The history of eCommerce began in 1979 with CompuServe, the first dial-up provider. Initially, it digitized newspaper articles and later evolved into an information portal. Today, eCommerce is a core part of daily life, with online marketplaces offering everything from groceries to digital goods. This shift has changed consumption habits, making shopping faster and more affordable, while also increasing demand for services like influencer marketing. This article will explore eCommerce’s impact on business — past, present, and future — and highlight key considerations for navigating the online world.
Global reach and accessibility
The forerunner to modern eCommerce was Electronic Data Interchange (EDI) in the 1970s, which automated business transactions. Around the same time, banks began offering transactions via phone and computer, prototyping online payments. The internet’s arrival in the late 1990s accelerated eCommerce’s development.
PayPal’s creation as the first global payment system made online purchasing a daily habit by offering a secure alternative to cash. eCommerce has since transformed the economy, uniting online sales, banking, booking, and digital marketing. The most significant advantage for businesses is the ability to reach a global audience, unconstrained by geography.
24/7 accessibility and convenience
B2C eCommerce is incredibly convenient because it has made shopping more accessible than ever. Consumers can buy products from home 24/7 and have them delivered. The speed of one-click shopping has shifted customer expectations. A Salesforce survey found 73% of respondents expect companies to understand their needs. eCommerce offers a level of personalization that traditional retailers often struggle to match, forcing them to adapt.
Transformation of business models
eCommerce has also transformed traditional business models, especially B2C, by adding new elements:
- Multichannel retailing: Combining online and offline channels for a consistent experience with features like click-and-collect and Buy Online, Return In Store (BORIS).
- eCommerce technologies: The rise of eCommerce brought new technologies like CRM systems, SEO, cloud solutions, and AI. Retail marketing platforms help businesses manage these aspects.
- New customer service standards: In eCommerce, customer satisfaction depends on user-friendly design, secure payments, and fast delivery, with businesses relying heavily on analytics and feedback.
Innovation also includes social commerce (e.g., Facebook commerce), where users shop with friends, and D-commerce, which focuses on digital goods like e-books and music. These new models expand eCommerce’s boundaries and heighten the importance of brand trust.
Impact on business operations
eCommerce has altered business processes, particularly shipping. Unlike traditional retail with scheduled restocking, eCommerce businesses must manage the “last mile” of delivery, often shipping small batches directly to customers.
To ensure an efficient supply chain, eCommerce businesses use several methods:
- Order and inventory management systems: Software for automated fulfillment and product information management (PIM).
- Outsourcing: Using a third-party partner for logistics, warehousing, and supply chain management.
- Warehouse management systems: Implementing tracking with barcodes or RFID tags for real-time inventory data.
- Demand planning: Using just-in-time (JIT) stocking to minimize inventory.
- Enterprise resource planning (ERP): Software that organizes all business processes, including supply chain, in one system.
- SKU segmentation: Managing merchandise based on sales velocity using ABC analysis.
- Dropshipping: A model where the seller transfers orders to a manufacturer or wholesaler for direct shipment, allowing entrepreneurs to start businesses without managing a warehouse.
