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
- š The COVID-19 pandemic has significantly increased online shopping, with many turning to e-commerce for essentials and non-essentials alike.
- š 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.
- š” The shift to online shopping has been a gradual process, with the roots of modern e-commerce dating back to the 1980s.
- šµ 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.
- š The early 1990s saw the emergence of online marketplaces like NetMarket and the launch of major e-commerce players such as Amazon and eBay.
- š 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.
- š± The widespread adoption of smartphones by 2017 facilitated a significant increase in online shopping, with many consumers making regular online purchases.
- š 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.
- š The internet has empowered consumers with the ability to research products extensively, compare prices, and make informed purchasing decisions.
- š 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 (Ā£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
š 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.
š 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
š”Ecommerce
š”Contact-free delivery
š”Panic buying
š”Online sales spike
š”Digitally secure transaction
š”Globalisation
š”Consumer behavior shift
š”Smartphone penetration
š”Videotex
š”NetMarket
š”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 ācheck-outāĀ to buy something in the last few months?Ā Ā
If the spike in online salesĀ amid Covid-19 is any indicatorĀ Ā
(or, perhaps, the list of merchants on your lastĀ credit card statement), itās probably a lot.Ā
Groceries, books, beauty supplies, inflatableĀ childrenās pools as the pandemic persists,Ā Ā
we have relied on ecommerceĀ to get things to our doors,Ā Ā
contact-free and fast. These things rangeĀ from essentials to not-so-quite essentials:Ā Ā
in Canada in April, online shoppers trappedĀ at home were scooping up canned quail eggs,Ā Ā
sitar strings and trampolines for the kids. From panic buying and hoarding, we alreadyĀ Ā
know that the stress of the pandemic canĀ break our brains and morph our buying habits.Ā Ā
However, even though online shopping has beenĀ around for years ā actually, decades ā itāsĀ Ā
only become truly mainstream recently.Ā Amazon has been around since the mid-ā90s,Ā Ā
but by even 2010 in the US, online shopping onlyĀ made up just more than 6% of all retail sales.Ā
And now? Internet sales as a totalĀ percentage of sales in the UKĀ Ā
rocketed from 2.8% in November 2006 to 18.9% inĀ February 2020 ā and then shot up again to 30%Ā Ā
in April 2020 because of the pandemic. In MayĀ 2020, sales from ānon-store retailersā in theĀ Ā
US were up 30.8% from May 2019. Before Covid-19,Ā Ā
relying on the internet for shopping hadn'tĀ been so ingrained in our day-to-day lives.Ā Ā
A couple of decades ago, online shopping was aĀ novelty, just as the internet itself still was.Ā Ā
Most people were only buying hard-to-findĀ records or obscure action figures on eBay.Ā
So how did we get to the point whereĀ online shopping became a way of life?Ā Ā
And where will it guide usĀ in the post-pandemic future?Ā
In 1984, in Gateshead, England, a 72-year-oldĀ grandmother named Jane Snowball sat down in herĀ Ā
armchair and used her television remote control toĀ place an order of margarine, cornflakes and eggs.Ā
She used the āVideotexā system developedĀ by English inventor Michael Aldrich,Ā Ā
says Jonathan Reynolds, associate professorĀ in retail marketing and deputy dean of OxfordĀ Ā
Universityās SaĆÆd Business School. Aldrich tookĀ her TV and turned it into a computer terminal:Ā Ā
she used the Videotex technology toĀ generate a shopping list on her TV screen,Ā Ā
and her order was phoned in to her local Tesco.Ā The goods were then sent to her door, like magic.Ā
āIt was originally conceived as a social serviceĀ Ā
[for the elderly and disadvantaged],āĀ says Reynolds. āThe system, whichĀ Ā
pre-dated the public Internet, relied upon theĀ development of a closed network of computers.āĀ Ā
Little did Aldrich or Snowball know that theirĀ nifty tech experiment laid the framework for anĀ Ā
industry now worth Ā£118bn ($186bn) in the UK. Following this early grocery service,Ā Ā
the next major innovation in the online shoppingĀ space is said to have occurred in 1994, when aĀ Ā
computer whiz called Daniel M Kohn, then aged 21,Ā set up an online marketplace called NetMarket. ItĀ Ā
was not only dubbed a ānew venture that is theĀ equivalent of a shopping mall in cyberspaceā,Ā Ā
but also marked the first digitally secureĀ transaction. The first purchase? A Sting CD,Ā Ā
retailing at $12.48 (Ā£10). From then, the early internet ā withĀ Ā
its screeching dial-up sounds ā trickled its wayĀ into peopleās homes. And while today virtually allĀ Ā
big corporations are online, in the early daysĀ only a few committed to an ecommerce strategy.Ā
One of those was Pizza Hut. In 1994, the USĀ chain started selling pizzas online throughĀ Ā
their early āPizzaNetā portal ā a flat, greyĀ website that looks as ancient as you may expect,Ā Ā
with fields only for a customerāsĀ address and phone number.Ā
But 1994 was also a watershed yearĀ for online shopping: itās the sameĀ Ā
year Amazon launched ā which, at that time,Ā sold mostly books. eBay followed in 1995.Ā Ā
Rakuten, Japanās biggest ecommerce site thatāsĀ expanded into Western markets the past few years,Ā Ā
launched two years later. Chinaās Alibaba,Ā in 1999. These companies were setting theĀ Ā
stage for an online shopping transition:Ā a wide variety of offerings, consumerĀ Ā
accessibility and innovative technology. Mid-1990s globalisation was also a majorĀ Ā
catalyst that āmade ecommerce a viableĀ and highly profitable selling channelā,Ā Ā
says ThomaĆÆ Serdari, adjunct professor at NewĀ York University's Stern School of Business.Ā Ā
The connected world enabled productionĀ to scale up quickly and significantly,Ā Ā
for products at many price tiers. āConsumersĀ were eager to find either the best or the mostĀ Ā
acceptable quality product at the prices theyĀ could afford. The internet gave them the toolĀ Ā
to conduct extensive research before purchasingĀ an item. It also gave them the insights on howĀ Ā
to evaluate the price-to-value ratioĀ and finally the means to purchase.āĀ
While early trailblazers such as Amazon and eBayĀ ā which dominate the industry today ā provided theĀ Ā
platform for online shopping, SerdariĀ says it was really the consumer shiftĀ Ā
in behaviour that led to online shoppingĀ taking off. āIt was actually consumersĀ Ā
who embraced this type of marketplace asĀ a democratised way to consume,ā she says.Ā
A real inflection point for online shopping asĀ we know it today could be traced to around 2017.Ā Ā
By the end of the prior year, many AmericansĀ were āstarting to shop online as often asĀ Ā
[they] take out the trashā;Ā according to the Pew Research Center,Ā Ā
eight in 10 Americans used a computer or phoneĀ to buy something online that year ā as opposed toĀ Ā
the just 22% who did so in 2000.Ā More phones in consumersā handsĀ Ā
helped facilitate the jump as smartphoneĀ penetration hit 80% worldwide by 2017.
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