Humans have been trading for as long as they have existed. What started as a simple barter of goods and services between two people quickly developed into systems with currency whereby value could be exchanged through the use of precious metals, usually gold or silver in the form of a coin. These have been recorded in most of history’s civilizations, including the Ancient Greeks and Romans.
While the currencies themselves have changed many times over thousands of years, how we used them altered very little. Shops developed from market stalls, and then began morphing into mega supermarkets and department stores we know today. Yet the premise remained the same. The shopkeeper displays their goods on shelves, and the customer agrees to take them away in exchange for some of their money. But the internet changed everything.
The Early Internet
The early internet was not intended for use by private businesses. It initially developed as a tool to allow American universities to share information, but quickly became widespread as consumers began to adopt Microsoft Windows PCs. Shortly afterward, existing retailers and new start-up businesses began to develop websites; some allowed their customers to purchase their products directly from the website, while others were just a placeholder or an online catalog.
The First E-Commerce Store
The first e-commerce website launched in 1994, although there is some debate as to which shop gets this title. Some sources claim NetMarket got there first, and others saying that it was the Internet Shopping Network. However, big names like Amazon launched shortly after this and have grown into household names.
The development of the internet helped to level the playing field for small businesses. They could now reach a global market without the massive overheads of a multi-national company. Microbusinesses trading in niche products that would be otherwise unprofitable in a brick and mortar store, quickly sprung up, either using their own websites or platforms like eBay and Amazon.
Many early websites had teething problems. Taking payments was difficult, trust in e-commerce was low, and logistics to handle the increased number of parcels being carried in the mail were not adapted for this new demand. One of the solutions that appeared, as a result, was an online payment company PayPal, which quickly became the dominant player in online payment processing. This also helped to overcome some of the trust issues people had with sending money to strangers in exchange for products they hadn’t yet seen.
The Mobile Revolution
Mobile technology such as smartphones and tablets, as well as fast mobile internet thanks to WiFi and 4G have made it possible to do almost anything online, from anywhere in the world. One of the first industries to embrace this technology was iGaming, with the launch of mobile poker apps. Shortly afterward, e-commerce also took advantage by allowing customers to purchase anything, from anywhere, at any time, making it easier for customers to spend more money more frequently.
Changing Legal Environment
As the way that people had bought and sold goods had not changed for millennia, the laws governing that had not changed either. New laws were needed to cope with the change in technology, providing consumers with protection against rogue traders and dangerous products.
For example, in the United Kingdom, the Distance Selling Regulations were drawn up to give consumers the right to return products they purchased, regardless of whether they were faulty or not. These were later added to the Consumer Protection Act 2015, which further expanded the rights for consumers as they bought products online.
Peer to Peer Selling
Although sites like eBay have allowed consumers to sell their unwanted products for years, the rise of social media has allowed new avenues for consumers to trade with each other. For example, Facebook Marketplace enables users to buy and sell, commission-free, with people in their local area. This often results in the sale of used cars and old furniture, but other items are also regularly sold through such platforms.
E-commerce has completely changed the face of the retail industry almost overnight. What hadn’t changed for thousands of years has been completely upended in just thirty, allowing products to be sold more cheaply, to broader markets, all over the world, all without the need to own or rent significant amounts of real estate.