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The Ever-Changing Face of E-Commerce: 1995-2020

By James Gagliardi E-Commerce Times ECT News Network
Dec 12, 2019 10:41 AM PT
the next chapter in the e-commerce revolution will be about customer experience

If anything is certain, it's that e-commerce doesn't look the same today as it did in 1995. A company called "eBay" burst onto the scene that year, and Jeff Bezos shipped Amazon's first book order. That unleashed a flood of online shopping, and businesses and consumers never looked back.

In the past two and a half decades, e-commerce revolutionized industries such as retail and supply chain. Americans spent US$154.5 billion online in the third quarter of 2019, according to a U.S. Census estimate. E-commerce has gone from being a fledgling newcomer to an 800-pound gorilla, challenging the traditional in-store retail model as we know it.

Advances in just the past decade, for both tech hardware and the Internet, have had a direct correlation with the rise of e-commerce. Shoppers have come to expect they can make purchases from their homes, from their smartphones, and through their favorite apps.

The ease of online shopping is pushing traditional brick-and-mortar stores to adjust, with many now folding online shopping into their game plan, allowing customers to buy online and pick up their products at the store.

As we look back at how far the industry has come, it's clear that investments in consumer-facing and back-end technologies, and the ability to adapt nimbly to continued advancements, will be the main components to ensure continued e-commerce success.

E-Commerce Rose in the Digital Dawn

The history of e-commerce dates back further than you might think. It initially was introduced about 40 years ago when the first major e-commerce company, CompuServe, was founded in 1969. At that time, CompuServe offered computer time for rent to other businesses.

In the late 1970s, CompuServe began offering services directly to consumers. Another big game-changer came nearly 20 years later, in 1994, when Netscape Navigator was created as a Web browsing tool, becoming the primary Web browser on the Windows platform before the rise of modern giants like Google.

The world was opening up for a new kind of shopping, but until the 2000s, e-commerce was fairly limited. Customization and localization weren't an option, and only the biggest brands had the resources to build an e-commerce presence.

The tide has shifted. As we head into 2020, nearly any business, regardless of size, can have an online presence. Customization has become standard for online retailers. Sites like Etsy let users upload custom designs to an online marketplace, where sellers can earn a profit on their self-made goods.

Businesses can build their own best-of-breed solutions, making sure they are compliant and offer the payment methods they want, as well as the customer experience they desire. Customers feel more empowered because of the influx of choice and the emphasis on personalization.

Looking ahead, there's a great deal both large and small businesses must do to capture shoppers' attention, but the path for brand-consumer connection is clear.

The E-Commerce Evolution Has Enabled Global Storefronts

In many ways, e-commerce has dissolved borders. Global e-commerce is expected to rise to 20.7 percent by the end of 2019, to $3.535 trillion. As sending payments electronically has become faster and cheaper, doing business globally has become table stakes.

That said, expanding into global markets can be daunting, challenging and costly. Businesses must navigate a complex environment to survive: e-commerce platforms, vendor contracts, local banking relationships, preferred payment methods, compliance with local laws and regulations, taxes and fraud. Expanding into new countries is more than simply taking what works at home and applying it to another market abroad.

As brands continue to establish operations across borders, payments processing is going to become a greater area of focus. Brands need to formulate a payment processing strategy that minimizes disruptions and eliminates barriers for customers.

The key to that is establishing relationships with local banks for billing optimization. Some businesses might look to build that expertise internally, but that can be a costly undertaking, both in time and money. There's a greater likelihood of success partnering with a payment service provider that has the infrastructure and regional insight to manage the payment processes properly in the countries in which merchants wish to do business.

With Accelerated Growth Comes Accelerated Regulation

While e-commerce can open the door to selling globally more easily, it also can be a legal minefield. In the past five years, consumers have become increasingly mindful of who is accessing, collecting, receiving, storing and otherwise processing their personal data.

In an effort to standardize data protection requirements and improve trust in the rapidly expanding digital economy, governments have enacted laws like the EU's General Data Protection Regulation (GDPR) and California's Consumer Privacy Act (CCPA), which effectively are changing the way business is conducted around the world. This has massive implications for global e-commerce.

The regulatory environment for brand owners and retailers that do business online will continue to get more restrictive, and neglecting the privacy concerns of consumers likely will put brands at greater risk of fines and penalties, negative headlines, and even a loss of trust with their customers. Businesses that can adapt quickly and implement efficient data privacy systems and processes ultimately can leverage their work in those areas as a competitive advantage.

In the years to come, we increasingly will see brands take their role as custodians of personal data more seriously. It's no longer just the right thing to do -- it is the price of doing business in the global e-commerce landscape.

From E-Commerce to M-Commerce: The Next 25 Years

As e-commerce continues to evolve, two of the most important trends for online retailers are mobile commerce and personalization. Putting customers' needs at the heart of every solution is crucial for continued e-commerce prosperity.

Many consumers believe the experience a company provides is as important as its products and services. Consumers have endless options for online shopping, so creating an experience that prioritizes convenience, trust, familiarity and efficiency is key to running a successful e-commerce business -- now and in the future.

A customer-centric approach means being where the customers are, and likely it's on their mobile devices. From shifting buying habits to the next innovations, like voice commerce and monetizing the Internet of Things (IoT), shoppers increasingly expect the convenience of shopping whenever and wherever.

Nearly three quarters (72.6 percent) of Internet users, equivalent to nearly 3.7 billion people, will access the Web solely via their smartphones by 2025, suggests a survey from the World Advertising Research Center. Mobile commerce, or m-commerce, is expected to represent a vast majority of people who prefer experiencing the full spectrum of the buyer's journey through smaller screens.

It's not easy to predict where commerce will go next. We do know that for brands, the innovation imperative boils down to two things: keeping up with the rapid pace of consumer technology; and using that technology to create new efficiencies in core business processes.

To stay competitive and top-of-mind for shoppers, retailers need to be agile and innovative, and be able to touch consumers at all points within their buying journey, regardless of which channel they prefer.

We've moved beyond the initial discovery of being able to buy something online, which consumers began experiencing 25 years ago. As we look to the next 25 years, investment in the customer experience will be the key for the continued success of e-commerce.


James Gagliardi is chief product officer at Digital River, a leading provider of global e-commerce and payment solutions. He is responsible for the strategy behind the companyís global product roadmap, and for ensuring its suite of commerce, order management, and payment and risk solutions meet, exceed and anticipate the needs of Digital Riverís world-renowned clients.


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