In past times the marketplace, including real marketplaces conducted in town squares under stalls and awnings, relied exclusively on the use of physical money, coins and notes. This was slow to change, even after electronic payments were being used in stores and other businesses. Many traders were resistant to the new technology – largely because it incurred cost to the trader, and some even tried to pass this on to the customer as a deterrent. A key difference between ecommerce and shopping or trading in the physical world is that ecommerce systems deliberately make it efficient and effective to process small transactions rather than setting minimum transaction values.
Even today, most stores have a minimum spend for credit card transactions, which has prompted the introduction of alternative ecommerce solutions for small High Street purchasing such as the London-based Oyster swipe-card.
In the 1970s the first ecommerce solutions, electronic transaction facilities like Electronic Funds Transfer and Electronic Data Exchange were introduced, enabling companies to transfer funds or send documents such as invoices and purchase orders electronically. By the 1980s the widespread introduction and use of automated street cash machines (ATMs), credit cards and telephone banking were further steps towards universal acceptance of ecommerce hosting. In 1981 the UK travel agent Thomson Holidays became the first company to use online reservation facilities – the first online shopping as we know it today. By the mid-80s Tesco, the UK-based superstore was offering online shopping, and the car dealer Nissan was providing online credit checking facilities from the seller’s site.
The advent of the Internet in the 1990s brought such facilities as Amazon.com and eBay on to the scene, along with enterprise resource planning, data warehousing and data mining. The development of proper security protocols was the next step, combined with DSL, or Broadband, allowing always-on connections to the Internet with the bandwidth to browse sites filled with content such as hi-res photos of products. Internet shopping had arrived!
By the Millennium many US and European companies were offering their services on the Internet and the word ‘ecommerce’ began to be heard to describe Internet shopping, trading and online payment methods. In a world where almost every household already had a PC and some kind of Internet connection, albeit in many cases only dial-up, the ecommerce revolution was just waiting to happen.
By 2000, companies were seeing their stocks rise if they simply added an e- prefix to their company name, culminating in the Dot.com bubble burst after traders abandoned caution and became over-confident after seeing huge growth over a short time in the e-trading sector. But this was a temporary setback, and by 2011 ecommerce and Internet shopping in the US alone was projected to reach $197 billion.
Nowadays, ecommerce has become part of our way of life and seems set to eventually replace physical trading and non-virtual premises altogether. Absolutely anything can be ordered and purchased over the Internet, from pizza to real estate, from printer cartridges and postal stamps to access to dating sites which can provide you with a life partner.