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So, Where Did eCommerce Come From?

  • Written By Livie
  • Posted March 2, 2018
  • 7 minutes Read Time

eCommerce has come a very long way since its inception. Starting originally from the B2B community starting to share documents over the internet in the 1960’s, to the $279 billion online retail industry we have today. Anyone who works in the eCommerce industry or generally interested in it will be constantly looking forward to where digital commerce will take us next, so instead, we wanted to take it back to where it all began and talk about how we got to where we are today.

1960 – 1990: The Birth Of eCommerce

eCommerce as we know it, all started back in the 1960s when technological developments got a point where it meant that data was able to be exchanged electronically for the very first time. However, fast forward to the 1990s, as this was the decade that online retailing really began to take off.

eCommerce History

Stings Ten Summoner’s Tales was the first ever eCommerce transaction.

In the 90’s we saw the very first secure online purchases – one of which was a large pizza from Pizza Hut… Great choice! Pizza hut often gets the credit for the first ever eCommerce transaction due to them starting to sell pizzas online in late August 1994. When in fact, the actual credit goes to Dan Kohn, who ran a website called NetMarket.

On August 11, 1994, Kohn sold a CD of Stings Ten Summoner’s Tales album to a friend who was in another part of the country. His friend used his credit card to spend $12.48 plus shipping costs, in a transaction that, for the first time ever was protected by encryption technology. So, that ladies and gents is officially the first ever eCommerce transaction, so props to you Dan!

The early 2000s: Introduction To Broadband

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

Now, with the introduction of broadband to people’s homes did not only mean that more people were purchasing online, it also meant that people were starting to conduct more research before placing orders. With easy access to the internet increasing, the average consumer would now spend time researching products and searching for more competitive prices before just making going ahead with a purchase.

Key Brands In eCommerce

The eCommerce giants, Amazon and eBay have been leaders in the industry from the very beginning. These are the first well-known eCommerce brands that arrived on the block and still are maintaining their rightful crowns.

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

Along with the growth of Paypal also transforming the way that consumers would be able to 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 to their account. With the ease of using Paypal on a mobile device, the platform has lent a hand to the rise in mobile commerce.

The 2010s: The Rise Of mCommerce

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

Not only do 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 website visibility, the way users are using mobile isalso causing a shift in a shoppers behaviours. Whilst online product research may have begun in the early 2000s smartphones have taken this to a whole new level – GE Capital Retail Bank found that in a recent study 81% of shoppers will not research a product online before thinking about buying it.

With the likes of Google always at their fingertips, shoppers will not turn to the web to read reviews or look for other offers online, whether they are browsing websites at home, on the bus to work, or right before they join a queue to buy in the store.

The 2010s: The Effect 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. It allows consumers to feel equal to brands on social, not below them and has changed the way they communicate with the business.

Consumers are likely to interact with brands on social before they make the decision to shop with them, and a brand’s social presence can be highly influential in how shoppers perceive them. Consumers have much higher expectations for brands on social platforms. If a retailer does not meet these expectations we have in our heads, it makes it very easy for us as consumers to move on and find a different brand.

However, the use of social media has opened up a lot of new exciting opportunities for brands to sell their products online. Facebook, for example, has over 1.6 billion active users every single 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.

So, instead of requiring users to find their way back to your online store to place an order user 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 in order to gain new customers.

See also: Are You Using The Right Social Media Platform For Your Business?

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 get excited about what the future holds for technology and how the experience for both consumers and retailers will continue to change.

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