Jul 30

Written by: profitimo
Wednesday, July 30, 2008

Online stores have come a long ways from the mid-nineties, when major companies such as Amazon and eBay entered the playing field.

In the early 1990s, opening a store meant renting commercial space, buying merchandise and business equipment (such as shopping carts and cash registers), paying employees to keep the store open during business hours, and buying a service that enables customers to pay via credit card.

Launching an online store today means pretty much the same thing, although the virtual storefront has changed the nature of these steps and combined several into one: Online store software single-handedly eliminates the need for well-located commercial real estate, 99 percent of business equipment, cashiers, and a separate credit card service.

E-commerce didn’t develop into this miracle overnight, though.  Rather, it took years of visionary programmers and enterprising entrepreneurs to bring us the world of online shopping that we know today.

Early E-Commerce Ventures

Some of the earliest e-commerce sites are now also the most famous.  Although the World Wide Web was introduced in 1990, it was not until 1995 that two of the best-known sites today were launched: Amazon.com and Craigslist.  eBay followed a year later.

You will notice that all three of these early e-commerce sites represent very different types of online commerce.  Amazon.com follows more of a traditional store format, with set prices and one major seller, although small-time sellers can also now hawk their wares on Amazon’s product pages.  eBay provides regulation and a meeting space for buyers and sellers to come together, with most sales taking place in an auction format.  Craigslist is the least involved, offering little more than a community message board where people can buy and sell directly from one another.

Limitations of Early Online Stores

If you shopped online in the early days of e-commerce, you know that the experience was very different than what you know today.  With the exception of up-and-coming giants such as eBay and Amazon.com, most online stores were remarkably basic when compared to what we expect nowadays -- although back then, of course, it seemed quite remarkable.  E-commerce websites were much more limited in what they could do than they are today, in graphics and appearance as well as in coding and programming.  Fewer sellers offered conveniences such as the ability to place an order instantly with a credit card, or buyer accounts that stored payment settings and purchase history.  SSL encryption was introduced in 1994, enabling some online stores to offer secure transactions, but the technology was not as common -- or as expected -- as it is today.

In general, the phenomenon of the small-time seller was virtually unheard of in the early days of e-commerce, as there simply weren’t many options available to small stores back then.

Catering to Consumers: Balancing Convenience with Peace of Mind

As online shopping has become more popular, consumers have become interested in two things: convenience and safety.  Many of the features offered by online store software reflect these two priorities.  For instance, the need for convenience has led most large online stores to offer the ability to create an account, review and track past orders, and store customer information to facilitate faster checkout.  At the same time, concerns about the security of information exchanged over the Internet have prompted many online retailers to offer checkout and account management via secure channels.

Welcoming the Little Man

Another facet of e-commerce that has evolved over time is the big role played by small stores and sellers.  Thanks to the cost of setting up a store and an e-commerce site, small stores were much harder to come.  Today, on the other hand, small businesses have just as many options as the larger companies: for example, software for professional online storefronts and shopping cart systems, and services that enable them to offer the same payment options as larger stores.

While many of the major players have programmers, designers, and other technical personnel on staff, most small and mid-size businesses don’t have that luxury available to them -- nor do they need to.  Online stores today can choose from a variety of options for doing business, including:

•    Taking orders via phone and email.  Many online stores do not yet have a system set up for online checkout.  They may have products listed online, with a phone number or email address set up for checkout.  This method typically inspires the least confidence in online shoppers, who are used to features such as shopping carts, accounts, and one-click checkout from the major online stores.
•    Using a service such as PayPal.  PayPal has revolutionized online stores by making it possible for even the smallest sellers to offer credit cards as a payment option.  PayPal and similar services offer sellers everything from “Buy Now” buttons for single items, to integrated shopping carts.
•    Using online store software.  There’s no need to reinvent the wheel -- for sellers who want the professional appearance of a sophisticated online store, there are plenty of software packages on the market.  This software allows entrepreneurs to quickly and easily build a professional-quality online store.

The Evolution of E-Commerce

Although it may seem like it sometimes, the realm of e-commerce did not actually spring up overnight.  Many of the things that we now take for granted -- conveniences such as shopping carts and one-click ordering, readily accessible services such as PayPal, and a smorgasbord of online sellers to choose from -- evolved through trial and error.  In just a little over a decade, online shopping has changed the concept of commerce, for the owners of online stores as well as for the customers.

 

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