It was only a few short years ago that “people in the know” were telling anyone who would listen that nobody would ever buy products on the Internet. And they had good reason to think so. The Internet was an untested medium. The security involved was poorly – if at all – understood. People thought of the web as nothing more than chat rooms and email. The Internet might end up being a B2B e-commerce destination, but for consumers? Hardly.
But things changed. Today, e-commerce is a more than $1 trillion a year industry, with millions buying everything from pineapples to paintball guns online. How did we get here?
It’s been a long road since the very first e-commerce transaction, back in the early 1970s. But e-commerce as a whole really didn’t take off until the 1990s.
The growth of the World Wide Web, spurred by online services like America Online and Prodigy, exposed most consumers to the idea of spending money online for the first time. 1994-1995 saw the birth of both Amazon.com and eBay, which today top $90 billion in yearly revenue. Their initial growth came during a time when investors were pouring money into tech startups. This exuberance of the late 90s led to IPOs for a number of companies that had never made a profit, and in many cases, had never even created a single product. In some cases, like Google, Yahoo! and others, they were able to ride out the dot-com crash of the late 90s, a bubble that shuttered more than half of all dot-coms and saw more than $5 trillion disappear from the stock market in a matter of months.
The growth of companies like Amazon and eBay following the dot-com bubble is indicative of the recent explosion of e-commerce across the entire web. Amazon’s growth has been remarkable, but even they were recently challenged as the #1 e-commerce retailer in the world by Alibaba, a Chinese company that in 2013 handled more transactions than both Amazon and eBay combined.
This explosion of e-commerce has also inspired a number of new business models – one that’s founded on convenience and fulfilling on-demand desires. Groupon, LivingSocial and a gamut of food delivery sites have enabled local businesses to significantly extend their outreach past their website. Sites like Etsy have enabled anyone to be their own small business. And ridesharing companies Lyft and Uber have turned the existing transportation industry on its head as taxi companies scramble to compete.
E-commerce is also expanding into the social media realm as companies continue to try to reach customers where they are congregating socially. Just a few days ago, Amazon announced a partnership with Twitter to create “#AmazonCart,” a tool that allows Twitter users to put items into their Amazon cart without ever leaving the site. And last year, Starbucks took to Twitter for its “Tweet-a-Coffee” program which lets you buy a $5 gift card to Starbucks for a friend via Twitter.
In later blog posts, we’ll expand on the growth of social media and e-commerce, why social networks like Twitter and Facebook are the future of online selling, and how we created Shoppost as a way to bridge these two worlds in a way that has never been done before.