29 Mar 2018
The History of eCommerce
When UK entrepreneur Michael Aldrich connected his computer to his phone line and 26-inch tube TV in a Sussex Industrial Estate in 1979 and activated a simple program he called “Teleshopping”, he had no idea how far his idea would go.
Fed up with having to walk to the grocery store with his wife for their weekly shop, Aldrich simply wanted to find a way to make one mundane task easier for himself and his spouse.
Making it possible to purchase the items one needed without having to leave the comfort of one’s own home simply made sense, and emerging digital technologies were presenting an opportunity to accomplish exactly that.
Like so many of the most influential ideas of the modern age, the goal of Michael Aldrich’s teleshopping concept was simply to find a way to make life just a little more convenient through technology.
Although the lack of digital infrastructure and public understanding of computer technology at the time combined to snuff out Aldrich’s idea early on, these impediments didn’t prove to hold electronic commerce, or “eCommerce” back for long.
Nobody knew it at the time, but widespread digital technology adoption was just around the corner, and so was the eCommerce revolution that was to spend the ensuing 4 decades changing the world of retail and commerce forever.
Here’s how it happened…
The 1980s was a strange decade for the digital world. While the public’s awareness of computer technology was growing quickly, and popular culture was beginning to take note, most understood what these exciting developments really meant in only the vaguest of terms.
The internet was still in its conceptual infancy, but the writing was on the wall. Computers were going to change everything, we just didn’t know exactly how yet.
While the B2C (business to consumer) eCommerce marketplace of the 1980s was basically nonexistent, some B2B (business to business) headway had already been made, but only on an extremely rudimentary level.
It is certainly worth noting that in 1984, British grocery superbrand Tesco did bring us the world’s first online shopping basket, its first B2C online shopping system, and the world’s first B2C customer: British pensioner Jane Snowball.
While the amazing potential of the interface between computer/internet technologies and traditional retail was becoming clear to some, the internet, computer technology, and the public at large simply weren’t ready to make the eCommerce leap just yet.
However, something amazing was just around the corner, and it was poised to remove every one of those roadblocks with the flick of a switch.
The internet was about to be unleashed upon the world.
On August 6th 1991, the world wide web went live. For a time, the web remained under the control of the National Science Foundation (NSF) and was the exclusive realm of the world’s biggest nerds and computer scientists.
But the public at large wanted access and commercial interests were beginning to take note.
By 1993, electronic mail, commonly known as “email” presented a strong, practical internet use case that almost anyone could understand. Email use proliferated quickly, and with it, global internet use itself.
Third-party services for processing online credit card payments began to proliferate.
Efforts to implement commercial transactions in the first half of the decade ran the gamut from the clumsy and annoying (pop-up ads and spam emails abounded) to the insightful (Netscape’s “Navigator” browser included an encryption feature that made all internet transactions secure, and in 1995 Jeff Bezos launched Amazon.com).
1995 – 1999 saw eCommerce brands get wiser, delivering more convenient and practical commerce solutions, seemingly by the day. As the world began to awaken to the moneymaking potential that internet commerce presented, and money began to flow into eCommerce’s early brands, companies like PayPal and eBay worked to position themselves as leaders in the fledgeling eCommerce space. Meanwhile, the “dot-com bubble” became a very real concern.
By 1999, global eCommerce revenues skyrocketed. The bursting of the “dot-com bubble”, and widespread hysteria about the “millennium bug” (remember that???) did little to slow the advance of the eCommerce behemoth.
The eCommerce world had come of age, and the writing was on the wall: The new millennium was to be a digital wonderland, and traditional retail and brick-and-mortar stores were on their way out.
As the new millennium began, and the public’s fears about the Y2K bug were assuaged, eCommerce came into its own at long last. Amazon.com continued its relentless march toward eCommerce world domination, retail sites like eBay saw global user numbers explode seemingly overnight, and tales of the ease, convenience, and savings offered by online shopping spread across the globe.
By the time eBay acquired PayPal in 2002, public fears around online payment security were already waning. With the internet’s biggest retail brand now on board, PayPal quickly became the gold standard for digital payment platforms.
As social media sites like Myspace and Facebook began to change the way users interacted with the internet, introducing a new generation of users to a mediated online experience, eCommerce revenues in the US alone topped $57 billion.
But few anticipated what was about to happen next…
In 2007, Apple introduced the first iPhone. Although by no means the first smartphone ever released (the term actually dates back to the year 2000, when Ericsson introduced its R380 smartphone), the release of the iPhone represented a watershed moment in the evolution of the human-internet interface. By October of the following year, 4.7 million iPhones were in circulation worldwide.
As global internet use transitioned away from the desktop computer, where it had languished for the better part of a decade, to the mobile phone, eCommerce brands slowly moved with it.
“Cross-channel” consumer journeys (those involving more than one channel or device) became the norm, and brands strove to make such journeys as seamless as possible. “Social Commerce”, where a brand’s social media presence had a noticeable impact on consumer buying decision, became a key part of any successful eCommerce brand’s digital strategy. The online juggernaut that is Facebook had begun to rear its massive head toward the quickly growing global eCommerce market.
2009 saw the internet’s biggest eCommerce brands begin to separate themselves in an increasingly crowded digital marketplace, as global eCommerce sales topped the $140 billion mark.
As the world’s first “digital generation”- those born and raised in a world where the internet was already a ubiquitous presence – came of age, eCommerce revenues reached new and previously unimaginable heights.
The products which had traditionally dominated eCommerce (collectables, clothing, and big-ticket items like vehicles, jewellery, and home electronics) made way for relative newcomers (smaller ticket items like cosmetics, sporting goods, and even groceries).
Asian eCommerce giants like Alibaba.com and WSMALL began to make their presence felt on the global stage.
Advancements in the supply and delivery of goods abounded in a post-2010 online marketplace, and the quest to deliver the most seamless, convenient online shopping experience possible became the lucrative obsession of the digital times.
Brands promising ever-shrinking delivery windows at increasingly reasonable rates carved outgrowing slices of market share. Chief amongst these: the now eCommerce giant known as Amazon. By 2015, Amazon accounted for more than half of all e-commerce growth, and the brand (and its leader Jeff Bezos) indicated that their aspirations reached even further still.
With the release of voice-activated assistant “Alexa” in 2014, and purchase of consumer packaged goods upstart Whole foods just a few years later, the scale of Amazon’s eCommerce ambitions became clear at last.
As the world’s eCommerce and digital brands scrambled to catch up, many wondered if it was already too late.
Today, mobile commerce is worth an estimated $400 billion worldwide, and the global eCommerce marketplace is more crowded than ever before.
Desperate to claw back market share from the eCommerce behemoths which currently dominate the internet, brands are making use of every tool available to help them gain an edge. From collecting and analyzing massive troves of consumer purchase data to artificial intelligence-optimised marketing language, every option is now open for discussion.
With Amazon, Facebook and Google pushing out competitors at every turn and implementing every technology they can get their hands on, the battle for the world’s eCommerce dollar have become a biblical David and Goliath style fight to the death.
For the world’s eCommerce brands, finding just the right technological slingshot may be the only chance they have.