According to a Pew Research Center study , at least 79 percent of Americans shop online using either the web or mobile apps. Furthermore, the study found that 15 percent of Americans buy online on a weekly basis, 28 percent do so a few times a month and 37 percent do so less often.
This is a significant milestone, given that only 22 percent of Americans were shopping online back in 2000. With disruptive technologies such as blockchain, artificial intelligence (AI), machine learning and virtual reality (VR) entering the online retail space, the industry is poised to experience explosive growth in the near future.
The mass movement to online shopping is so robust that brick and mortar retail stores are closing their doors in droves. In the U.S., over 7,000 physical retail stores closed shop in 2017. This year, an estimated 12,000 more are expected to follow suit.
Blockchain technology and AI are key drivers of online shopping growth. While the former ensures security, transparency and equity, the latter analyzes shoppers' behavior to enhance their shopping experience and show merchants what needs and trends to cater to.
Through machine learning, the AI-powered online shopping tools can learn and adapt to fit consumers' ever-changing needs and preferences.
AI and machine learning rely on big data derived from shoppers' online behavior. This means that online shoppers have to share their data, an issue that can raise concerns for most online shoppers.
Apart from securing the online shopping process, blockchain technology is providing consumers an opportunity to earn extra income by opting to share their data with market researchers. Until now, companies such as Google, Amazon and eBay collected online shoppers' data without needing their consent or sharing the revenue they received from selling the data to advertisers.
What blockchain-powered systems are doing is eliminating these intermediaries and enabling advertisers to buy data directly from the actual consumers. With the use of AI, data can now be compiled into actionable insights automatically.
One promising project on the scene is Shopin , a blockchain company founded by the serial entrepreneur and U.N. World Summit Award for Innovation winner Eran Eyal.
According to Eyal, the Shopin project aims to build a decentralized version of Amazon on a blockchain by enabling retailers to make shopper profiles based on their needs and preferences.
Online retailers ask their customers to join the Shopin platform and supply between three and five years of verified first-party purchase data to help build their online shopper's profile.
The Shopin platform uses AI and machine learning to consolidate data and produce a profile that matches the shopper's needs and preferences, and this information is relayed back to the retailer platform to help them improve the shopper's experience.
Unlike in the traditional model, where all profits go to the advertising intermediaries, Shopin allows the advertisers and actual data owners to share in the profits. When shoppers allow the advertiser to use their data for targeted marketing, they earn Shopin tokens, which can either be used for shopping or can be converted into other cryptocurrencies.
While the Shopin project is the first to create a shopper's profile based on shopping history, it is not the first to decentralize the e-commerce industry.
For instance, a project known as Spl.yt partnered with Science Blockchain and Deloitte to work on a solution that will decentralize e-commerce by automatically performing and recording all activities carried out by intermediaries throughout the supply chain, from product manufacturing to online marketing and sales.
One of the functions that the Spl.yt project seeks to introduce is a universal and decentralized product rating system. This will not only enable shoppers to get accurate reviews but will consolidate data and enable manufacturers and retailers to receive insights that will help them improve their services. The platform is powered by a native token to promote fair and reliable participant behaviors.
As blockchain technology and AI continue to gain recognition in the mainstream, there is a high likelihood that more advanced solutions are yet to come that will change the online shopper's user experience for the better.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of NASDAQ, Inc.