The History of Ecommerce

Shahed Nasser
Medusa
Published in
11 min readMar 9, 2023

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Ecommerce has evolved a lot since its start. It hasn’t always been well-designed stores with extensive features and carefully-planned user experiences. A lot of what is fundamental and basic today was revolutionary when discovered at its time.

This article goes down the memory lane of ecommerce, uncovering some old-but-gold ecommerce websites, and highlighting the main difference from ecommerce today.

1979: Michael Aldrich and the First Attempt at Ecommerce

In 1979, Michael Aldrich invented online shopping through televisions. This was way before the inventions of the Internet and the World Wide Web (WWW). He invented it by connecting a modified domestic TV to a transaction processing computer through a domestic telephone line.

Michael Aldrich believed that Videotex was a revolutionary communication medium that was universally applicable and participative, and the first of its kind since the invention of the telephone.

Following his invention, two businesses used Michael’s invention: Gateshead SIS with Tesco and Bradford Centrepoint with Wm. Morrison. This allowed consumers to open their TV and choose groceries from a local supermarket. The order would then be sent through the phone line to a local Tesco, where the ordered items would be packaged and sent to the consumer.

1984: CompuServe’s Electronic Mall

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CompuServe was one of the first businesses getting close to an ecommerce experience. It was a popular networking service that provided users with emails, message boards, and more.

In 1984, CompuServe added a service called “Electronic Mall” that allowed users to buy items from over 100 online retailers through a simple CLI interface where customers could browse different vendors, product categories and even insert credit information for later purchases.

You can see a demo of it all here.

1992: Book Stacks Unlimited, the Amazon Predecessor

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Contrary to popular belief, Amazon was not the first online bookstore. Book Stacks Unlimited was created in 1992, three years before Amazon. It began as a dial-up bulletin board. They then launched the website Books.com in 1994, which was eventually acquired by Barnes & Noble.

Not only did Book Stacks Unlimited offer 500K titles, but they provided features such as editorial book recommendations, book summaries, RealAudio interviews with authors, book search, and more.

1994: NetMarket and the First Sale on the Internet

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In 1994, Dan Kohn created NetMarket, which would sell a variety of CDs and books. He then marked the first sale of a product over the internet using a credit card: a Ten Summoner’s Tale CD by Sting.

According to the New York Times, which covered the story back then, this was the first retail transaction on the Internet using a readily available version of powerful data encryption software designed to guarantee privacy. Dan Kohn said about the purchase that “even if the N.S.A. was listening in, they couldn’t get his credit card number.”

1994–1999: The Launch of Ecommerce Giants

1994: PizzaNet (PizzaHut)

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In 1994, PizzaHut created PizzaNet, their online ordering service. Not only did it allow customers to order from the menu, but it also allowed them to customize the pizza.

In the skepticism of how the website might be used, the local restaurant would always call the customer to verify the order to minimize the risk of pranksters.

1995: Amazon

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Amazon launched in 1995 as a book store. Although the design wasn’t too appealing, there were features that were advanced for its time: a virtual shopping cart, secure way of entering credit card details, an internal search engine, product reviews, and more.

In the very beginning, Amazon’s engineers used C to code a lot of the features of the website, and used Berkeley DB to store the website’s data.

1996: eBay

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eBay (initially Auction Web) was launched in 1996. It was one of its kind, being the first online auction website providing a person-to-person marketplace. Buyers would present their products, and customers bid on the items to eventually purchase it.

eBay was free of charge at the start. However, as their traffic hugely increased, eBay’s founders were informed that they needed to upgrade their hosting account. This led them to take commissions on bids to fund the website.

1997: Apple

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Steve Jobs returned to Apple in 1997. His first line-of-action was to improve Apple’s presence in the ecommerce world. Apple launched their new-and-improved ecommerce website at the end of 1997 aimed at improving customer experience.

1998–1999: Nike

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Nike created their first website in 1997. However, it was mainly focused on teaching their consumers more about Nike and their products, rather than selling these products online.

In 1998, the Nike website improved to provide consumers the ability to customize their own Nike shoes. It wasn’t until 1999 that Nike moved from editorial content to an online store.

2000–2005: Dot-Com Crash

In the 1990s, the Internet garnered heavy attention and adoption. Web-based startups gained a lot of funding, and all companies suddenly needed to “move to the internet”. Later followed what is now known as the Dot-Com Crash in March 2000 where the Nasdaq index slipped ~77% over less than three years.

The dot-com crash took down many ecommerce and internet-based companies that gained success during the 1990s. This affected even big companies like Amazon. Still, some companies like eBay thrived despite the headwinds.

SnowDevil and Shopify

In 2004, SnowDevil was launched, which ended up being the spark that ignited Shopify. Tobias Lütke and Scott Lake wanted to sell snowboards online, but couldn’t find a software that would help them do that.

They initially used a variety of tools and services such as Miva, OsCommerce, and Yahoo stores. However, they frequently ran into trouble when trying to bring their vision to life. According to Lütke they had a “great CSS-based layout done with all these new fanged ‘web standards’”. However, the lack of customization capability that Yahoo provided barely allowed him to change the background color of the top frame.

So, Lütke and Lake set out to create a solution that would not only solve their problem, but solve the problems of businesses across the globe. They built Shopify in 2007 and transformed SnowDevil to a Shopify demo store, bringing their vision to life.

Shopify now powers over 4.5 million websites worldwide.

Note on 2000s Designs

When looking back at some of the designs from the early 2000s, you’ll notice that there was a significant advancement from the HTML, almost only text and disarrayed images design that dominated that 1990s.

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Even though the design was still clunky and crammed, there was a clear usage of layouts and different colors. Ecommerce websites at the time also started using some elements that are now basics to ecommerce, such as a navigation menu and a sidebar for categories.

During that period, tech giants like Amazon and eBay continued to innovate with new features that are now core ecommerce features. Amazon added features like Search Inside the Book, allowing customers to search for words inside books. eBay also added a Live Chat feature to provide support for customers.

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2006–2010: Rise of Ecommerce Platforms

After the dot-com crash, ecommerce companies and stores steadily regained momentum, and new ecommerce platforms emerged.

In 2007, Magento was created by Varien, and it was later acquired by eBay. In the beginning, Varien were building their platform on osCommerce. However, they found it incapable of accommodating all the features and functionalities they had in mind. So, they decided to build a new open-source solution from scratch.

With the passing years, Magento grew to be one of the top open source ecommerce platforms at its time. In its first year, it was downloaded over 500K times. Magento’s popularity is due to the customizability capabilities it provided, as well as its open source nature. This allowed businesses to break away from proprietary solutions and take full ownership of their store.

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BigCommerce was launched in 2009, after its founders met in a programming online chat. BigCommerce initially wanted to provide a shopping-cart-only solution called Interspire. However, their consumers found it difficult to manually find, install, and update their software on a server, which lead to the change from Interspire to BigCommerce.

BigCommerce gained popularity among businesses that didn’t want the hassle of handling the technical parts of ecommerce, but still wanted to have the customizability options that allowed them to grow and scale. By 2011, BigCommerce was powering almost 10K stores.

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2010–2020: The Platform Puzzle

As the 2010s started, ecommerce saw a rapid uptake, and over the decade, global ecommerce sales grew 8-fold.

During this period, ecommerce saw a lot of shifts in user behavior as new platforms emerged, effectively reshaping how users interacted with brands online.

Design Changes

The 2010s show a big improvement in the design and functionalities that ecommerce stores provided. Many of the features that were carefully implemented in the 1990s and early 2000s became fundamentals that every ecommerce store had.

With more businesses moving towards the ecommerce landscape, they each needed to stand out through unique branding and design. Ecommerce platforms that started emerging in the late 2000s provided more customizable options for the storefront.

This also lead to newer technologies, concepts, and approaches rising that would reshape websites in general, including ecommerce storefronts. Concepts like Jamstack, coined by Netlify in 2015, and the launch of static-site generator frameworks like Gatsby or Next.js, allowed businesses to have more control over designing their storefront and provide a better user experience.

Mobile Commerce

The 2010s also marked the rise of mobile commerce. Ecommerce businesses started rolling out mobile apps that allowed their consumers to access the same web functionalities from their smartphones. This went through its own timeline of evolution, starting from a simple design and advancing to more sleek and user-experience tailored design.

This elevated the development of ecommerce stores from only catering to a website to multiple platforms. Developers needed to design and build APIs within their existing systems to cater for mobile development.

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Social Commerce

In the mid 2010s, social commerce started emerging. In 2015, Pinterest rolled out its first shopping capabilities through Buyable Pins. Users were able to purchase products from Pinterest. Instagram also announced Instagram Shop in 2018 which allows users to browse and purchase products from businesses without leaving Instagram.

With the introduction of social commerce, businesses had now another platform to attract new customers. Businesses invested in social marketing strategies to ensure potential customers can discover their products through these platforms and, in turn, convert to purchasing customers.

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Stripe and the Emergence of New Ecommerce Infrastructure

While ecommerce platforms evolved, a new type of infrastructure started to emerge to further improve the commerce experience. From analytics and backend-focused tools, to new solutions solving complicated issues related to areas such as payment and distribution.

The brothers Patrick and John Collison founded one of the most notable infrastructure solutions in this new commerce era in 2010. Through their side projects, they found it difficult to accept payment online and wanted to fix that. So, they developed a quick solution in 2 weeks and were able to process their first transaction. After making several iterations over the next few months, they launched Stripe under the name dev/payments.

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As indicated by its initial name, Stripe was aimed towards developers at first. The founders then realized that Stripe solves problems the entire internet faced. According to Patrick, existing solutions like PayPal and Google Checkout were “these confusing things,” and they wanted to solve what these existing solutions couldn’t.

Stripe reshaped the payment landscape, making it easy for anyone to start selling online, while providing a payment infrastructure that facilitated building custom setups. A lot of startups afterward took it upon themselves to cover other areas of the ecommerce infrastructure with similar developer-first approaches.

2020s and Ecommerce Modularization

The ecommerce landscape has evolved to include not only web as a sales channel, but also mobile apps, social apps, and more. This spawned the need for ecommerce solutions that provide omnichannel support, frontend flexibility, and an extensive feature offering.

To accommodate those needs, the 2020s saw new and existing ecommerce solutions start to adopt headless and composable architectures. As the demands for ecommerce heavily evolved, the previous methods used to create ecommerce applications, which were initially monolithic and tightly coupled, are now limiting. Developers now seek modular solutions that are less rigid and open to customizations. This would remove the restrictions on their businesses and the need for hacky workarounds.

The rise of point solutions that focus on specific domains within ecommerce has enabled this move towards modular solutions. Developers can combine these services and create a modern product stack that meets businesses’ exact requirements without compromising scalability.

As ecommerce, and the technology sector as a whole, is a rapidly growing landscape, new trends will continue to rise and fall. However, one thing remains consistent throughout the years: businesses will continue to strive to exceed their current potential. To ensure they can innovate and build unique experiences, ecommerce solutions must adopt a modular approach ensuring scalability and flexibility.

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