When the lockdowns began, you’re probably one of the people who added several items to your e-commerce cart and checked out. Like many others, you found solace in online shopping, a shred of normalcy that the pandemic thankfully didn’t take away.
But before the virus have spread, how often were you shopping online? Did you ever consider logging in to Amazon first before going to the grocery store? Or order your favorite foundation at the Sephora website instead of driving to the mall?
Perhaps yes, but online shopping wasn’t ingrained in most people’s daily lives before COVID-19. Yet today, countless consumers are automatically at the edge of their seats during payday, awaiting sales and other special e-commerce promos.
You’re probably wondering what led to e-commerce’s massive success, and what will happen to it once we overcome the pandemic. So here’s a brief overview of the origins of e-commerce, and where it’s possibly headed in 2021:
The Humble Beginnings of Ecommerce
Before the dawn of social media and e-commerce websites, shopping channels on the TV were the closest to online shopping. One of the earliest electronic shopping occurred in 1984, in Gateshead, England. A 72-year-old grandmother named Jane Snowball used her TV’s remote control to place an order of eggs, margarine, and cornflakes. Such was made possible by “Videotex”, a system developed by Michael Aldrich, in which the television was used as a computer terminal so that the screen would conjure up a shopping list. Snowball used it, and her orders were phoned into her local Tesco. Shortly after, she received her goods at her doorstep.
The Videotex system was originally designed as a service for the elderly and disadvantaged, according to Jonathan Reynolds, associate professor in retail marketing and deputy dean of Oxford University’s Saïd Business School. Then ten years later, in 1994, another instance of online shopping occurred, but this time it was via an online marketplace called “NetMarket.” Set up by then 21-year-old Daniel M Kohn, NetMarket was dubbed the “new venture that is the equivalent of a shopping mall in cyberspace”, and was marked as the first digitally secure transaction.
From then on, big corporations started exploring e-commerce, including Pizza Hut, who launched the “PizzaNet” portal in 1994. It was a website that only asked for a customer’s phone number and address.
But the biggest breakthrough was the launching of Amazon, which also took place in 1994. The following year, eBay emerged, then Japan’s Rakuten two years later. In 1999, China’s Alibaba was introduced.
The Peak of Ecommerce
E-commerce, as we know it today, could’ve started in 2017. By the end of 2016, Americans were “shopping online as often as they take out the trash.” According to the Pew Research Center, 8 in 10 Americans were purchasing something online, a significant increase compared to the 22% who shopped online back in 2000. More consumers owning smartphones catalyzed this culture of online shopping, as smartphone penetration reached 80% worldwide in 2017.
As of 2019, e-commerce accounted for 16% of sales in the U.S. But in the first quarter of 2020, before the pandemic hit, that number rose dramatically; between March 2020 and April 2020, e-commerce sales spiked 49%, with online grocery shopping experiencing a 110% boost in sales.
What Made Ecommerce So Successful?
Aside from the convenience it provides, e-commerce also continuously improves its technology. There is no longer an excuse for e-commerce sites that don’t work. Modes of payment have diversified, with cash on delivery, remittance, and bank deposit options, as opposed to just credit cards, which many customers might find risky.
Modes of shipping have been streamlined as well. Ecommerce companies started utilizing shipping API and other software that will cut their costs without sacrificing timeliness. They also regularly optimize their websites, ensuring user-friendliness and data security.
Ecommerce in 2021
Modern Retail predicted 9 trends for e-commerce in 2021. They’ve seen promising growth in premium private label brands, as customers will turn to them for superior products and better shopping experiences. Offline e-commerce may also rise, which Amazon might’ve already seen, as proven by their chain of physical convenience stores. Thus, we can expect more e-commerce brands to set up their pop-up stores next year.
Shoppable TV, a mobile app that will enable consumers to purchase what they see on their TV screens, may also emerge. Artificial Intelligence, which is already widely used in e-commerce, will continue to develop, as well as the popularity of second-hand goods (following consumers’ increasing interest in sustainability). Peer-to-peer and rental platforms may also flourish, with many retailers expanding into rental commerce next year.
Ecommerce logistics will further improve, thanks to autonomous deliveries, smart sensors, blockchain tracking, and other technologies that speed up delivery and increase cost savings.
Overall, we can expect great things from e-commerce in 2021. We may be able to customize all our orders, and completely rely on smart home assistants to do our shopping for us. At this rate, nothing can stop e-commerce, not even a year-long viral disease.