Barely a few decades old, e-commerce has changed and impacted our lives to such an extent that a world without it is simply inconceivable. Everything is available and purchasable online, including groceries, furniture, clothing, jewelry, electronics, and books.

But how and where did e-commerce begin anyway, and what does the future look like? Here's everything that you need to know.

Defining E-Commerce

E-commerce has evolved at a mind-boggling rate and will continue to do so due to consumers' wants and needs.  Over the last decade, online marketplaces have grown immensely, and so have services and products offered online. It may not be very obvious, yet things that are a crucial part of running a business, like web development, advertising, and credit-card processing, also come under the category of e-commerce.

E-commerce isn't just delivering products to a customer in a B2C manner; it's also a B2B thing where everything that is bought or sold online, whether products or services, over an electronic medium.

And, e-commerce isn't just local; it's a global phenomenon. It also involves selling products and services across borders to non-native markets using online marketing and sales. Data suggests that there has been over a 27.6 percent increase in global e-commerce sales recently.

E-commerce is so ingrained in our world that the market is expected to total $4.89 trillion in 2021 alone, and it is estimated to grow further, reaching an increase of almost 21.8% by 2024.

The History of E-Commerce

The Technicalities That Led to Ecommerce

E-commerce didn't come out of anywhere; since the 1960s, companies have been using computer networks to transfer data and conduct business online. This form of e-commerce is so different from what we know that we probably wouldn't have recognized it.

In 1986, ARPA (Advanced Research Projects Agency) commissioned the world's first router and, within a year, came up with ARPANET—a network created to ensure communication would remain intact in the event of a catastrophe like a nuclear attack.

Three years later, researchers had developed a way to use ARPANET using only a computer terminal (Terminal Interface Processor). This led to the creation of TCP/IP; a computer networking mechanism used even today.

The development of TCP/IP made it possible for the internet to transition out of military bases and universities and into offices. Companies started to share important documents using EDI, another digital technology that made it possible to transfer data from computer to computer without any human involvement.

A whole decade later, ANSI, the American National Standards Institute, stepped in and introduced a particular standard that was to be used for sharing business documents from then one, called  ASC X12. This is what led to the origin of e-commerce and the Internet Age.

The Origins of Ecommerce

Michal Aldrich, an English inventor, introduced the first concept of Ecommerce in 1979 by connecting television and telephone lines. A little background: According to the story, Aldrich came up with the idea while taking a walk with his wife to the market — an inconvenience, he'd think. Wouldn't it be more feasible and easier if one could just use the television to order what you needed?

This thought led to an invention; he made a system that advertised products and services on television and called it "teleshopping". All you had to do was call a processing center and place an order.

And, E-commerce was born, just like that.

Throughout this time, the internet continued to expand at a fast rate. It adopted new security measures like the SSL, making it more comfortable for people to use.

The French innovators, in 1982, came up with Minitel, a service dating before the invention of the World Wide Web. The free service was for telephone subscribers and used telephones lines and a Videotex terminal to connect millions of people. By 1999, this teleshopping giant connected almost 25 million people.

However, that was the end of Minitel — soon, the World Wide Web caught up and eclipsed the once loved Minitel.

The Arrival of the First Ecommerce Stores

The first eCommerce company was called Boston Computer Exchange and was launched in 1982. It was an online store that catered to people who wanted to sell their used computers.

Then came Books Stacks Unlimited, a virtual bookstore that started two years before the company which would change the world of Ecommerce forever—Amazon. And about Book Stacks Unlimited? It was acquired by Barnes & Noble.

The Increase in Ecommerce

Over the years, the internet has become more secure and easy to use. On August 6th,1991, Barnes Lee came up with the first-ever website that made World Wide Web a publicly available service, which then paved the way for online shopping.

During this time, book stores couldn't carry more than 200,000 books but came along Amazon, removing these limitations. It could carry countless titles, from the best-selling books to one's least known.

From then, Amazon expanded into a full-fledged e-commerce store that we know today that sells every product imaginable. So, the world followed. In 1995, eBay emerged as a successful auction website. In 1998, PayPal came in as a global e-commerce company that could process payments for different online vendors and users in various currencies.

The 2000s saw the Dotcom bust and a rise in online advertising. NASDAQ fell to almost 75 percent and took away all the gains since the internet started. Most online technologies and stories declared bankruptcy.

However, in 2005, e-commerce made a comeback. Etsy came up as an online marketplace where people could create virtual shops and sell their items. Amazon launched Amazon Prime, which offered two-day shipping within the US, thereby forcing merchants to reduce delivery time and charges. During this time, other large e-commerce stores started their life, including Shopify, Magneto, and BigCommerce.

The new decade, 2010, saw e-commerce moving up steadily. In 2012, e-commerce took on the food industry. Although the initiative had failed during the dot-com bust, food shopping finally found its place in the industry. Groceries and food could be ordered online, from the comfort of one's home.

Ecommerce in the Time of COVID-19

The pandemic slowed everything down, major businesses went remote, and economic activity lowered — however, e-commerce saw a huge digital transformation. As lockdowns spread like wildfire around the world, businesses and consumers went digital. They started purchasing more goods and services online than ever before. This raised e-commerce's global trade from 14% in 2019 to about 17% in 2020. 

This digitalization of everything will likely have a lasting impact on our society and the economy; the event proved how well our online platforms can deliver and how easy it is to shop from the comfort of one's home.

According to a post-pandemic report conducted by Adobe, the growth in online grocery shopping has persisted even as the world is returning to normal. It also highlights that buying online and picking up in-store is here to stay as well.

Here are some e-commerce trends that have been noticed after the pandemic:

New Online Categories to Shop From

Yes, grocery e-commerce hit an all-time high during the pandemic, but that's not the only category that saw a surge in shopping. Home goods, fitness products, electrical accessories, bathroom and kitchen accessories, furnishings, everything saw a boom. This sector saw an increase of a good 5.7 percent, hinting that this growth is expected to continue and reach 14-18 percent in the next five years.

Lower Brand Loyalty

Ecommerce broke down brand loyalty. According to reports by eMarketer, mid-2021 saw more than eighty percent of consumers shift their usual brands due to lower prices and out-of-stock products.

Contactless Payment

Of course, online transactions can't replace all in-person purchases. Still, the pandemic did see a huge development in the use of contactless payment options where people made mobile payments.

Pandemic-friendly Shopping

Many shoppers have turned to e-commerce and started to opt for products from local or physical stores. This has become possible because of third-party delivery providers like Uber, which also started Uber Eats, a platform to deliver groceries and food. It accelerated delivery services and food delivery, where pick up from brick-and-mortar stores became popular without the need to go out or contact them.

Social Media Shopping Trends

Many social media platforms took advantage of e-commerce as well. They've added more commerce features, enabling their customers to browse and purchase products without exiting their platform. This has been possible because their platforms are closely in touch with e-commerce platforms, making the entire ordeal easy.

The growth is expected to rise, with the majority of Millenials and Gen Z thinking social media platforms are a better way to find new products than searching them online.

The Unstoppable Ecommerce: An Insight into the Future

The future of e-commerce is bright, experimental, smooth, and global. Although we can't know what the future holds, certain trends and data analysis do a wonderful job of telling us what we should expect from the e-commerce industry in the next few years.

Before delving into the trends, it's important to understand the driving factors contributing to the pace of e-commerce.

Millennials and Gen Z Hold the Purchasing Power

Millennials are reportedly spending over $1 trillion spent annually in the United States. Alarming, but true. Following right behind, Gen Z, coupled with their hyper-individualism, is going side by side in the spending trends, both of them shaping the future of e-commerce in a way that wasn't imagined before.

Add into it the changes that the e-commerce world went through as a result of COVID-19, and we have an industry that is booming in ways no one expected before.

Here are some future trends that e-commerce is likely to adopt:

Growth of Global Ecommerce

The global e-commerce market has been rising quite steadily over the past five years, and the growth is expected to continue. Not to mention how much the pandemic has geared people toward adopting e-commerce, at least for essential items. This means a bigger and better opportunity for cross-border sales, which wasn't that viable before the pandemic.

Automation Taking Over

Tech is everywhere, and we know automated things make fewer mistakes than humans. In the context of e-commerce trends, the most talked-about trend that will impact the market is the use of machine learning and robotics.  This will ensure a better-optimized strategy, plans, and processes that'll make shipping across borders or even locally an easier task.

Plus, it will also lead to greater personalization, helping consumers get a better store experience than before.

It's already being used in websites that recommend you similar items to what you've purchased before — they're analyzing your purchase history to make smarter guesses.

Voice Technology and Ecommerce

According to a survey done in January 2019, more than 45 percent of millennials used voice tech to order something online (using Google Home or Alexa). This shows that people are comfortable with voice technologies, and so the future will consider that.

All you'll have to do is (which Amazon is already doing) tell your AI-powered voice assistant what you want to order, and they'd remember your choice of product and brand and order it for you.

The aim is an IoT device that senses when you're running low on an item that you've already subscribed to and orders it for you before you have to worry about it. Who wouldn't want an automatically updated inventory management for the fridge?

The Necessity of Customer Experience

As the pandemic proved, the customers are the future. Brands and e-commerce stores will have to work harder to provide insightful and compelling online shopping experiences that sync with their customer's desires. Now, whether that's through augmented reality, or something else, remains to be seen.

About AD Build

Abu Dhabi's largest building materials online shopping mart, AD Build, was established in 2012. Since then, the online store has become a leading one-stop shop that houses a variety of home accessories in the UAE under the categories of Lighting, Ceramic, Wallpapers, Interior Décor, Home, office, and garden supplies.

Buy every household product, from fire alarm system, Haier semi-automatic washing machine, Kenwood microwave with grill, garden lights, or other electrical appliances to ceramic, wooden, and parquet flooring, chandelier lights, garden lights, and more, all under one roof.