History of online shopping | Global Encyclopedia
Summary
TLDRThe COVID-19 pandemic has accelerated the adoption of online shopping, with internet sales skyrocketing to 30% in April 2020. Originating from early experiments like Jane Snowball's 1984 order via 'Videotex', the industry has evolved through innovations like NetMarket's secure transactions and Amazon's launch. Globalization and consumer behavior shifts played pivotal roles, with smartphones and internet accessibility propelling the online shopping revolution.
Takeaways
- 🛒 The COVID-19 pandemic has significantly increased online shopping, with many turning to e-commerce for essentials and non-essentials alike.
- 📈 Online sales have seen a dramatic rise during the pandemic, with statistics showing a jump from 2.8% to 30% in the UK within a few months.
- 🏡 The shift to online shopping has been a gradual process, with the roots of modern e-commerce dating back to the 1980s.
- 👵 The first recorded online shopping transaction was by a grandmother in England in 1984, using a remote control to order groceries via a 'Videotex' system.
- 🌐 The early 1990s saw the emergence of online marketplaces like NetMarket and the launch of major e-commerce players such as Amazon and eBay.
- 📈 Globalization in the mid-1990s played a significant role in the growth of e-commerce by enabling rapid scaling of production and meeting consumer demands.
- 📱 The widespread adoption of smartphones by 2017 facilitated a significant increase in online shopping, with many consumers making regular online purchases.
- 🌟 The success of e-commerce is attributed not only to technological advancements but also to a shift in consumer behavior and a desire for convenience.
- 🔍 The internet has empowered consumers with the ability to research products extensively, compare prices, and make informed purchasing decisions.
- 📊 The pandemic has accelerated the adoption of online shopping, making it a mainstream behavior and potentially shaping the future of retail.
Q & A
How has the Covid-19 pandemic impacted online shopping habits?
-The Covid-19 pandemic has significantly increased online shopping as people relied on e-commerce for contact-free and fast delivery of essentials and non-essentials, leading to a spike in online sales.
What was the percentage of internet sales of total retail sales in the UK in April 2020, and how did it change from 2006?
-In April 2020, internet sales as a percentage of total sales in the UK shot up to 30%, compared to 2.8% in November 2006.
What was the first item ever purchased online through a digitally secure transaction?
-The first item purchased online through a digitally secure transaction was a Sting CD, retailing at $12.48 (£10), on NetMarket in 1994.
Which company was one of the early adopters of online sales, and what year did they start?
-Pizza Hut was one of the early adopters of online sales, starting in 1994 through their 'PizzaNet' portal.
What was the role of globalization in the growth of online shopping in the mid-1990s?
-Globalization in the mid-1990s played a significant role by enabling production to scale up quickly and significantly, making e-commerce a viable and highly profitable selling channel.
How did the consumer shift in behavior contribute to the rise of online shopping?
-Consumers embraced online shopping as a democratized way to consume, conducting extensive research and evaluating price-to-value ratios before making purchases.
What was the approximate smartphone penetration rate worldwide by 2017, and how did it influence online shopping?
-By 2017, smartphone penetration hit 80% worldwide, which greatly facilitated the increase in online shopping as more consumers had access to online platforms through their mobile devices.
Who was the first person to use a remote control to order groceries, and what was the technology used?
-Jane Snowball, a 72-year-old grandmother, was the first person to use a remote control to order groceries using the 'Videotex' system developed by Michael Aldrich in 1984.
What was the original purpose of the Videotex system used by Jane Snowball?
-The Videotex system was originally conceived as a social service for the elderly and disadvantaged, enabling them to order groceries and have them delivered to their homes.
What was the inflection point for online shopping as we know it today, and when did it occur?
-A real inflection point for online shopping as we know it today could be traced to around 2017, when many Americans were shopping online as frequently as doing routine chores.
What percentage of Americans used a computer or phone to buy something online in 2017, according to the Pew Research Center?
-According to the Pew Research Center, eight in 10 Americans used a computer or phone to buy something online in 2017.
Outlines
🛒 Rise of Online Shopping During the Pandemic
The COVID-19 pandemic has significantly increased online shopping, as indicated by a surge in online sales and a notable shift in consumer behavior. People have turned to e-commerce for everything from groceries to less essential items, leading to a rapid growth in the sector. Historically, online shopping has evolved from its early days in the 1990s with companies like Amazon and eBay, to a point where it now constitutes a substantial percentage of retail sales. The pandemic has accelerated this trend, with internet sales in the UK jumping from 2.8% in 2006 to 30% in April 2020. The script also recounts the first known online shopping transaction by Jane Snowball in 1984, which laid the groundwork for today's billion-dollar industry.
🌐 The Evolution and Global Impact of E-Commerce
The narrative continues by exploring the evolution of online shopping, emphasizing the role of globalization and technological advancements in making e-commerce a profitable channel. The mid-1990s saw a significant shift with companies like Amazon, eBay, and Rakuten paving the way for a diverse and accessible online marketplace. The script highlights how the internet empowered consumers to research, compare, and purchase goods, leading to a democratization of consumption. A pivotal moment in the growth of online shopping is identified around 2017, with smartphone penetration and a marked increase in the frequency of online purchases among Americans. The paragraph underscores the consumer-driven nature of this shift and the transformative impact of the internet on shopping habits.
Mindmap
Keywords
💡Ecommerce
💡Contact-free delivery
💡Panic buying
💡Online sales spike
💡Digitally secure transaction
💡Globalisation
💡Consumer behavior shift
💡Smartphone penetration
💡Videotex
💡NetMarket
💡PizzaNet
Highlights
The increase in online sales during Covid-19 has significantly changed consumer buying habits.
Online shopping has become mainstream only recently, despite its existence for decades.
In the UK, internet sales as a percentage of total sales jumped from 2.8% in 2006 to 30% in April 2020 due to the pandemic.
In May 2020, US non-store retailer sales were up 30.8% from May 2019.
Early online shopping was a novelty, with people buying unique items like records or action figures on eBay.
The first recorded online shopping transaction was in 1984 by a grandmother in England using a remote control to order groceries.
The early online marketplace NetMarket in 1994 marked the first digitally secure transaction, selling a Sting CD.
Pizza Hut was one of the early adopters of online sales, starting with their 'PizzaNet' portal in 1994.
Globalization in the mid-1990s played a significant role in making ecommerce a viable and profitable channel.
Consumers' shift in behavior towards online shopping was a key factor in its growth.
The inflection point for modern online shopping can be traced back to around 2017 when it became a regular activity for many Americans.
Smartphone penetration reaching 80% worldwide by 2017 greatly facilitated the increase in online shopping.
Amazon, which started in the mid-'90s, and eBay, which followed in 1995, provided platforms that set the stage for the online shopping transition.
The connected world enabled quick scaling of production for products at various price tiers, meeting consumer demands.
The internet provided consumers with tools to research extensively, evaluate price-to-value ratios, and purchase items.
Transcripts
How many times have you clicked ‘check-out’ to buy something in the last few months?
If the spike in online sales amid Covid-19 is any indicator
(or, perhaps, the list of merchants on your last credit card statement), it’s probably a lot.
Groceries, books, beauty supplies, inflatable children’s pools as the pandemic persists,
we have relied on ecommerce to get things to our doors,
contact-free and fast. These things range from essentials to not-so-quite essentials:
in Canada in April, online shoppers trapped at home were scooping up canned quail eggs,
sitar strings and trampolines for the kids. From panic buying and hoarding, we already
know that the stress of the pandemic can break our brains and morph our buying habits.
However, even though online shopping has been around for years – actually, decades – it’s
only become truly mainstream recently. Amazon has been around since the mid-’90s,
but by even 2010 in the US, online shopping only made up just more than 6% of all retail sales.
And now? Internet sales as a total percentage of sales in the UK
rocketed from 2.8% in November 2006 to 18.9% in February 2020 – and then shot up again to 30%
in April 2020 because of the pandemic. In May 2020, sales from “non-store retailers” in the
US were up 30.8% from May 2019. Before Covid-19,
relying on the internet for shopping hadn't been so ingrained in our day-to-day lives.
A couple of decades ago, online shopping was a novelty, just as the internet itself still was.
Most people were only buying hard-to-find records or obscure action figures on eBay.
So how did we get to the point where online shopping became a way of life?
And where will it guide us in the post-pandemic future?
In 1984, in Gateshead, England, a 72-year-old grandmother named Jane Snowball sat down in her
armchair and used her television remote control to place an order of margarine, cornflakes and eggs.
She used the ‘Videotex’ system developed by English inventor Michael Aldrich,
says Jonathan Reynolds, associate professor in retail marketing and deputy dean of Oxford
University’s Saïd Business School. Aldrich took her TV and turned it into a computer terminal:
she used the Videotex technology to generate a shopping list on her TV screen,
and her order was phoned in to her local Tesco. The goods were then sent to her door, like magic.
“It was originally conceived as a social service
[for the elderly and disadvantaged],” says Reynolds. “The system, which
pre-dated the public Internet, relied upon the development of a closed network of computers.”
Little did Aldrich or Snowball know that their nifty tech experiment laid the framework for an
industry now worth £118bn ($186bn) in the UK. Following this early grocery service,
the next major innovation in the online shopping space is said to have occurred in 1994, when a
computer whiz called Daniel M Kohn, then aged 21, set up an online marketplace called NetMarket. It
was not only dubbed a “new venture that is the equivalent of a shopping mall in cyberspace”,
but also marked the first digitally secure transaction. The first purchase? A Sting CD,
retailing at $12.48 (£10). From then, the early internet – with
its screeching dial-up sounds – trickled its way into people’s homes. And while today virtually all
big corporations are online, in the early days only a few committed to an ecommerce strategy.
One of those was Pizza Hut. In 1994, the US chain started selling pizzas online through
their early ‘PizzaNet’ portal – a flat, grey website that looks as ancient as you may expect,
with fields only for a customer’s address and phone number.
But 1994 was also a watershed year for online shopping: it’s the same
year Amazon launched – which, at that time, sold mostly books. eBay followed in 1995.
Rakuten, Japan’s biggest ecommerce site that’s expanded into Western markets the past few years,
launched two years later. China’s Alibaba, in 1999. These companies were setting the
stage for an online shopping transition: a wide variety of offerings, consumer
accessibility and innovative technology. Mid-1990s globalisation was also a major
catalyst that “made ecommerce a viable and highly profitable selling channel”,
says Thomaï Serdari, adjunct professor at New York University's Stern School of Business.
The connected world enabled production to scale up quickly and significantly,
for products at many price tiers. “Consumers were eager to find either the best or the most
acceptable quality product at the prices they could afford. The internet gave them the tool
to conduct extensive research before purchasing an item. It also gave them the insights on how
to evaluate the price-to-value ratio and finally the means to purchase.”
While early trailblazers such as Amazon and eBay – which dominate the industry today – provided the
platform for online shopping, Serdari says it was really the consumer shift
in behaviour that led to online shopping taking off. “It was actually consumers
who embraced this type of marketplace as a democratised way to consume,” she says.
A real inflection point for online shopping as we know it today could be traced to around 2017.
By the end of the prior year, many Americans were “starting to shop online as often as
[they] take out the trash”; according to the Pew Research Center,
eight in 10 Americans used a computer or phone to buy something online that year – as opposed to
the just 22% who did so in 2000. More phones in consumers’ hands
helped facilitate the jump as smartphone penetration hit 80% worldwide by 2017.
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