Recently, the Pew Internet & American Life Project found that 66 percent of American adults online have used the Internet to make at least one purchase. However, even though ecommerce in its strictest definition means that a sales transaction has taken place online, if the definition is expanded to include product searches and research, the number of American adults engaged in ecommerce jumps to an astonishing 93 percent. The Internet does, indeed, provide varied opportunities and experiences when it comes to buying things.
In the beginning: EDI and ARPAnet
The history of ecommerce basically starts in the 1960s. At this time, businesses used computer interaction for electronic transactions. Electronic Data Interchange (EDI) was the way that businesses could share information electronically with each other. This type of exchange became increasingly important as credit cards became a part of the commerce landscape. Eventually, though, Edi was replaced by ASC X12, a protocol developed by the American National Standards Institute in 1979, designed for sharing business documents and information electronically. Additionally, ARPAnet was being developed by the military for communications purposes. ARPAnet was the source of the “dial up” mode of accessing a computer system.
However, everything up to 1982 was soon replaced by Transmission Control Protocol and Internet Protocol (TCP/IP – now you know what those letters mean) Instead of sending signals individually along one route, TCP/IP uses packets, sending information along different routes. Packet-switching technology is the key to today’s modern Internet and one of the biggest developments in the history of ecommerce.
Shopping online – ecommerce emerges
The first instance of true ecommerce from the standpoint of individuals connected to some sort of computer Internet system, occurred in the middle of the 1980s. CompuServe (the first popular provider for home PCs) began offering a connection to 110 different merchants through the Electronic Mall. It didn’t catch on as much as CompuServe hoped, but it serves at the first examples of ecommerce in a form similar to what we have today.
The real progress of the Internet as we know it today came in 1991 when Tim Berners-Lee, in conjunction with CERN, developed the WorldWideWeb (WWW) using hypertext and an Internet browser that was user-friendly (the first widely distributed browser, Mosaic, appeared in 1993, developed by Marc Andreesen). But, still, businesses could not operate online until a year later, in 1991, when the ban was lifted on commercial businesses operating online. You can imagine how ecommerce began to take off from there.
Other developments that contributed to the development of ecommerce include:
- 1994’s Netscape release that included SSL, the security protocol used to ensure privacy and protection during online transactions.
- Third-party payment services in 1994 and 1995 (First Virtual and CyberCash) for credit card payment processing over the Internet.
- Digital certificates and IDs developed by VeriSign in 1995.
Amazon and eBay revolutionize the way we buy
Amazon and eBay are the main pioneers when it comes to selling online. The history of ecommerce owes a great debt to Amazon and eBay. These companies revolutionized the face of the Internet, as well as the way we buy things.
Amazon was the first worldwide merchant. By the end of August 1995 – just a month after Amazon founder Jeff Bezos sold his first book from his garage in Seattle – Amazon was selling in all of the states in the U.S., and to 45 countries. Bezos realized that the Internet made it possible to easily take and process orders, and to ship them. It also provided a way to coordinate inventory by taking orders, and then buying direct from the publishers.
eBay allows just about anyone to be an online merchant. Founder Pierre Omidyar started eBay when he developed AuctionWeb, a site from which he offered a broken laser pointer. It sold – to a collector of broken laser pointers. The idea was that the Internet was the great leveler. Since its beginnings in 1995, eBay has developed a sophisticated system that allows anyone to set up a storefront and sell merchandise.
Today, the history of ecommerce moves forward. There are a number of payment options and abilities, from PayPal to eChecks to credit cards to systems of barter. Online buying is not restricted to consumer items and novelties: There are even ecommerce Web sites where you can order groceries for home delivery, and you can order tonight’s pizza dinner online as well. With so much available, it is possible to find specialty items for almost anyone, making it possible to find nearly anything you want, and have shipped directly to you.