Ecommerce is the buying and selling of goods and services on online marketplaces. Some of the most popular ecommerce platforms include Amazon and eBay.
Ecommerce first emerged in 1979, when English inventor Michael Aldrich invented electronic shopping by connecting his TV to a transaction-processing computer via telephone lines. It was a precursor to modern online shopping.
The Early Years
The term e-commerce is short for electronic commerce and describes the buying and selling of goods or services over computer telecommunication networks. It encompasses both business-to-consumer and business-to-business transactions.
In the early days of online shopping, companies like CompuServe allowed consumers to access their products and services over computer telecommunication networks. But the first online transaction wasn’t until 1979, when British inventor Michael Aldrich connected a modified television to a transaction-processing computer via telephone line.
By the late 1990s, the Internet was being widely adopted. And that’s when eCommerce really started to take off. One of the most significant advancements in ecommerce was Amazon’s 1995 launch as an online bookstore. It was a revolutionary move that offered customers more selections than traditional brick-and-mortar stores. Amazon also pioneered the addition of product reviews, which is still considered one of the most effective marketing tactics in ecommerce today.
The 90s saw a number of key innovations in ecommerce including the launch of an online web browser called Netscape Navigator, created by Marc Andreessen and Kim Clark, and the development of PayPal, a secure method for making digital payments. And in 2000, Google introduced Google AdWords, a tool that helps retailers advertise their products to potential customers. And the 2010s brought us a host of popular brands and products like Amazon Prime, Apple Pay, Etsy, and Cyber Mondays.
The Internet’s Early Days
The earliest days of eCommerce started in the 1960s with the creation of the Electronic Data Interchange (EDI). This allowed businesses to transfer orders and invoices between trading partners over a digital network.
It was the first of its kind, allowing companies to exchange data electronically and eliminate the need for paper. 1969: Dr. John R. Goltz and Jeffrey Wilkins start CompuServe, the first online service provider. 1979: Michael Aldrich invented electronic shopping, connecting transaction-processing computers and televisions over a telephone line to create the first digital marketplace.
1991: Tim Berners-Lee created HTML, Hypertext Markup Language and a programme that allowed for the creation of web pages. The internet was born in closed form at CERN but became accessible to the public in 1992.
1997 to 2001: The rapid expansion of the Internet led to a speculative investment bubble, often referred to as the dot-com crash or dotcom clash that popped in late 1990s and lasted until 2004. Several large eCommerce companies were forced to shut down but others continued to grow and thrive.
With improved internet speeds and increased penetration, consumers began to rely more on e-commerce as their preferred method of retailing. In 2016, eCommerce accounted for almost 20% of all retail sales worldwide. This dominance is due not only to consumer preferences but also to the ease of research and competitive pricing available over the web.
The Internet’s Early Years
In pre-Internet days, a business’s customer base was limited to those within its local area. To reach new customers, a company would place ads in the newspaper and other community publications, attend networking events and wait for local customers to come to them. The Internet has completely changed this way of doing business.
The Internet began as a government-controlled project that allowed information to be shared among universities and research centers in the United States. The project grew in scope after the Soviet Union launched the first satellite, Sputnik, in 1957. This spurred the Defense Department to explore ways that information could still be disseminated if a nuclear attack destroyed the United States’ communications systems.
In 1969, CompuServe, the first significant eCommerce company, was established. In 1979, British inventor Michael Aldrich is credited with the invention of electronic shopping. His process involved connecting a modified television to a transaction-processing computer via telephone line, which made it possible to transmit data securely and electronically. By the 1990s, online commerce was on the rise as companies such as Amazon and eBay started to take off. By the end of the decade, the Internet had become a global network used for e-mail and online communication. It had also spawned innovations like Google AdWords, which allows businesses to pay for a listing in search results.