Crypto, Christmas and Commerce (Podcast 103)

By Abhinav Girdhar | Last Updated on September 13th, 2023 8:45 am

Using cryptocurrency in E-commerce could soon become the norm, as companies around the world wake up to the possibilities, we look at the advantages and disadvantages of making this change. In this episode, I investigate the rise of mobile shopping, increased adoption of ‘Buy Now Pay Later’ schemes, increased digital transformation, “buy buttons” and the impact of social media integration.

Highlights:

• FBA, fulfilled by Amazon could become a billable selling point
• Amazon is well poised overcome any and all supply chain issues, due to their clever manoeuvring and expansion plans
• Depending on your point of view, crypto payments are a huge opportunity

On this week’s episode of Grow With No Code, we’re discussing Crypto, Commerce & Christmas, as well as emerging commerce trends, movers and shakers in the industry and how you can maximise every opportunity.

What is cryptocurrency?

A new digital form of finance that isn’t regulated by any one central party but instead is typically governed by code. Usually with a finite number of the coin available, users can buy, sell and mine to earn it.

What is decentralised finance?

Arguably originating in a Telegram chat in 2018, a group of software developers and entrepreneurs were trying to decide what to call their movement of new-breed financial services that would be automated, built on a blockchain, and capable of stripping out traditional banks.

Three years later and DeFi’s grown into a booming opportunity. A user with a crypto wallet now has the ability to trade digital assets, take out loans, get insured and so much more!

With around $90 billion of collateral is locked up in these services, and more than 10 million people have downloaded MetaMask, (a very popular digital wallet) to open up access to these networks.

Decentralization means no single party is in charge, so it’s nearly impossible for someone to go rogue and change the rules that govern the virtual coin. DeFi takes this concept a step further. Decentralized exchanges and lending systems use blockchains like the Ethereum network, the brain-child of Canadian-Russian programmer Vitalik Buterin.

While the bitcoin blockchain was originally designed to keep track of bitcoin transactions, Ethereum’s blockchain was created to host programs. It can be seen as a decentralized computer that software developers can make applications or Apps for. Decentralized autonomous organizations (DAO), that have their own rules and regulations embedded in programming code and may issue governance tokens, which gives holders of those coins say in decisions.

Why choose De-fi?

It’s a new more level playing field that opens using cryptocurrency to a wider audience. Without having a centralised figure in charge, users can have full transparency and have a say in what happens on the networks they use.

Regulation is still a hot topic, as there are concerns surrounding how this would affect this emerging space. With both under and over-regulation posing their own risks. Experts say that a unique and adaptive framework is needed to avoid stifling innovation and keeping the networks truly decentralised. With access to cryptocurrency much easier, users are waking up to the possibilities of paying with their digital assets.

Retailers that accept crypto-payments:

• Overstock
• Shopify
• Phillipp Plein
• Travala
• PayPal
• Tesla
• Wholefoods
• Starbucks
• Microsoft
• Lush
• Dallas Mavericks (Basketball Team owned by billionaire Mark Cuban)

Why use cryptocurrency payments?

• Benefits:
  • Lower transaction fees
  • You can be completely anonymous, & you won’t need to go to the tradition methods to set up a bank account – and if you’re bank averse, you won’t need to deal with them anymore
  • Accepting crypto broadens your potential market – reaching new consumers in previously harder to reach areas
  • With Play to Earn crypto games making some real moves in the industry, consumers are enjoying using their crypto to purchase anything from accessories to virtual land. With popularity in countries like the Philippines and Venezuela locals have started playing these games as their main source of income
  • Crypto also offers fast transactions between consumers and merchants
  • Added security for retailers against E-Commerce fraud, as transactions are easily recorded on the blockchain
• Pitfalls:
  • The infamous volatility
  • Taxes
  • Transactions face new issues as transferring crypto can be energy intensive, with high gas fees
  • There is little buyer protection
  • Social media influences volatility
  • Not everyone is excited about crypto
  • Meme coins

This year, the consumer is facing decreasing discounts, shipping delays, inventory issues and perhaps even a new philosophy when it comes to spending. With the effects of the economic ripples of COVID-19 in the background, shoppers lean more towards buying with intention. Surges in online purchases of clothing and fashion can tell us that consumers will still buy even when they have nowhere to go… so they must have a deeper connection to their purchases and an emotional aspect behind buying them. Maybe we should be looking at fashion as self-care and as a form of self-expression?

Fashion is adapting and becoming more accessible with many couture pieces having a second life on the resale and rent market. The consumer is learning to interact with clothing and fashion in a whole new way. With the emphasis being less on owning and more on having an experience with unique and expressive pieces.

E-Commerce giant Amazon has been preparing for a moment just like this! Snapping up warehouses and expanding its distribution network, Amazon is well poised to survive this holiday period. With its own charter ships including its Dragon Boat, its own shipping containers, the leasing of long haul planes for quicker China to US shipping, Amazon is leapfrogging a lot of the supply chain issues other brands have been facing. With reportedly only 14% of items being out of stock and some prices going up by 25%, controlling every aspect of their logistics has given them an edge.

Amazon’s containers also encourage second-life uses for transport and domestic systems as they do not need to be returned, unlike many others awaiting return. Amazon’s methods have increased ports of entry by 50% and doubled container processing ability. With this kind of influence and market power, it’s not too cynical to say that the “Fulfilled by Amazon” could easily become a selling point, due to their widely known efficiency.

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