because we interact with technology all day, we have a huge digital footprint. This has been quickly becoming more valuable than oil in our modern world. Companies often buy and use this data to feed into their artificial intelligence. This is to provide a better recommendation of products for online shoppers. For people who would rather have their privacy, decentralized finance (DeFi) can be very helpful. Using DeFi means that your identity is secure and the offers are as transparent as can be. Additionally, users’ IP addresses, shopping trends, location, and data won’t be revealed, meaning you are safe from prying eyes.
Keeping customers coming back to your place of business is not easy. It needs strategy and finesse to hold on to that customer who is being bombarded by offers from other stores left and right. Loyalty programs are one such way businesses ensure that their customers keep coming back to them. As is today, loyalty schemes are quite inefficient in the way they operate. Since many retailers have their own systems, customers are forced to register for each one individually. Not only is this very inefficient, but the time-starved client will also mostly forego discounts if it means filling up another form. With DeFi in the picture, payments are frictionless, and would only require a single address to get reward points where you shop. DeFi also means that these loyalty schemes can also transcend borders for multinationals. This means you can get the same rewards from your store of choice regardless of where you are from.
Smarter shopping powered by smart contracts
As DeFi technology gets better, innovations can help make people’s shopping experiences that much better. For instance, a new platform called Uquid is making waves in the industry by taking advantage of underutilized concepts in business. For instance, this platform has a concept called shopping mining, where new tokens are generated whenever a client makes a payment. Using smart contracts, the system immediately and automatically releases these assets upon purchase of an item.
Such a DeFi ecosystem means that customers can pool together goods of about the same nature. This allows clients to monitor them in real-time. Because of that, the customer is very knowledgeable about what products are on the market, their availability, and cost. The system makes them more informed and helps in making a decision that usually saves time and money.
Most e-commerce shops are built with a certain demographic in a certain geographic location. That’s because it makes logistics a bit easier and also doesn’t involve currency exchange issues. With DeFi in play, e-commerce shops don’t have to restrict themselves to one country. Although they have to figure out delivery logistics, issues of currency will no longer matter. A person from anywhere in the world can easily and instantaneously make a payment without worrying about the rates and all. This also helps to open up a business to entirely new revenue streams.