E-commerce, a phenomenon that we are all too well familiar with. E-commerce has been at the forefront of retail sales ever since Web 2.0 was introduced. According to eMarketer the global spending in ecommerce retail sales will exceed $7 trillion by 2025.
Why Is E-commerce Important?
E-Commerce is the practice of selling goods (products) or services online, either through your own website or through an ecommerce platform. Brands and businesses understand the growing importance of ecommerce and strive for a strong online presence to take advantage of it. Having a strong digital presence is an indicator of a potentially successful ecommerce business. With the rapid digitalization of our lives, users now prefer to shop online from the comfort of their homes. This provides an unprecedented opportunity to businesses not just here in the US but worldwide to reach their target market.
Ecommerce has also made it easier for entrepreneurs to start their own business without even worrying about having a physical storefront, or a warehouse. Amazon, Ebay, and Etsy are all successful ecommerce platforms that allow businesses and individuals to sell their products. Your products don’t even have to be physical, you can also sell digital products such as a short course or a high quality printable coloring book. However, there is a downside as well. Since anyone can sell their products online using these platforms, the competition has become fierce.So, if you want to run a successful ecommerce business you have to come up with a product that is creative or the best at what it is made for.
Seems easy right? But it isn’t as simple as coming up with a product and opening an online store on any of the platforms mentioned above. You need to have a proper understanding of how ecommerce works. Now you may be wondering, so how does it work? To better understand ecommerce you have to look at its past, present, and the future. And that is exactly what this blog post is about. So, get ready to take notes, and read on to better understand the world of ecommerce.
Brief History of E-commerce
Online shopping aka ecommerce has been a part of many of our lives for as long as we can remember. But do you know when it started? It all began in 1969 when Compuserve was founded. Compuserve was the first major commercially available online information service that provided access to the internet, email, instant messaging, and an integrated contact list. This laid the foundation for Michael Aldrich who invented online shopping in 1979. Soon after in 1982, the world’s first ecommerce company the Boston Computer Exchange (BCE) was launched. The BCE dominated the electronic trading of used computers in the US in the 80s. A decade after the BCE was founded, Book Stacks Unlimited was launched as the very first online book marketplace in 1992.
A couple of years later in 1994, a web browser (Netscape Navigator) was launched. The same year Jeff Bezos founded Amazon.com, which initially started as an online bookstore but quickly expanded its product categories to become the global e-commerce giant. Looking at the global dominance of Amazon as a digital marketplace, PayPal originally known as Confinity was launched in 1998. The main focus in its early days was on digital payments for consumers and businesses. Then in 1999 Alibaba was launched, which has now become the largest online B2B trade platform. After this started the digital age which we are all a part of.
The future of e-commerce: AI, AR, and VR technologies transforming online shopping experiences
The Present of E-commerce
The digital age as most of us already know began with the start of this millennium. Google Adwords has been instrumental in e-commerce for almost a quarter of a century now. But do you know when it was launched? It was launched at the start of this millennium in the year 2000. Then came Shopify in 2004 and it boosted the already growing e-commerce market. Shopify allowed businesses and individuals to open their own online stores giving them more control over their digital marketing strategies. This led to gaining consumers from places other than the e-commerce platforms, such as through search engine marketing. Search engine marketing allows businesses to place ads on different websites through search engines.
The Social Influence
Social media platforms like the Big 3, Facebook, Instagram, and YouTube have had a massive influence on e-commerce since they were launched. Want to hear an interesting fact? Facebook, Instagram, and YouTube have a collective user count of 7.52 billion users. For comparison, the global population as of 2024 can be rounded off to 8.02 billion. So, the next time you hear someone saying that social media doesn’t matter in a brand’s success, show them these stats. Coming back to the topic, let’s look at how the Big 3 of social media has impacted the E-commerce industry.
Launched in 2004, facebook is the number one social media platform by the number of users. Facebook has been instrumental in helping businesses connect with their audience and drive sustainable growth. Facebook allied businesses to create pages to keep their audiences engaged and feel more connected which is instrumental for a businesses success. Facebook also presented an opportunity to businesses to expand worldwide by connecting with audiences from all over the world.
YouTube
YouTube is the second largest social media platform in the world by the number of users. It was launched in 2005 and quickly rose to fame. YouTube was instrumental for e-commerce businesses as it added another layer of depth in their digital marketing strategies, which was video advertising.
If anyone asks me which social media platform has had the biggest impact on e-commerce, I would say Instagram. It was launched in 2010, but the amazing thing about it was the visual creative freedom it gave to brands, businesses, and individuals to present their products in an aesthetically pleasing manner.
What is the first thing that attracts us towards most products? It is how they look, and Instagram offered that to its consumers. Another reason it has had a huge impact on the e-commerce industry is the introduction of shoppable posts and stories.
These social media platforms gave rise to influencers, and in turn, influencer marketing, a brand new marketing strategy never seen before, was born. Influence marketing has now become one of the most commonly used strategies for e-commerce businesses to drive sustainable growth. With continuous innovations in the digital world, the future of e-commerce will see a lot of new venues to generate sales and grow even further.
The Future of E-commerce
The launch of Chat GPT by Open AI in the year 2022 sent the whole world into obsession with AI. Naturally, e-commerce shopping experiences have already started to be influenced by AI. AI chatbots have made a huge impact on enhancing user experiences which directly leads to a boost in sales. Furthermore, AI is also being used in the form of recommendation systems. These systems use AI to track user behavior and understand user preferences. This data is then processed, fed to the algorithm, and then used to train the system to recommend products or services based on metrics such as clicks, conversion rates, and user feedback.
AR and VR technologies also have a potential to leave a huge impact on the e-commerce industry. These technologies allow users to be in a 3D environment where they can see things as if they were present in front of them. This technology can give rise to virtual stores that users can visit using VR, select items they like, and then checkout using google pay, apple pay or any other method they prefer.
So, if you are looking to start an e-commerce business or are already doing it, keeping the future trends such as the use of AI and AR and VR technologies to enhance user experiences is crucial for you. Incorporating these technologies will give you a competitive advantage over your competition. This will allow you to create a name for yourself by the time others begin incorporating these technologies.
Conclusion
E-commerce is a vital part of our lives now, and no one can challenge that. The industry has become overly saturated, and it has become increasingly difficult for new players to step in. However, by knowing what e-commerce is and how it works, you can gain the knowledge required to be successful in this field. But where to begin? Do not let that thought hold you down. You can start by learning about the history, the present, and the future of e-commerce. How can you do that? Simple, by exploring this post.
Remember, exploring this post is only the first step in your e-commerce journey, there are many things that you might want to learn before actually starting your e-commerce business. But, you know what they say. It is always the first step that is hard, and you’ve already taken that. So, keep exploring and let nothing stop you.