An Evolution of eCommerce: Where Did Online Shopping Come From?

There’s something so iconic about that scene in Pretty Woman – you know, the one where Julia Roberts rocks up in the boutique, dangling shopping bags by the dozen and delivers a scathing ‘Big mistake. Big. Huge.’ to that snooty shop assistant.

And, while it’s pretty difficult to do that with online shopping (which is arguably both good and bad), eCommerce is definitely no mistake – and it’s certainly making retailers a pretty penny.

(More than pretty, we would say, considering the eCommerce industry as a whole is estimated to be worth a stupendously huge $6.33 trillion in 2024).

But how did eCommerce come about? Who looked at shopping, and the Internet, and thought ‘you know what lads, I’ve got an idea here…’? And, perhaps more importantly, where is it going? If technology is constantly evolving, what does that mean for the future of online shopping?

Well, people reading this, fortunately for you we had the same questions – so, without further ado, let’s hop on in…

So, who came up with online shopping anyway?

Turns out, the ‘lad’ who looked at highstreet shopping and said ‘hmm, not for me’ was a bloke called Michael Aldrich. So the story goes, Aldrich was out doing a food shop with his wife, and wondered if there was a way to bring the market to him. So, what did he come up with?

Like anyone would, Aldrich decided to rig television and telephone lines and create the first instance of ‘online shopping’. Technically, this is closer to what we’d call teleshopping (think QVC and nice ladies trying to flog perfumes or jewellery). Products were advertised on the telly, and people could call up and order what they wanted through a processing centre, which would then deliver your items right to your door. Not bad for 1979.

BUT. (And it’s a big but). This doesn’t quite fall under the umbrella of the first online purchase. For starters, the internet is suspiciously (and conspicuously) absent. Plus, payments were likely taken over the phone rather than conducted upon delivery, this isn’t exactly an online transfer of money.

So, we continued our search…

What was the first true online purchase?

Finding the first thing sold on the internet was actually a little more complicated than we thought it would be. Before we get into the rabbit hole we found, we should probably clarify what we mean by online purchase. We think we can all agree, the criteria needed here are:

• For the sake of argument, the item being sold needs to be legal (hold the phone, caller, we’ll explain in a minute).
• There needs to be an electronic payment.

The latter qualification is key here – it’s not really online shopping if you’re not paying online.

So, where does that leave us?

Well, dipping briefly into our first point (and some mild shenanigans), some consider the purchase of marijuana by students at MIT as the first thing sold online – using ARPANET of all things (this being an early form of an online network, primarily in research and academic circles). However, this being the early 70s, not only was the transaction illegal, but it’s also highly unlikely the students paid online. Rather, this appears to be an instance of the online world facilitating a deal. DISQUALIFIED.

Next up, a little over a decade later in 1984, a lovely 72-year-old lady called Jane Snowball used Videotex to order some staple groceries from her local shop. However, as much as we want this to be the first transaction, our Jane paid in cash on delivery – and is summarily DISQUALIFIED.

So we come to a man called Dan Kohn. Now, our Dan was living in 1994, and was one of the founders of a website called NetMarket. Using this platform, on the 11th August, Dan sold a Sting CD to a friend living in Philadelphia. This friend paid around $12 (plus shipping), and used encryption software to send his card details online.

We have a WINNER. Of course, online shopping didn’t stop there. It’s gone from strength to strength – and eCommerce shows no sign of slowing down.

The movers and shakers of eCommerce

With this, somewhat interesting, start, the world of eCommerce has only gained in popularity and strength over the years. Here are some of the key players (or businesses) that’ve influenced the online purchasing world up to the present day.

1982 saw the launch of the Boston Computer Exchange, who are considered one of the first eCommerce companies in the world. Here, a lucky 80s tech fan could explore a new marketplace for used computers.

(If you’re wondering why this didn’t make it as the first online sale, users of the BoCoEx paid over the phone… so, DISQUALIFIED).

Of course, we can’t mention eCommerce without discussing the launch of the World Wide Web. Our main man, Tim Berners-Lee, released the code for WWW into the public domain on the 30th April, 1993 (four years after he came up with the idea).

Arguably the biggest eCommerce GIANT in the world, Amazon launched initially in 1995, as a bookseller. Another key event in this year was the release of SSL (Secure Sockets Layer). This was an early encryption method, designed to protect online payments, and has gone through many iterations since to become the one used today.

Continuing the trend of innovation in the late 90s, 1998 saw the founding of PayPal. Whilst not the first, PayPal is up there with the original payment systems specifically designed for electronic payments and money transfers – and is still popular for secure and protected online transactions nearly 30 years later. Meanwhile, a year later in 1999, Alibaba was released to the public. One of the world’s largest wholesale B2B eCommerce platforms, Alibaba is based in China.

Once we all got over the Y2K issue, our love of technology meant new sites and innovations followed swiftly on the heels of cargo pants and wearing jeans under dresses (look, not every style is a winner, but you can always say we tried). 2000 saw Google launch Adwords, the beginning of pay-per-click advertising, 2004 was the year our pals at Shopify launched (happy anniversary!), whilst 2005 had the double-whammy of Amazon Prime and Etsy.

Now, we could keep giving you a year-by-year playback of every instance of eCommerce over the past couple decades, but that could get tedious, so, in the spirit of Rizzle Kicks, let’s skip to the good bits.

In 2016, Facebook started Marketplace, followed speedily by the shoppable feature on Instagram in 2017.

2020, aside from being a time for everyone around the world, showed a huge boom in eCommerce and online purchases. When we were all stuck inside, the ONS reports that online spending reached a record 33.9% share of the retail market in the UK. According to Forbes, over in America eCommerce purchases rose a staggering 55% compared to two years pre-pandemic.

The pandemic may have exaggerated the numbers, but trends show that online sales were on the rise regardless. And, we’re still big fans of shopping online – helped by a range of alternative finance options like buying on credit, or ‘buy now, pay later’ policies.

eCommerce of the future

So now we’re here, in 2024. eCommerce and online shopping has been trucking along for around half a century (depending how you look at it). But where do we think it’s going in the future?

Well, technology is an obvious one. With the incorporation of AI into eCommerce, big shifts in personalisation and targeted advertising will probably create a more bespoke online shopping experience. Just look at what the Metaverse is doing with virtual reality technology.

(Yes, we know the mixed-reality hype has died down, but we don’t think it’ll be the last we hear of VR or AR assisted eCommerce).

In fact, when asked, our very own Barry G. mentioned that the ‘evolution of eCommerce will have a lot more focus around ‘immersive commerce’ and augmented reality’ – especially since you can see this a fair bit already on Amazon. Shopify has gotten in on the action too, ‘making it easier to create AR experiences with basic functionality in their mobile app, and by supporting a wide range of AR files’.

Accessibility is another. On the whole, the internet (and online shopping) is reasonably accessible to people with different needs. BUT. There’s always room for improvement. New technology and the demand for better screen-readers or interactive accommodations will definitely influence the future of eCommerce.

Note: accessibility will be made even more important with the new European Accessibility Act (EAA) set to come into play in 2025.

From a product perspective, we reckon eCommerce is going to be gearing up for a wave of secondhand or resale sites. Not to sound too corporate, but consumers are looking at the way their shopping habits impact larger issues – like climate change, waste disposal and landfill, and ethical considerations around the production of various items (especially in the fashion industry). Reusing, recycling, upcycling, and reselling aren’t just twee terms anymore – and eCommerce platforms can provide an online marketplace for future sales.

To add another insight from one of our team, John W reckons that ‘what we’re seeing is a repeat of the offline trend of centralisation followed by dissatisfaction. Initially, big-box stores pulled business from the highstreet due to the convenience factor and, once they'd effectively destroyed their competition and the highstreet, they started increasing prices.

'Dissatisfaction with the experience of big-box stores, added to the lowering quality and increasing prices, people (not all, but a significant minority) started to shop with independent retailers - leading to a boom in 'boutiques' and independently run retailers. The same happened with Amazon, they gobbled up everything and sent a load of companies out of business, then started bumping prices, stealing retailer ideas and offering their own brand copies, lowered quality etc. We're therefore at the beginning of a shift to boutique and independent online retailers.

'The unfortunate thing is, once these retailers hit a certain level of success, they're almost inevitably bought out by conglomerates and lose their soul. Before then, we can look forward to a huge boom time for independent and boutique retailers as customers vote with their feet.’

But that’s just our thoughts. What about you? Where can you see eCommerce evolving in the future?

OR, if you prefer to stick to the here and now, why not have a chat with one of our team about your eCommerce business? (See what we did there, absolutely seamless segue…)