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Company-sponsored reviews and ratings are a new trend as most businesses pivot to e-commerce platforms to increase sales. This form of advertising has become popular following the covid-19 pandemic, which saw the world go into lockdown. One niche that is aggressively adopting company-sponsored reviews is the hospitality industry.

Today, more people than ever before order their food online as the paradigm shifts to digital ecosystems. Merchants in the hospitality industry have since moved to leverage company-sponsored reviews to cut edge in the digital economy. Most hotels, eateries, restaurants and bars globally are now listing their services on third-party platforms that facilitate company-sponsored reviews.

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The e-commerce intermediaries enable merchants to share or advertise their services while creating an environment where consumers can also give feedback. This is usually in the form of reviews such as category ratings or feedback comments. In doing so, consumers have an easier time choosing a service provider per the ratings or comments under a specific outlet.

While company-sponsored reviews have become popular, the current infrastructure favours the e-commerce intermediaries, leaving merchants at the mercy of a few pennies. Some platforms charge commission fees as high as 30%, not to mention their centralized architecture, which means that merchants have to agree to another set of rules.

The Dark Side of Sponsored Review Platforms

The current structure of company-sponsored reviews exposes merchants to many business shortcomings, some of which end up wiping a significant part of their revenues. In the next section of the article, we will feature some of the challenges in the existing company-sponsored review models.

1. High Commission Fees

For starters, e-commerce intermediaries charge exorbitant fees to list service providers. This limits access to small businesses whose operating revenue is not enough to leverage company-sponsored review services. Consequently, only high-end service providers can list their product suite through e-commerce intermediaries.

2. Unfair Compensation on User Data

Another shortcoming is unfair incentive models for using merchants' and consumers' data. E-commerce intermediaries make a killing from commission fees as well as selling data to other service providers. Meanwhile, the merchants and consumers who use these platforms are not fairly compensated, given that data is the new gold.

3. Centralization

E-commerce intermediaries have built their infrastructure based on a centralized architecture. This gives them more control within the platform as they are in charge of internal processes such as customer experience, payments and user data. Merchants have to entirely rely on e-commerce intermediaries - making it hard to scale up or leverage other resources such as user data.

4. Indirect Relationships

As is the case with most forms of marketing, company-sponsored reviews are meant to create a relationship between merchants and prospective consumers. However, the existing e-commerce intermediaries only provide an indirect relationship between the two. This makes it hard for merchants to improve their services or build a loyal client base.

Is Blockchain the Solution?

The advent of blockchain technology has brought about many solutions, with the most popular one being in the crypto niche. This technology supports cryptocurrencies such as Bitcoin and Ethereum, which are touted as some of the pioneer decentralized projects. Blockchain is now being used in other industries, including gaming, logistics and the e-commerce intermediary sector.

In the latter industry, blockchain is changing how merchants interact with consumers through peer-to-peer ecosystems. Bistroo is one of the blockchain projects in this industry that features a community-powered e-commerce intermediary platform. This project has pioneered a decentralized food-delivery ecosystem that acts as 'facilitator, never dictator'.

The Bistroo community-powered food delivery platform leverages blockchain technology to facilitate direct and transparent communication between merchants and consumers. Based in the Netherlands, this project has achieved remarkable growth surpassing $1 million in orders as of Q4 2020. Bistroo's fundamental model allows merchants such as restaurants, mealbox stores and specialty goods stores to onboard their services within a day.

Unlike traditional e-commerce intermediary platforms, Bistroo gives complete control to the merchants, allowing them to customize their listed services, leverage on-chain analytics and select their preferred payment methods. The platform features a native blockchain toked dubbed 'BIST', which acts as an incentive for contributing to the network; consumers are also rewarded with a 2% cashback for payments made in BIST.

Notably, several other projects within the blockchain ecosystem have pivoted to e-commerce solutions. Bistroo is one of the examples that are making a considerable mark, with the latest milestone being €8.2 million funding to advance its decentralized company review and food delivery solutions.

Wrap Up

As the world adopts digital ecosystems, many brick-and-mortar industries will eventually integrate technological solutions to access a broader market. This can be seen in vibrant sectors such as hospitality which had to restructure its approach to survive the covid-19 pandemic. Food delivery took the centre stage of operations, pushing more people to online review platforms to perform due diligence based on reviews.

Though effective, centralized company-sponsored reviews are yet to empower merchants fully. On the brighter side, blockchain technology is set to change the landscape through decentralized review platforms. This developing area of innovation has proven to be fundamental by introducing cost-friendly ecosystems and enabling direct communication between merchants and consumers. Going by these developments, the future of e-commerce intermediaries will likely be decentralized or community-powered!

This article is provided to you for informational purposes only and should not be regarded as an offer or solicitation of an offer to buy or sell any investments or related services that may be referenced here.

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