Electronic commerce, also known as ecommerce, is a normal part of life for many people and companies. The availability of goods on the internet provides customers with a vast array of options from which to choose.
This in turn has led to a significant increase in the percentage of retail sales that occur online in recent years.
Ecommerce’s importance is undeniable, as the convenience of online shopping is hard to beat. However, it wasn’t always as easy or accessible as it is now.
The concept of ecommerce has been evolving and improving since the very beginning of the internet. A modern-day internet retail business is able to offer a lot more products and services than one just 10 years earlier.
Whether you’re an online buyer or seller, it’s a good idea to have a general understanding of the history of ecommerce and how it’s changed over the years.
What is ecommerce?
Ecommerce is the buying or selling of products online. This kind of commerce involves several steps, including browsing, encrypted payments, shipping, and logistics.
Many major brick-and-mortar retailers also have ecommerce platforms for customers to shop online, but some ecommerce stores are online only.
There are six main types of ecommerce, and each involves a different combination of buyers and sellers. Business models for internet commerce include business to consumer, business to business, consumer to consumer, consumer to business, business to administration, and consumer to administration.
Ecommerce timeline
The history of electronic commerce goes back over 50 years ago and features a variety of important events that have helped shape what it is today. Over this period of time, there have been many developments that have changed the way that customers and businesses interact on the web.
Here’s a brief timeline of how internet sales have advanced since they first began!
1960s
Tech experts planted the seeds for ecommerce in the 1960s with the creation of Electronic Data Interchange (EDI). This allowed for digital data transfers for orders and invoices. It was the first instance of businesses conducting transactions electronically.
Then, in 1969, Dr. John R. Goltz and Jeffrey Wilkins created CompuServe, which was one of the first commercial internet services. Over the next two decades, CompuServe would become the driving force behind the early forms of email on the web. They'd also play a major role in the development of ecommerce and its many services.
1970s
In 1979, Michael Aldrich invented electronic shopping. His system used a modified TV connected to a computer with a telephone line. With this setup, buyers and sellers could conduct transactions with secure data transmission.
Aldrich got the idea for this technology while he and his wife discussed the thought of connecting their TV to their supermarket so they could have their groceries delivered. Although it would still be a long time before ecommerce took off in popularity, Aldrich's contribution was the foundation for online shopping.
1980s
The 1980s brought several important moments in the history of ecommerce. Boston Computer Exchange, the first ever ecommerce company, launched in 1982. This platform was established by Alexander Randall and Cameron Hall.
It was primarily used for people to buy, sell, and trade computer parts. Boston Computer Exchange had daily activity from its launch until it closed in the 1990s.
Also in 1982, French developers launched the Minitel, one of the main precursors to today's internet. The Minitel used a Videotex terminal that users could access via their telephone lines. By the late 1990s, the service had around 25 million users. However, the service slowly declined, as it couldn't compete with the internet that would be introduced in 1994.
1990s
In 1992, Charles M. Stack created Book Stacks Unlimited, the first online bookstore. When it was first established, Book Stacks Unlimited used a dial-up bulletin board system. In 1994, they transitioned over to the internet and became known as the site Books.com.
In 1994, Netscape Navigator was launched by Marc Andreessen and Jim Clark. This was an early web browsing tool that preceded Google and other massive search engines.
Throughout the 1990s, Netscape Navigator was the most popular web browser. People used it for a variety of purposes, but it was a great tool for browsing online marketplaces for all kinds of goods.
Amazon and eBay both launched in 1995. Although Amazon was originally intended to be an online bookstore, it has become the largest online retail store for a wide range of products. eBay was established as an online auction site and remains one of the biggest ecommerce platforms to this day.
In 1998, the electronic payment service PayPal was created under the name Confinity. The company was renamed to PayPal in 2001 after merging with X.com, Elon Musk's online banking company. Today, there are more than 100 million active PayPal accounts, and the platform handles 24 different currencies.
Another massive marketplace that began in the 1990s was Alibaba. The retail site launched in 1999, was a profitable business by the early 200s, and is still used by many today for web commerce.
2000s
Advancements throughout the period of time between the 2000s and 2010s led to ecommerce becoming a staple in many people's shopping habits. In 2000, Google launched Google AdWords, a marketing tool that allowed ecommerce companies to advertise to Google searchers.
Amazon introduced Amazon Prime in 2005. This service charges an annual fee for free two-day shipping and other services. It quickly caught on and became an incredibly successful service for Amazon.
Prime encouraged customer loyalty and repeat purchases so that customers got their money’s worth from the annual fee, boosting sales significantly. With the launch of Prime, Amazon set the precedent for fast and free shipping services that many retail customers prioritize today.
Another big launch in 2005 was Etsy, a marketplace on the web for artists, crafters, and small businesses to sell their products. Etsy is still one of the most popular sales platforms for individual and small sellers for commerce on the web.
2010s
In the early 2010s, social media began to play a critical role in the growth of digital commerce and ecommerce sales and services. Facebook started its sponsored stories in 2011 as one of its early advertising systems. This helped ecommerce stores reach their target audiences through marketing using Facebook newsfeed ads.
New payment methods have also been introduced to make online purchases even easier. In 2011, Google created Google Wallet, a peer-to-peer payment system that lets users send or receive money from their phone or computer.
Similar to PayPal, Google Wallet users can link their account to their bank. Google changed the name to “Google Pay” when it merged the service with Android Pay in 2018.
The payment processor Stripe launched on the web in 2011 as well. This software is now used by millions of ecommerce companies worldwide to quickly and easily process payments for customers involved in online commerce.
In 2014, Apple created Apple Pay, a digital wallet that lets Apple users pay directly from their devices. Like Google Pay, this further simplifies online payments because it eliminates the need for shoppers to enter their card information for every purchase.
In 2017, Instagram Shopping was introduced as a way for users to view product information directly on social media posts. Users can add product tags to their photos that include links to the website where viewers can purchase the featured product.
Today, ecommerce is ingrained in almost every part of the internet. There are millions of online sellers offering every product imaginable, and ads for ecommerce stores are all over Google, social media, and other websites.
Payment software has made it easier than ever to make purchases, so many consumers use ecommerce as their primary shopping method.
What does the future hold for ecommerce?
It’s highly likely that ecommerce and its services will continue to grow over time. Businesses will find new, innovative ways to offer their products online. Furthermore, developers will create software that makes online shopping and purchasing even simpler for desktop and mobile devices alike.
As our technology gets more advanced, we can expect to see more personalization in ecommerce services to boost sales. To increase conversions, web sellers need to offer individualized products and interactions to potential customers.
Ecommerce stores already use personalization by using the individual's browsing behavior, demographic information, and other data to determine which products or content should be shown. They’ll work toward perfecting this marketing system so that they can offer as engaging of a browsing experience as possible to every customer.
Businesses will likely increase their personalization with the help of artificial intelligence (AI). Every year, there are significant advancements in the field of AI. Ecommerce platforms can use the technology to better understand their customers and deliver specific, unique recommendations and services.
In addition, AI can improve customer service on the web. With every new development, AI gets better at understanding natural language and interacting with people. More ecommerce stores will likely soon offer high-quality customer support 24/7 through the help of an AI chatbot.
The future of ecommerce involves digital currency as well. Payment methods like Apple Pay, Google Pay, and PayPal are already popular, but online-only payments like cryptocurrencies have not yet taken off.
In the next few years, though, digital currency may become a mainstream form of payment for online commerce transactions. When it’s set up properly, it can be safer and more secure than transactions that involve customers’ bank accounts.
With technological advances, it’ll be more important than ever that websites include all the necessary functions for electronic commerce so that merchants can run their stores as efficiently as possible!
Final thoughts
Ecommerce has come a long way since its inception in the 1960s, and it still has a long way to go. The internet has changed so many aspects of our everyday lives, including the way we shop and the services that are available to us.
With the rate at which technology is advancing, we should expect to see ecommerce grow exponentially in the coming years. From individual sellers to worldwide chains, countless businesses have benefited from bringing their products online.
If you’re considering launching your own business on the internet, you couldn’t have picked a better time to begin!
