Markets & Investing
Evolution of Ecommerce Through the Years
17 Oct 2018
Because change often happens incrementally, one must sometimes step back and look at the bigger picture to truly understand the scope and implications of long-term change. This holds particularly true for ecommerce—an industry that has undergone extensive change since its emergence into the mainstream around the mid 1990s.
It’s useful for today’s online retailers to understand the evolution of ecommerce through the years as many of significant changes have occurred in response to shifting customer expectations. Understanding what customers want and need from an ecommerce experience never goes out of style; in fact, it’s the only way to stay competitive in an ever-shifting market.
Ecommerce Then: More Convenient, But Misunderstood
Ecommerce seems so commonplace to most adults nowadays. In fact, it’s relatively rare to encounter someone who’s never shopped online. However when the concept emerged in 1994, it was not readily accepted. Money quotes a marketing professor at Vanderbilt University as saying most consumers “don’t know where to go” when they initially tried to shop online because “like a real mall, a cyberspace mall has lots of stores, and finding a particular product can be hard unless a user knows which stores carry what.”
Furthermore, customization in ecommerce was fairly limited in the early days—especially compared to the options available now. Transactions tended to be more straightforward and less rooted in personalization.
Ecommerce Now: Personalized, AI-Driven, Mobile-First
The overall ecommerce definition hasn’t changed over the last few decades. The underlying principle still involves exchanging money and information over the internet to facilitate purchases. But the nature of these transactions has changed to reflect advances in technology and shifts in consumer demand.
People now appreciate—and expect—personalized shopping experiences. Providing recommendations to shoppers based on their purchase history and past behavior is a win-win. Retailers benefit because personalized recommendations tend to boost conversion rates. Consumers benefit because it’s almost like ecommerce websites can “read their minds” now, saving them time and hassle during the browsing process. The ability to make on-target recommendations on a per-visitor basis stems from innovation in artificial intelligence (AI) and machine learning technology.
Another huge shift in ecommerce has been the widespread adoption of mobile devices, namely smartphones. Shopping online used to be a desktop-only activity. Then, as phones became more advanced, people used them to browse websites. However, the user experience was not always conducive to completing transactions online, especially using a mobile browser. But now, with more stores prioritizing user-friendliness across devices and offering dedicated apps, people are making more purchases directly from mobile devices. Nearly one-third (34.5 percent) of U.S. ecommerce sales occurred on a mobile device in 2017, and this number is projected to be closer to 50 percent by 2020.
Ecommerce in the Future: Social and Augmented Reality
Future ecommerce may take place outside of actual retailer websites. People can already buy products without having to leave their favorite social media feeds, but this effect will expand in the future, as platforms better integrate with various social apps. This will eliminate the divide between social media platforms and online storefronts—as people continue to favor convenience, especially while shopping on mobile devices.
Furthermore, many experts believe ecommerce will utilize augmented reality (AR) and virtual reality (VR) to showcase products. Forward-thinking brands are currently using videos and AR tools to help consumers scope out products before purchasing. Incorporating AR will allow customers an “in-store” experience while browsing products remotely.
The evolution of ecommerce through the years has been impressive, and we’re on the precipice of an even more personalized, technology-driven era.
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