A History of eCommerce & What the Future Holds for eCommerce

eCommerce has become as much a part of most people’s lives as retail shopping was 20 years ago, especially with the push of COVID-19. Chances are you’ve made an online purchase – a new song, clothing item, or even something more substantial – within the last few weeks.

It’s probably a safe bet that your company has a lot riding on its current eCommerce efforts. But have you ever looked back at where eCommerce began? It might help you better predict where it’s going and how your company can prepare.

Key Takeaways

• The roots of eCommerce stretch all the way back to the 60s. We can trace its origins to the Electronic Data Interchange, which was used to transfer data from one computer to another.
• In the 2010s, Shopify and WordPress made it easy for people with no technical background to set up eCommerce websites.
• In today’s world, using AI in commerce is crucial. Businesses can better tailor their suggestions for products and services, enhance their shipping capabilities, boost marketing effectiveness, and much more with its assistance.

The 4 Eras of eCommerce (So Far)

If you think eCommerce is a relatively new phenomenon, you might be surprised to learn that it goes back several decades. Here are the four eras of eCommerce thus far:

The 60s to 80s

The roots of eCommerce stretch all the way back to the 60s. We can trace its origins to the Electronic Data Interchange (EDI), which was used to transfer data from one computer to another.

For example, trading partners used EDI technology to exchange invoices, orders, and other business transactions. Eventually, EDI led to teleshopping, which resembles today’s eCommerce much more remarkably. Users could place orders with grocery stores and local businesses through a device hooked up to their televisions.

The 80s to 90s

France was the first to introduce something that functioned like the modern World Wide Web. Minitel was invented in 1982 and only went out of use in 2012. The device was a beige computer with an attached keyboard. At first, it gave users access to the phonebook and little else, but eventually, it could be used to look up:

• Bank accounts
• Exam results
• Stock prices
• Travel reservations
• University applications
• Weather reports

Though it pioneered much of the eCommerce revolution, it couldn’t compete with what the Internet would offer users.

The 90s to 2000s

In 1990, Tim Berners Lee and his friend, Robert Cailliau, famously published a proposal for what they called “WorldWideWeb.” By the following year, the Internet was flourishing. The National Science Foundation rescinded restrictions that kept it from commercial users, and online shopping as we know it today began. Even in these early days, it became clear that eCommerce would be an unprecedented force affecting how the entire world purchased products.

The book Future Shop: How New Technologies Will Change the Way We Shop and What We Buy predicted how combining new information technologies and public policies would help consumers make sense of a marketplace that has been growing more and more complex in recent decades. You only need to think about sites like Amazon and YouTube channels that feature expert reviews to see how prescient this prediction was.

In 1995, the NSF started registering domain names for a fee. The domains quickly grew from 120,000 to more than 2 million in just 3 years. That much growth in that short period proved overwhelming for the NSF, which abdicated its role as a regulator of the Internet, mainly handing the job over to the commercial sector.

One example of innovation that helped move eCommerce forward was Netscape’s invention of Secure Socket Layers (SSL), a security protocol that promised its users the comfort of encryption while shopping. Encryption remains a vital part of online shopping today. It’s hard to imagine eCommerce without this decades-old technology.

2010 to Present

The big story for the last 15 years has been social media. While SixDegrees, founded in 1997, is probably the first example of such a site and AOL messenger, also founded in 1997, undoubtedly influenced later versions. Platforms like MySpace and, later, Facebook got the ball rolling with social media.

Today, it’s hard to separate eCommerce from these platforms. Almost every company uses social media to draw attention, bring people to their websites, gain email subscribers and, ultimately, sell.

The establishment of Facebook has been a significant event in the history of social media. Facebook, which has become the “flagship” of social media over time, was founded on February 4, 2004, by Mark Zuckerberg, who studied at Harvard University. Following Facebook, several other social media platforms were created.

The platforms that are still relevant today are as follows:

Twitter => 2006

WhatsApp => 2009

Instagram => 2010

Snapchat => 2011

TikTok => 2016

BeReal => 2020

Another significant advancement during the past 10 years has been sites like Shopify and WordPress, making it easy for people with no technical background to set up eCommerce websites. eCommerce has become fertile ground for new companies between these sites and social media platforms. Entrepreneurs who take the time to learn the ropes can quickly become significant players.

Brands are giving importance to Millennial and Gen Z shopping habits. Though they are generations one after another, surprisingly, their shopping habits are different. Whilst, Millennials are more old school and used to shopping from physical stores, Gen Z is all about online shopping.

eCommerce Revolutionisers: Mid-90s to Early 2000s

Amazon

Though many predicted it was an idea guaranteed to self-destruct, Amazon introduced the now-popular concept of sharing user reviews – including those that are incredibly unflattering and may even hurt a product’s sales.

eBay

While Amazon would eventually allow something similar, eBay popularised the idea of letting one stranger sell their property to another. Again, the concept was initially derided. Though the first-ever sale on eBay didn’t look promising (it was a broken laser pen) and the company has declined since. However, there’s no doubt that it revolutionised eCommerce.

Napster

Speaking of companies that enjoyed a meteoric rise, Napster was the predecessor to iTunes and, arguably, YouTube. Like eBay, it provided a platform that strangers could use to carry out transactions, albeit illegally. Though Napster’s success was controversial, to say the least, it proved that a website where people shared with no real direct benefit could be viral.

The Dot-com Boom and Boost

The dot-com bubble started in 1998 and ended in 2000. As of 2000, the so-called “dot-com bubble” resulted from a confluence of factors, including the prevalence of speculative or trend-based investing, the abundance of venture capital funding for startups, and the inability of dot-com to generate a profit. In the 1990s, investors poured money into Internet firms in the hopes that they might someday turn a profit. Fearing they would miss out on the lucrative opportunities presented by the increasing Internet use, many investors and venture capitalists abandoned a cautious approach. 

The deflating of the dot-com bubble was the primary cause of the stock market crash of 2000. It burst when the majority of publicly traded technology businesses that had raised money folded when the money ran out. By the end of 2001, the majority of dot-com companies that were publicly traded had gone out of business, wiping out trillions of dollars worth of investor capital.

Following the dot-com bubble, the Internet continued its growth. Subsequently, social media came on the rise.

The Future of eCommerce

The Continued Globalisation of eCommerce

COVID-19 has changed and improved eCommerce for the better. The growth of eCommerce happened faster with the push of COVID. Looking at eCommerce’s future, we can say that eCommerce companies that can add a human touch to their strategies will succeed.

Businesses now have to react to the effects of globalisation by producing localised digital content for their current and potentially global markets. Additionally, it has compelled companies that formerly focused primarily on domestic and brick-and-mortar marketplaces to develop more user-friendly websites that accept orders from customers worldwide.

Undoubtedly, it must be secure whether a customer is using an eCommerce site in their own nation or halfway around the world. However, due to globalisation and the possibility that a visitor from another continent could arrive, businesses now need to exercise greater caution. 

Users will only be encouraged to purchase from a company’s website if they feel secure disclosing their personal and sensitive bank information.

The Continued Rise of Mobile Commerce

While eCommerce entails online shopping on a computer, mobile commerce, or social commerce, it involves shopping through a mobile device (usually a smartphone or tablet).

Mobile commerce only made up 3% of eCommerce as recently as late 2010. However, that number has been rising over time. That percentage had increased to 11% after the previous holiday shopping season.

“Buy buttons” have been added to social media platforms like Facebook, Twitter, and Pinterest so that users may make purchases without leaving the website. Furthermore, many retailers have added one-click checkout to their websites. Customers must only submit their payment information once for this method, after which they can use the one-click option to make purchases without having to do so again.

The Continued Growth of Social Media Commerce

Social media platforms like Facebook and Instagram are used to promote the direct purchase and sale of goods and services.

Everyone has access to the same tools, so the advantage will be to those who can create a real connection with their audiences. The rise of YouTube celebrities is already showing what’s to come. Influencer marketing is already relatively new, but the industry was worth $13.8 billion in 2021.

That’s not to say your company needs a YouTube channel, but there’s every reason to believe that the overall trend for eCommerce continues moving toward a more personal approach. Use your platforms to create genuine connections, and customers will respond by giving you real profits.

The Rise of AI in eCommerce

Artificial intelligence (AI) in trade and commerce is now crucial. Businesses can better tailor their suggestions for products and services, enhance their shipping capabilities, boost marketing effectiveness, and much more with its assistance. 

Many eCommerce businesses are aggressively investing in AI to stay competitive and give their customers the best possible customer experience. We’ll discuss several examples of how AI might be applied to eCommerce in this post and how many companies are already using AI to improve their offerings.

Wrapping Up

Segmentify offers eCommerce businesses the best AI personalisation tools to improve their customer experiences and conversation rates. Contact us for more information regarding our products, and book a free trial to check out the best personalisation tools!