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Online shopping: A brief history of commerce on the Internet

Last Edit: 20/05/18

Online shopping is the activity of purchasing goods and services upon the Internet -- usually with the aid of credit/debit card payment systems. The Internet predates the World Wide Web (a service found on the Internet from 1991) and so does online shopping -- however, online shopping, pre-1991, was incredible minor in comparison to today's volume of online commerce. Online shopping is sometimes referred to as e-commerce: which means 'electronic commerce'. An English inventor is generally credited as being the inventor of online shopping: In 1980, Michael Aldrich created the 'Teleputer', and he used this system to interact with Internet protocols to provide a Business-to-Business (B2B) shopping system. The first business to use Aldrich's B2B system was Thomson Holidays in 1981. By 1984, Aldrich had created the first Business-to-Consumer (B2C) shopping system -- for Tesco - and Jane Snowball is credited as being the first ever online shopper. Aldrich's B2C shopping system was available in Gateshead, England -- which is located in the North East of England. In 1986, CompuServe -- one of the first providers of Internet access to American consumers -- created an electronic mall service, which operated in 30 cities in the US.

HTTPS used by shopping sites like Amazon to secure payment details.
(Pictured: HTTPS, an extension of HTTP, that encrypts data via either Transport Layer Security (TLS), or Secure Sockets Layer (SSL).

While online shopping existed prior to the World Wide Web, Internet usage was minuscule, and e-commerce a minor service used by this minuscule user base. The World Wide Web was the service that popularised the Internet, launched in 1991, it has continued to be the most popular service used on the Internet since the mid 1990s. Initially, the first problem that businesses had with setting up an online shopping website was taking payment and providing product delivery. Online shopping via the World Wide Web was largely made possible by the Netscape Communications company: Who created HTTPS, an extension of the HTTP (the protocol invented by Tim Berners-Lee for the Web), and encrypts (using TLS or SSL) data that is sent between a web client (browser) and a web server (website). Netscape implemented HTTPS in the Netscape Navigator web browser in 1994. Two of the Internet's biggest e-commerce websites were launched a year later: Amazon.com and eBay.com. Some other early e-commerce websites include: IndiaMART (1995); ECPlaza (1996); DoubleClick (1997); HomeGrocer (1997); PayPal (1998); Zappos (1999), and Alibaba (1999). The payment/order handling process of shopping websites has always been referred to as the 'shopping cart' of the website. Since the mid-1990s, there has been a wide range of shopping cart systems -- utilising a range of payment authorisers -- the most popular of which is probably PayPal and Shopify. Some other well known shopping cart systems include: Big Commerce, Worldpay, 3dcart, Ashop, Cart66, Bookly, CS-Cart, Magento, Miiduu, Paycart, Shopp, UberCart, and Zen Cart.

It has probably not escaped your notice that the early adopters of the World Wide Web -- as a 'vehicle' to conduct commerce -- were startup companies. The vast majority of established bricks and mortar retailers were slow on the uptake, and only started to release online shopping services when broadband was released in the 2000s -- when it became obvious that the Internet was not a fad and online shopping would become a serious competitor to bricks and mortar shopping. Throughout the 2000s online shopping saw an exponential year-on-year growth, and it helped to propel two of its earliest adopters (Amazon and Ebay) into unrivaled gargantuan global companies; Jeff Bezos, the founder of Amazon, is currently rated as the World's richest individual. While its obvious who the early dotcom winners are, there are plenty of companies who saw the potential of online shopping -- they launched websites before the year 2000 -- but their endeavours resulted in a large loss for their investors: Boo.com, Webvan.com, Razorfish.com, Broadcast.com, Kozmo.com, and Pets.com.

HMV closing down sale
(Pictured: The impact of online shopping on traditional shops; HMV closing down sale in 2013)

The impact online shopping has had upon bricks and mortar shops should not be understated: Many popular UK chainstores can directly link their demise to the launch of e-commerce -- Blockbuster, Woolworths, HMV, Maplin, and Toys R Us -- and the impact upon 'mom and pop' family run stores, while harder to ascertain, is probably just as severe.

While nearly all online shopping is transacted on the traditional World Wide Web -- referred to as the clearweb because its accessible to search engines and is generally unencrypted -- a limited, but noted exception, is online shopping transacted on the deepweb and darkweb. Michael Bergman coined the term deepweb, and it refers to parts of the World Wide Web that are not accessible to search engines: A paywall for newspapers and magazines is one example of commercial content that is only available on the deepweb. The darkweb is securely hidden from the clearweb through the use of software that uses encryption, and is done so intentionally. The primary purpose of the darkweb (also referred to as the darknet) is to maintain anonymity, and the Tor network is one example of a darkweb software platform -- Tor encrypts data through three relays. Silk Road is generally credited as one of the first shopping marketplaces launched on the darkweb: launched in 2011, it principally allowed users to sell and buy illegal drugs.

In conclusion, the potential growth of online shopping does not appear to be stopping -- Alibaba doubled its single day sales record in 2016 and Amazon plan on using drones to deliver goods -- but it has come at a cost, with many high streets in the UK having empty shops. While online shopping has been lauded for its conveniences and price saving -- many bricks and mortar retailers have complained of shoppers checking products instore and then buying online at a discount -- it is not without its critics: Amazon workers rights is a case in point, with an Independent.co.uk article (2017) titled "Amazon workers working 55-hour weeks and so exhausted by targets they fall asleep standing up"; and a Which? article (2018) titled "Online shopping scams cost Brits £58m a year". While scams and workers rights will probably have little impact on people's use of online shops, a long-term issue could be the dominance of websites like Amazon -- who are currently planning to offer grocery shopping in the UK -- with Tim Harford of the Financial Times stating (2018) "Yet for all this, I am deeply uneasy about Amazon’s apparently unassailable position in online retail. Those advantages were earned, but they can also be abused."

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