Explained: The History of eCommerce
TLDR: Your online stores need to be flexible, adaptable, and scalable enough to meet these changes and future-proof your business for long-term success. To know where retail is moving, it's crucial to know how far we have come.
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eCommerce has evolved in many ways since its start, and it’s changing the way we live, shop and do business. Let’s dive into the history and the future of eCommerce.
It all began 40 years ago, when early technologies like Electronic Data Interchange (EDI) and teleshopping were introduced in the 1970s, paving the way for the modern-day eCommerce business as we know it today.
The history of eCommerce and the Internet are inextricably linked. When the Internet was first made available to the general public in 1991, online purchasing became conceivable. Thousands of firms have subsequently followed in the footsteps of Amazon, which was one of the first eCommerce sites in the US to start selling things online.
Since the advent of online buying, eCommerce’s ease, security, and delightful user experience have all grown dramatically.
Online shopping
Online shopping was founded in 1979 by Michael Aldrich, an entrepreneur by profession in the UK. He connected a modified domestic TV to a real-time multi-user transaction processing computer via a telephone line, which was marketed in 1980 and offered as business-to-business systems sold in the UK, Ireland, and Spain.
One of the earliest consumer buying experiences was Books Stacks Unlimited, an online bookshop founded by Charles M. Stack in 1992. Three years before Amazon, Stack’s store started as a dial-up bulletin board. Books Stacks Unlimited was acquired by Barnes & Noble in 1994 and moved to the Internet as Books.com.
First online transaction
On August 12, 1994, issues of the New York Times published “Internet is open, the team of young cyberspace entrepreneurs celebrated what was the first retail transaction on the Internet using a readily available version of powerful data encryption software designed to guarantee privacy”.
eCommerce Timeline
Invention and the early days (1960 - 1982)
The development of EDI in the 1960s paved the way for eCommerce. EDI replaced traditional mailing and faxing documents by allowing a digital transfer of data from one computer to another.
Trading partners may exchange orders, invoices, and other business documents using a data format that complies with ANSI ASC X12, the most widely used standard for inter-industry electronic exchange in North America. After an order is sent, it is inspected by a value-added network (VAN) before being forwarded to the recipient’s order processing system. EDI allowed data to be sent without the need for human involvement.
Michael Aldrich’s innovation involves wiring a television to their grocery and having them deliver the food, which was inspired by a talk with his wife about their monthly supermarket shopping journey. Aldrich developed the term “teleshopping” to describe his idea, which was a forerunner to today’s internet shopping.
Early eCommerce Platforms (1982 - 1990)
The development of EDI in the 1960s paved the way for eCommerce. EDI replaced traditional mailing and faxing documents by allowing a digital transfer of data from one computer to another.
Trading partners may exchange orders, invoices, and other business documents using a data format that complies with ANSI ASC X12, the most widely used standard for inter-industry electronic exchange in North America. After an order is sent, it is inspected by a value-added network (VAN) before being forwarded to the recipient’s order processing system. EDI allowed data to be sent without the need for human involvement.
Michael Aldrich’s innovation involves wiring a television to their grocery and having them deliver the food, which was inspired by a talk with his wife about their monthly supermarket shopping journey. Aldrich developed the term “teleshopping” to describe his idea, which was a forerunner to today’s internet shopping.
The World Wide Web arrives (the early 90s)
Tim Berners-Lee and Robert Cailliau submitted a proposal for a World Wide Web Hypertext Project in 1990. The Dynatex SGML reader, which CERN licences, served as the motivation for this effort.
In the same year, Berners-Lee created the first web server and wrote the first web browser. Shortly after that, he debuted the web on August 6, 1991, as a publicly available service on the Internet. When he decided he would take on the task of marrying hypertext to the Internet, the process led him to develop URL, HTML, and HTTP.
The National Science Foundation eased its limitations on commercial Internet usage in 1991, resulting in a massive increase in online purchasing. The NSF began collecting a fee for domain name registration in September 1995. By 1998, the number of domain names had risen to two million. The NSF’s involvement on the Internet had come to an end by this point, and much of the supervision had transferred to the private sector.
Many people were concerned about the safety of internet buying from the start. However, Netscape developed a security protocol – Secure Socket Layers (SSL) — and an encryption certificate that made data transmission over the Internet safe. Web browsers could tell if a site had an authenticated SSL certificate and, depending on that, whether or not it could trust it.
SSL encryption protocol is a vital part of web security, and version 3.0 has become the standard for most web servers today.
Major marketplaces emerge: Amazon, eBay, and eCommerce platforms
The commercial usage of the Internet advanced dramatically in the mid-to-late 1990s. Amazon, which began as an online bookshop in 1995, and has grown to become the world’s largest online retailer, was one of the earliest eCommerce sites. The number of titles available in traditional brick-and-mortar bookshops was around 200,000. Amazon provided significantly more things to the buyer since it was an online-only retailer with no physical limits.
Amazon’s product selection includes music, video downloads, electronics, fashion, furniture, food, and toys. The retail behemoth was one of the first online retailers to provide product reviews and a rating scale. Product reviews are now widely regarded as one of the most powerful tools for increasing sales and establishing consumer confidence.
After Amazon, the success story of eBay – an online auction site that debuted in 1995, and Etsy, which launched in 2005 and, by 2019, saw gross merchandise sales totalling $4.97 billion globally.
For a set annual subscription, Amazon established Amazon Prime in 2005, which offers free two-day shipping inside the contiguous United States on all qualifying orders. The membership soon gained traction, placing pressure on other businesses to provide swift and low-cost delivery choices.
Along the lines of eBay, the Middle East-based auction website was introduced – Souq.com, which later on got diversified into automobile and real estate classified verticals. The website took off almost at once, and later on, it expanded to the Kingdom of Saudi Arabia. Since its launch, Souq has become the most prominent eCommerce provider in the region and one of the fastest-growing businesses. Which later on got acquired by Amazon in 2017.
The rise of mobile commerce
Mobile commerce was introduced in 1997 when two mobile device-enabled Coca-Cola vending machines were installed in Finland. Mobile commerce gained speed over the next two decades as more users began conducting mobile transactions and websites evolved to provide better user experiences. By 2025, mCommerce sales is expected to make up over 10 per cent of all US retail sales, which would be a growth of 7 per cent points since 2018.
Consumers and business buyers turn to mobile devices for product research and coupons, with engagement on social media becoming increasingly popular. Business buyers expect more consumer-focused features like personalisation and responsive design and demand the ability to quickly locate product details, secure pricing, and receive online help.
The future of eCommerce
Amazon has set the bar for customer service and innovation in eCommerce, but there are many things that independent merchants can accomplish that Amazon can’t, such as creating a memorable brand experience and earning loyal, engaged consumers for life.
So, what will buyers desire next? That is the question that both online shops are pondering. Then there are the millennials, who have changed the way people shop online. A website that lags or takes a long time to load will lose millennial visitors faster than you can say “avocado toast.” Before making a purchase, millennials will often search around and read reviews as part of their self-directed buying process.
Sellers must watch comments and listen to what customers have to say about their products and customer service to succeed in eCommerce. A site with an out-of-date design will signal to millennial shoppers out-of-date procedures, products, and pricing, damaging sales and holding back your firm.
So what’s next for eCommerce? The only certain thing is that there will continue to be more changes on the horizon. Your online stores need to be flexible, adaptable, and scalable enough to meet these changes and future-proof your business for long-term success.
