The history of e-commerce: from the first click to today
It all started with a Sting CD sold for under thirteen dollars in 1994. From there to a world where we buy almost anything from our phones. This is the story of how we learned to trust buying online.
Today, buying online is as ordinary as breathing: you order food, clothes, tools, or an appointment with your dentist from your phone without a second thought. But there was a specific day when this felt like science fiction, a time when sending your credit card number across a screen was a terrifying idea. The history of e-commerce is, at its core, the story of how the world learned to trust an invisible transaction.
August 11, 1994: the first secure click
The moment many consider the birth of modern e-commerce has an exact date: August 11, 1994. That day, a person used their computer to buy a compact disc —Sting's album 'Ten Summoner's Tales'— for $12.48 plus shipping, through a small online store called NetMarket, founded by Dan Kohn. The revolutionary part wasn't the CD, it was the how: the purchase used new encryption technology to send the card number securely.
Even if the NSA was listening in, they couldn't get his credit card number, Dan Kohn told the New York Times about that first encrypted sale.
That line captures why it was a milestone. The New York Times credited NetMarket with the first secure retail transaction on the internet. For the first time it was proven that payment information could travel across the network without a third party stealing it. And that opened the door to everything else.
1994 and 1995: the giants are born
Almost at the same time, two names that would change commerce forever were getting started. Amazon was founded by Jeff Bezos on July 5, 1994, in a garage in Bellevue, Washington. Curiously, Bezos first registered it as 'Cadabra' but changed it when a lawyer misheard it as 'cadaver'. On July 16, 1995, Amazon opened as an online bookstore. The first book sold was an impossibly titled work by Douglas Hofstadter about the mechanisms of thought.
That same year, the other giant appeared. On Labor Day, September 4, 1995, Pierre Omidyar launched a service called AuctionWeb, which would later become eBay. The first item sold was a broken laser pointer; Omidyar was baffled that anyone would pay for something broken, until the buyer explained he collected broken laser pointers. In 1997, AuctionWeb was renamed eBay.
- August 11, 1994: first secure retail purchase on the internet (a Sting CD on NetMarket).
- July 5, 1994: Jeff Bezos founds Amazon in a garage.
- July 16, 1995: Amazon opens as an online bookstore.
- September 4, 1995: Pierre Omidyar launches AuctionWeb, the future eBay.
- 1997: AuctionWeb is renamed eBay.
The gold rush and the bursting bubble
In the late nineties, the internet filled up with promises and money. Hundreds of 'dot-com' companies went public promising to revolutionize everything, many without having earned a single dollar. It was a digital gold rush. And like every rush, it had its hangover: in 2000 and 2001 the dot-com bubble burst and wiped out a heap of companies that lived more on hype than on real sales.
Amazon survived, but barely. The company didn't turn its first profit until the fourth quarter of 2001: just one cent per share, on revenues of more than a billion dollars. That penny, so ridiculous on the surface, was a huge signal: e-commerce wasn't a fad, it was a business model that could actually work.
From the computer to your pocket
What came next was an unstoppable expansion. Payments became easier and safer, smartphones arrived and, with them, the store left the desktop and slipped into your pocket. Buying went from a planned event in front of a computer to a few-second gesture at any moment of the day.
And the next frontier is already here: conversational commerce. Today many people don't open a website to buy or book, they send a WhatsApp message the way they'd text an acquaintance. The transaction once again looks like a human conversation, except now there can be an assistant on the other side answering instantly at any hour.
Your takeaway today
E-commerce wasn't born from some grand technology, it was born from a small act of trust: someone who dared to buy a CD through a screen. From that Sting CD to today's purchases by message, the story has always been the same: every advance was about making the purchase a little easier and a little more trustworthy. Whoever understands that understands where their own business is headed.
Sources
- Smithsonian Magazine — https://www.smithsonianmag.com/smart-news/what-was-first-thing-sold-internet-180957414/
- HISTORY — https://www.history.com/this-day-in-history/july-5/amazon-is-founded-by-jeff-bezos
- Wikipedia (NetMarket) — https://en.wikipedia.org/wiki/NetMarket
- Wikipedia (Pierre Omidyar) — https://en.wikipedia.org/wiki/Pierre_Omidyar
- Wikipedia (History of Amazon) — https://en.wikipedia.org/wiki/History_of_Amazon