Major launches, milestones and other major events are included.

• A Convenience Taken for Granted
• Exciting and Challenging Milestones
• An Accelerated Disruption
• What Does the Future Hold?

Intro: A Convenience Taken For Granted

Sometimes the past can give us an insight into future challenges. But it can also outline our current opportunities more clearly.

The retail industry has gone through many changes. It has evolved into a more accessible, personalized, and limitless format.

E-commerce (electronic commerce) is the activity of buying and selling products or services online. By doing so, often entirely bypassing the need for a physical retail space.

While nowadays, the idea of not having the flexibility to shop online seems inconceivable, it wasn’t that long ago that this option didn’t exist. The ability to sit back after a long hard day at work and do digital window shopping is a privilege. One that we have rapidly grown used to, and take for granted. There is no denying it: there is a certain pleasure to saving products into a wish list and checking out a cart without so much as taking out your checkbook.

How many times have you heard yourself complain about slow delivery or a not-that-fast loading photo of those must-have sneakers?

Although it may feel like it’s been around forever, the history of e-commerce began around 40 years ago. And it has continued to evolve since then. New technologies have increasingly been incorporated into the service and also spearheaded innovation in some markets.

It could be said that the journey towards e-commerce began in the ’70s with teleshopping. Those famous TV programs featuring products for sale, that you could order over the phone and have delivered. Later, e-shopping effectively came to life with the democratization of the internet in 1991.

So, let’s explore the fascinating history and evolution of e-commerce in this 5-minute read.

Exciting and Challenging Milestones

Circa 1979 – United Kingdom. Michael Aldrich invented online shopping by connecting a modified TV with a transaction the processing computer through a phone line. This created the very first distance shopping experience, dubbed:  teleshopping.

In the early ’80s, business-to-business systems were then offered in Europe. The anecdote goes that the very first transaction was effected by students selling drugs via the Arpanet account at the artificial intelligence lab in 1972. However, the first online shopping transaction occurred much later. Using a powerful data encryption software to guarantee privacy, the first Sting CD – and first item ever in an online retail space – was sold. Many more milestones were subsequently crossed since the invention of the internet.

1960-1982

The Electronic Data Interchange (EDI) was the first development in the digital transfer of data from one computer to another. This technology replaced traditional mailing and faxing of documents and allowed business collaborators to exchange transfer orders, invoices, and much more. The data sent would be checked by a VAN (Value Added Network) and then sent to the recipient.

1982-1990

It very quickly became obvious that – at least – business-to-business online commerce was going to flourish. As for the wider audience, business-to-consumer transactions would have to wait until personal computers became more accessible to the consumer at large and the World Wide Web fully democratized.

The first online service launched in France in 1982. The Minitel used a Videotex terminal machine (it was one of the earliest implementations of an end-user information system) accessed via phone line. In less than 18 years, more than 9 million Minitel terminals were installed and connected around 25 million users. However, in 1991 this started to slowly die out as the Internet took over. Eventually, in 2011 France Telecom shut down entirely the Minitel service.

Why are these small advances important in the rise of e-commerce?

Well, that’s because every step in the right direction – even if it was a failed step – showed the promise ahead and the opportunities that lay with the end-objective. Interest and buzz often accompanied every technical accomplishment, no matter how small. These were times where technological innovations essentially played the role of an emotional elevator – lots of promise and hope were often met with a slow and boring demise.

Early 1990’s

In 1990, two friends, inspired by the Dynatext (an electronic publishing system) SGML reader (licensed by CERN – European Organization for Nuclear Research) proposed to build a Hypertext project. It was coined, the World Wide Web. Using a NETcomputer, Berner Lee created the very first web server and web browser.

On August 6, 1991, the Web made its debut.

Lee is also the man responsible for the creation of URL, HTML, and HTTP. Which, together, can be considered as the basis for all things available – and mainly, searchable – on the web.

1991 was a very important year in the history of the internet, and therefore the evolution of online shopping.

It was then, that the NSF (National Science Foundation) lifted the restrictions on the commercial use of the Net. Thus, marking the democratization of the technology, and opening the large doorway to e-commerce, online advertising, and search engines. Basically, every tool & channel we now take for granted in our marketing strategies.

In 1995, the NSF placed a fee on domain name registration. As little more than 120,000 domains were in circulation at the time, and in the short span of 3 years, that figure climbed to more than 2 million. Once this happened, the role of the NSF slowly faded, and the oversight of online activities shifted to the private sphere and commercial sectors.

For some, it was quite clear even then, that the Future of Consumerism had finally arrived.

Similar to the reaction most have in the face of innovation, many hesitated and had concerns about online shopping. However, in 1994, the development of a security protocol encryption certificate (Secure Socket Layers, knows as SSL) by Netscape offered the safety net required. Ensuring that data transmissions over the internet were dependable became crucial for the internet to thrive. Nowadays, SSL encryption protocol is a vital part of web security and is considered the standard for most web servers.

Mid 90’s – Present day

New Marketplaces

Commerce and trade require a marketplace to exist – a modern-day Agora (the ancient Greece market and space for social gathering). Any advancement in commercial uses of the internet brings about an opportunity for existing businesses to adapt and digitize.

Being an online-only store, without physical limitations, has many advantages, and one of them is the ability to offer (theoretically) an unlimited amount of products. If you look at Amazon, which started as a bookstore, now also offers music, videos, electronics, apparel, furniture, toys, and even food.

That’s just one success story, others include eBay, Etsy, and many more.

The online marketplace requires some additional services in comparison to physical stores. While traditional shopping implies that the consumer picks up their shopping, online stores have to offer shipment options.

Therefore, we saw the rise of fast, reliable shipping partners, offering lower costs on international deliveries. Once again, expanding the reach of e-commerce and truly globalizing this now border-less market.

Online Payments Evolve

As e-commerce grew, it was only natural that online payment methods would also evolve. In 1998, online transactions giant, PayPal began operating in 202 markets. PayPal is an acquired bank to process payments online and for specific commercial uses. Users can send, receive, and hold funds in 24 currencies. The need for secure transactions led to the creation of the PCI (Payment Card Industry Security Standards Council) to ensure businesses complied with all security requirements. This organization was created to develop, enhance, and implement security standards for account data protection.

The ability to feel secure while shopping online was a key turning point to bring forth wider participation and more growth.

Mobile Expands

The 2000s were dubbed the years of the mobile. While everyone got on board, the expectations for e-commerce to follow through were high. Every year held the promise for optimizing internet search results, websites, and online shopping to fit the on-the-move life and work flexibility that mobile could offer.

In 2001, Amazon launched the first version of its mobile-friendly e-commerce site. Transactions over mobile kept gaining speed over the next two decades. Indeed, there is something so simple, accessible, and rewarding about being able to purchase something from a device held in the palm of your hand.

Mobile sales increased steadily by almost a third every year, to now reach 50% of the total online sales. It is advantageous for consumers and B2B buyers to use mobile devices for their research, inquiries, and purchases. Both expect to see a responsive website design when they switch from desktop to tablet to phone.

There is, increasingly, underlying anticipation that the same features and services available on one platform, will be available on any other. And this is just good customer service.

An Accelerated Disruption

You have surely heard of the term ‘disruption’ being flung at just about anything related to digitalisation and technological innovation. But what does it truly entail?

A quick Google search will give you the following result:

“In business theory, disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products, and alliances.”

With this definition in mind, we can assert that many times the new ways of buying, selling, ordering, and planning have disrupted traditional long and well-established industries. Notable start-up examples include Airbnb, Uber, Amazon, Expedia, and Food delivery apps. All of these and many more have created ripple waves by using the latest online tech for transactions and affected the status quo held by the market leaders.

The natural order of things would have offered enough time for the industries affected too – perhaps – adapt, find a proper business continuity strategy, or die out.

However, there has been another, yet more disruptive, radical change recently. We are referring to the COVID-19 pandemic. It has taken all the slow efforts of merchants and businesses trying to get on-board the online train and placed them into a warp-speed accelerator. This coronavirus conundrum accelerated digitization and gave an advantage to those who were able to cope with the new market demand.

What is the future holding?

Since its inception, the Internet and all the services it made available have continued to evolve and affect consumer trends. Online shopping has become a lifestyle and an intrinsic part of our busy schedules. In 2019, global online retail sales reached an astounding $3.53 trillion. And the trend is expected to keep growing.

Of course, the question of whether or not merchants that operate from a physical space still have an audience is crucial. Data seems to point in the direction that independent merchants will always have an added value that online transactions cannot offer. However, online shopping giants such as Amazon, are leading the way in innovating customer experiences.

The future of e-commerce depends on many factors that are yet to be unveiled.

An extremely vivid and recent experience of evolution occurred with the unexpected disruptions caused by the COVID-19 pandemic. This global and far-reaching crisis greatly accelerated the role of remote shopping and expanded access to online services – in particular when it comes to retail and food & beverage.

High expectations ahead.

Going forward, shoppers will continue to have high expectations from the online world and how it can facilitate their daily lives. There is an advantage to being online over managing a brick-and-mortar store. The first one is a more solid base for business continuity in the face of challenges. The second advantage being a lower fixed cost and finally, a lot of flexibility in visualizing the products offered – and many channels to market them.

In the digital era, the new generation has the lead in setting the rules of what works for them – as consumers . And they also set the standard for what isn’t acceptable from a website (which will have you lose credibility and customers in the blink of an eye). This consumer base is one to check out reviews and comments before making a purchase. Therefore, be sure to listen to what is being said about your brand online.

It is expected that e-commerce will grow to shape around 25% of total retail sales by 2025.

However, the ever-changing nature of the online world and advances in technology means nothing that exists today is guaranteed a successful future – in terms of retail methods. So, the only thing we can say for sure, is that more change is ahead. Prepare your online store, and your business concept, to be resilient and flexible enough to adapt.