Today we’re so used to buying goods online that it’s easy to forget eCommerce only took off a little over 20 years ago, in the early 1990s. Here we take a brief look at the fascinating history of eCommerce. How did it start, and which companies were the first to capitalise on the exciting new business opportunities presented by eCommerce?
The beginnings of electronic communications
The roots of eCommerce can be traced back to electronic communications developments of the 1960s, when businesses began using primitive computer systems to carry out electronic transactions like sharing office documents with another computer, such as order forms, shipping confirmation and invoices. This was achieved using Electronic Data Interchange (EDI). In 1979 the American National Standards Institute (ANSI) developed a universal standard for sharing documents electronically, known as ASC X12 – prior to this each company had its own standards.
ARPAnet developed by the US military
Electronic communication networks had in fact been developed before their use in business, when in the 1960s the US military created a system called ARPAnet. ARPAnet was invented so that vital communications could be transmitted in the event of a catastrophic event such as a nuclear strike. The original ARPAnet utilised huge computers and connected four US research universities, and in 1971 the Terminal Interface Processor (TIP) was developed so that users could connect to the ARPAnet from an individual computer terminal. In 1982 ARPAnet began using Transmisson Control Protocol and Internet Protocol (TCP/IP), which even today forms the networking basis of the internet.
By the early 1980s major research universities were leading the way in electronic communications. It was at these universities that the first emails were being sent, and individual users were also taking part in listservs and newsgroups. Networks such as BITNET and USENET were also being used to transmit documents.
Email, message boards and chat rooms became more widespread in the 80s via the networking service CompuServe. In the mid-80s CompuServe launched a service called the Electronic Mail, which allowed users to buy items directly from over 100 online merchants. This service, though not especially successful, was a pioneer in the world of eCommerce.
Further huge advances came in 1990 when Tim Berners-Lee developed what he called the ‘WorldWideWeb’ – which of course gave its name to the “www” in website addresses and a name we still use to this day whenever we refer to ‘the web’. Another event which paved the way for the development of eCommerce came in 1991, when the National Science Foundation made it legal for commercial businesses to operate over the internet.
The 1990s saw the introduction of the first widely distributed internet browser Mosiac in 1993, shortly followed by Netscape the year after. Netscape was particularly significant in the history of eCommerce because it incorporated a security feature called Secure Socket Layer (SSL), which encrypted electronic communications and allowed name, addresses and bank card details to be safely used online.
In the mid-90s the first third party services for processing online credit card payments were developed, with CyberCash and First Virtual being two of the most popular. Another company, Verisign, further boosted eCommerce security by developing digital certificates which verified the identity of online businesses and certified that their eCommerce servers were securely encrypted.
The first eCommerce giants
Amazon launched in 1995 when founder Jeff Bezos sent out the company’s first book. Within a month Amazon was selling books online to shoppers not only in 50 US states, but also in 45 countries around the world. The company set the standard for eCommerce websites by allowing visitors to search for books by keyword, author or subject, as well as browsing titles by category and even being presented with personalised recommendations. Amazon’s ‘one click’ payment system also made it easy for online shoppers to buy, and revolutionised eCommerce. The company went public in 1997 and has since become one of the biggest in the world and by the end of 2016 had a market value of over $350 billion.
eBay is another eCommerce success story. Beginning in 1995 as a simple website called AuctionWeb, by 1996 eBay was selling over $7 million worth of goods in a year. By 2007 it had sold over $50 billion worth of goods, and today is one of the world’s best known and biggest companies.
So there we have it – a brief history of electronic communications and eCommerce! If your business would like to explore the possibilities offered by eCommerce, contact WTS Technologies today for a free consultation and quote.