The History of Online Shopping

Trends 10 minute read 06 July 2020

The sheer number of discarded Amazon boxes at recycling centres these days is no optical illusion.

By 2040, it’s estimated that 95% of all purchases will be made online.

Statisticians can speak so confidently about this, because the trend in eCommerce growth has been clear to see since 2014. According to research, by 2023, eCommerce sales worldwide will approach $7 billion; continuing a rise that has been steady and consistent for the last few years.

But where did it all start? How did we reach the point where ordering everything from a set of cutlery to a family car could be undertaken from the palm of one’s hand?

What is eCommerce?

Electronic commerce (to quote its full title) is the process of selling and buying goods or services over the internet.

It takes place on websites, apps and social media and relies on integrated payment gateways to securely complete transactions between buyers and sellers.

eCommerce is, arguably, sector agnostic and has been successfully implemented in both B2B and B2C industries. This is largely thanks to the relative ease with which an online store can be designed, configured and administered; many businesses can be up and running quickly and without any assistance from coders or designers.

What does eCommerce look like across the globe?

To truly understand how far we’ve come with eCommerce, you need look no further than the global market share by country:

Source

The most lucrative eCommerce markets can be found in fashion, books, travel and beauty, but as anyone who has scoured Amazon will know, you really can buy pretty much anything online these days.

The complete history of online shopping

Did you know that online shopping is 40 years old?

It has of course developed considerably since the earliest incarnations, but eCommerce has been around a lot longer than you think.

Let’s look at where eCommerce started and how it transitioned into the monolith we know and (more often than not) love today.

history of online shopping

1969: CompuServe is founded

Online shopping simply wouldn’t be possible without computing power, and CompuServe is largely regarded as the first company to realise the obvious connection between bytes and commerce.

1979: Michael Aldrich invents online shopping

The English inventor combined a modified TV, transaction-processing computer and telephone line to create the earliest known version of electronic shopping.

1982: Launch of Boston Computer Exchange

When the Boston Computer Exchange hit the market in 1982, it was the world’s first eCommerce business. Its main focus was helping people sell used computers.

1992: First online book marketplace launched

Believe it or not, Amazon wasn’t the first company to discover the market for online book sales. In 1992, Book Stacks Unlimited beat them to it. No, we hadn’t heard of them, either.

1994: Netscape Navigator gains mass popularity

It’s hard to imagine a time without web browsers, but in 1994, Netscape Navigator was the first to become popular on the Windows operating system.

1995: eBay and Amazon both launch

Call it fate or a simple coincidence, but 1995 was the year two start-ups entered the world of eCommerce and plotted a course for world domination.

1998: PayPal enters the market

Now owned by eBay, PayPal first made its appearance at the end of the twentieth century. Back then it was nothing more than a money transfer platform.

1999: Alibaba launches

Still widely used today, Alibaba launched in 1999 backed by $25 million in funding and a desire to be the go-to online marketplace.

2000: Google introduces AdWords

Google makes the majority of its colossal earnings from advertising revenue, and it comes from what is now known simply as ‘Ads’. In the year 2000, it pretty much invented pay-per-click (PPC) advertising.

2005: Amazon Prime launches

It’s hard to believe Amazon Prime is 15 years old. When it launched in 2005, it was nothing more than a membership system that provided free two-day shipping. Now, it includes services such as TV, music, book rental and same day delivery.

2005: The rise of community with Etsy

When Etsy launched in 2005, it gave smaller sellers and crafters a platform from which to sell their goods. This was the start of community eCommerce.

2009: Square enters the market

Payment processing has always sat at the heart of eCommerce, and Square’s launch in 2009 made it easier for retailers to accept card payments both on- and offline (a first at the time).

2011: Google Wallet arrives

Google was the first to offer a peer-to-peer payment service that could be used from smartphones. It worked by linking a ‘digital wallet’ to a debit card or bank account and is known today as Google Pay.

2011: Facebook launches sponsored stories

This was the earliest form of social media advertising and enabled businesses to advertise to targeted audiences via sponsored posts. It was the first glimpse at how powerful Facebook’s data haul could be for retailers.

2014: Hello, Apple Pay

With online shoppers increasingly using their smartphones, Apple picked 2014 as the time to jump on the mobile payment platform bandwagon. Now, it can be used on virtually every Apple device, including the Apple Watch.

2016: Facebook Chatbots emerge

In 2016, an early version of Facebook’s chatbot technology made its way into the Marriott and Starwood hotel chain brands to aid the guest enquiry and rewards accounts processes.

2017: Instagram partners with BigCommerce

This partnership enabled Instagram business accounts to advertise their products with direct links to buy, enabling the user to click immediately into the purchase process.

2018: Multi-channel selling gains prominence

A 2018 Omnichannel Buying Report noted that 87% of US consumers still shop offline, revealing the importance of multi-channel selling and ‘omni-channel’ shoppers.

2020: Facebook launches Facebook Shops

In May 2020, Facebook founder Mark Zuckerberg revealed Facebook Shops, a new eCommerce platform that enables businesses to sell products directly on Facebook and Instagram, thus bypassing any third parties.

Where does it go next?

If we fast-forward to June 2020, rocketing demand for online shopping (in part due to the COVID-19 outbreak) results in Amazon boss Jeff Bezos adding another $31 billion to his fortune.

While this might be a momentary spike, the growth trend for online shopping shows no signs of slowing. We’re now entering an era of hyper-personalisation, artificial intelligence and increasingly human-like chatbots.

From here, we should expect eCommerce to get continually smarter, safer and capable of disrupting markets that are yet to realise its full potential

Read this next: What is footfall (and why does it matter in retail and hospitality)?

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