Blog Post

The History of eCommerce

Starting An eCommerce Business

eCommerce has come a long way since its inception - from the B2B community starting to share documents over the internet in the 1960s, to the $279 billion online retail industry we have today. We are constantly looking forward to where digital will take us next, so we thought we’d stop and take a look at how far eCommerce has already come.

1960s - 1990s: The Early Days of eCommerce

eCommerce started in the 1960s, when technological developments meant that data could be exchanged electronically for the first time, but fast forward to the 1990s, and this was the decade that online retailing really began to take off.

The ‘90s saw the first secure online purchases - one of which was a large pizza from Pizza Hut, and another was a Sting CD, sold by US retailer, NetMarket on 11 August 1994.

The eCommerce industry quickly grew from this point onward. Simply look forward three years to the end of 1997 and Dell became the first company to announce a single day sales record of $1 million online.

Early 2000s: Introducing Broadband

In 2003, more than 20% of Americans had broadband in their homes, meaning that more people were beginning to have permanent access to the internet - and more access to online shopping. An article from E-Commerce Times outlined the effects of broadband on eCommerce, and in 2003, online sales increased by 26%, and Amazon alone reported a 28% sales increase year-on-year.

However, the introduction of broadband to people’s homes didn’t only mean that more people were buying online, it also meant that people were starting to conduct more research before placing an order. With easy access to the internet increasing, the average time spent researching products and searching for more competitive prices also increased. 

Key Brands in eCommerce

eCommerce giants, Amazon and eBay have been leaders in the industry since its infancy, and were amongst the first well known eCommerce brands.

Amazon was a pioneer in affiliate marketing, meaning that they allow other websites to earn sales commissions for referring Amazon products to their customers. Amazon now generates around 40% of their total sales revenue from affiliates and sellers who list and sell their products through Amazon’s website. 

Amazon

The growth of Paypal (assisted by eBay’s acquisition of Paypal and their later partnership with Mastercard) also transformed the way that consumers could make payments and shop online.

Paypal streamlined the shopping experience for its users. Instead of inputting customer and card details every time a consumer wants to make a purchase, all they need to do is checkout using Paypal and log in with their account - and with the ease of using Paypal on a mobile device, the platform has lent a hand to the rise in mobile commerce.

2010s: The Rise of Mobile Commerce

With the increase in smartphone owners over the years, mobile devices have caused a shift in the way eCommerce now operates.

Not only have online retailers had to consider the user experience for their mobile shoppers, in April 2015, the rise in mobile users caused Google to release a search algorithm update, referred to as ‘Mobilegeddon’. This update was designed to give a boost in visibility to responsive, mobile-friendly sites and penalise sites which did not cater to their mobile users.

However, as well as mobile users affecting search results and site visibility, the way users are using mobile is also causing a shift in shopper behaviour. Whilst online product research may have begun in the early 2000s, smartphones have taken this to a higher level - GE Capital Retail Bank found in a recent study that 81% of shoppers will now research a product before they buy it.

With Google always at their fingertips, shoppers will now turn to the internet to read reviews or look for offers online, whether they are browsing websites at home, on the bus, or right before they join the queue to buy in-store. 

Instagram

2010s: The Effects of Social Media

Social media has also changed how consumers shop with their chosen eCommerce retailers. Social platforms have made brands much more accessible for their customers (consumers feel equal to brands on social, not below them), and has changed the way they communicate with businesses.

Consumers are likely to interact with brands on social before they decide to shop with them, and a brand’s social presence can be highly influential in how shoppers perceive them. Consumers have higher expectations for brands on social, and on digital generally. If a retailer doesn’t meet these expectations, the internet, and social in particular, makes it very easy for consumers to move on to a different brand.

However, social has opened up brand new opportunities for brands to sell their products online. Facebook has 1.59 billion active users every month, and their boosting feature alongside the Facebook Buy Button means that businesses are now able to reach and sell their products to some of these users.

Instead of requiring users to find their way back to your online store to place an order, users can click the ‘buy’ button on your posts and place an order there and then without leaving their newsfeed. This allows businesses to take advantage of impulse buyers and opens up valuable opportunities to gain new customers. 

What Will Be the Future of eCommerce?

When we look at how drastically eCommerce has changed over the past 20, or even 10 years, it’s difficult not to be excited about the future of retail technology and how the experience for both consumers and retailers will continue to change.

If you’re equally excited by any of the recent advances in eCommerce or you want to learn about how you can make the most out of them for your business, tweet us @Statement or get in touch.