From Brick to Click: The Evolutionary Journey of E-commerce

Created: Jun 24, 2023

Updated: 22/08/2024

The advancement of technology and the internet have had a direct connection with the growth and evolution of ecommerce. How has e-commerce revolutionized the world? During the last decade, the e-commerce industry has seen a boom, with the internet becoming the preferred medium for marketing, promotion and selling products, compared to the traditional way of in-store shopping. The journey of commerce from traditional brick-and-mortar stores to digital platforms has been transformative, and as we step into 2024, the ecommerce landscape continues to evolve at an unprecedented pace.

In the early days of ecommerce, online transactions were made through basic online forms or email. As the internet started to gain more prominence worldwide, online marketplaces like Amazon and eBay started to emerge in late 1990s and 2000s, which revolutionized and completely changed the way people see shopping, where people would buy and sell products online, check-out on the platform and pay the required amount, and the product would be delivered to their destination within the designated timeline.

Infographics by GO e-Commerce

Dot-Com Bubble

As internet service providers like AOL connected tens of millions of homes to the internet, e-commerce boomed. As investors poured money into internet firms between 1998 and 2000, excitement peaked. The dot-com bubble, which characterized this time period, is notorious for its numerous promising but ultimately unsuccessful internet businesses. Boo.com, a notorious online retailer of clothing, blew through $185 million in just 18 months before declaring bankruptcy. Although the bubble burst in 2000, a strong digital infrastructure was left behind, which laid the path for contemporary e-commerce.

The Current State of E-Commerce in 2024

As of 2024, e-commerce is an integral part of the global economy, with billions of people engaging in online shopping. Here are some key statistics and trends that define the current state of e-commerce:

Global Market Size and Growth

The global e-commerce market is projected to reach $6.3 trillion in 2024, up from $4.9 trillion in 2021, reflecting a compound annual growth rate (CAGR) of 8.1%.

Asia-Pacific remains the largest e-commerce market, driven by rapid digital adoption in countries like China, India, and Southeast Asian nations.

Mobile Commerce Dominance

Mobile commerce (m-commerce) continues to dominate, accounting for over 72% of total e-commerce sales. The proliferation of smartphones and improved mobile internet connectivity contribute to this trend.

Mobile wallets and payment solutions, such as Apple Pay, Google Pay, and Alipay, are increasingly popular, facilitating seamless transactions.

Rise of Social Commerce

Social media platforms have become significant e-commerce channels. Social commerce sales are expected to surpass $1.2 trillion in 2024.

Platforms like Instagram, Facebook, TikTok, and Pinterest enable direct shopping experiences, integrating online stores with social media.

Sustainability and Ethical Consumerism

Consumers are increasingly conscious of environmental and ethical issues. Sustainable products and eco-friendly .

The Five Stages of E-commerce

E-commerce has emphasized convenience during the past two decades as a response to shifting consumer expectations and behavior. Instead of having one computer at home (if we were lucky), we now carry around palm-sized devices. We have gone from having a simple user interface on a black and white screen to interactive e-tailers giving services like a real-life sales clerk thanks to the digital revolution. A recent timeline of the five stages of e-commerce evolution and its trends is stated below:

2000-2005: Optimizing Search Functions
2005-2010: Encouraging buyers to spend online and working on click-to-conversion strategies
2010-2015: Increasing order value and providing incentives to the buyer
2015-2020: Creating brand loyalty and retaining customers
2020-Present: Maintaining brand value and working towards sustainability to encourage buyers for targeted buying, using Artificial Intelligence, Big Data, Analytics and trends to gather audience as per the categories and market timelines.
Future Trends (2025 and Beyond) :Adoption of blockchain for secure, transparent transactions and IoT for real-time logistics. Emergence of 5G, edge computing, and quantum computing, expanding global reach and inclusion

Multiple E-Commerce Platforms

With the passage of time, e-commerce has started to evolve, with the advent of social media, mobile commerce and omnichannel commerce. As of today, there are thousands of online platforms where people buy and sell products through mobile devices, social media/social commerce involves the use of social media applications like Facebook, Instagram, WhatsApp Business to list and promote their products and sell them online. Omnichannel commerce includes creating a seamless user experience by integrating products across multiple channels like online stores, social media, and mobile applications. With the first two decades of evolution being a transition phase, and creating e-commerce fundamentals, the last 3-4 years have been very critical to its growth and its user feasibility and accessibility has become ubiquitous.

Growing Trend

Online shoppers, once at the mercy of dial-up connections, can now shop anywhere. Amazon, Walmart, and eBay remain the largest e-commerce companies, but the way they conduct business is far more refined and sophisticated than it was in the early days of e-commerce.

Innovation and Technology

Recently, the e-commerce industry has been influenced by emerging and innovative technologies like Blockchain, Artificial Intelligence, virtual reality and data analytics. These technologies have completely transformed the way we shop, by making our experiences more immersive, precise and secure, as we receive ads, updates and suggestions to buy products as per our imaginations, latest searches and recent trends.

Effect of the COVID-19 Outbreak

Since the COVID-19 outbreak in November 2019, businesses started to shut down and start the trend of working from home. Restaurants got shut down. Cinemas, malls, and entertainment parks were closed and people were stuck in their homes. During this time, the e-commerce industry went through the most significant transformation since its inception. The future trends changed completely and online businesses like Amazon, eBay, Shopify, Noon recorded record profits in that timeline. E-commerce sales amounted to more than $4.9 trillion in 2021, and it is expected to increase by more than 50% by 2025. This explosive growth has been fueled by increased access to high-speed internet and the spread of smartphones, which are owned by over 5 billion people globally.

The development of ecommerce has been fueled by technological advancements, and a number of enabling technologies have been essential to this development. Here are a few illustrations:

Mobile Technology

As more people started to purchase online using their smartphones and tablets, the growth of mobile devices has had a big influence on ecommerce. Many e-commerce businesses have created mobile applications and optimized their websites for mobile use as a consequence.

Payment Gateways

Shopping online has become simpler and safer thanks to payment gateways like PayPal, Stripe, and Square. These systems enable users to quickly and securely save their payment information and make purchases.

Artificial Intelligence

Chatbots and customization engines driven by AI are becoming more widespread in e-commerce, enabling businesses to offer individualized customer service and purchasing experiences. AI may be used to analyze client data, improve pricing, and improve marketing plans.

Virtual and Augmented Reality

Consumers will soon be able to try on clothing, see things in their homes, and more thanks to virtual and augmented reality technology.

Blockchain

By offering a decentralized ledger of all transactions, blockchain technology has the potential to increase the security and transparency of e-commerce transactions. By doing so, fraud may be reduced and customer and seller trust may rise. One example of blockchain is cryptocurrency, which has gained a lot of prominence amongst the general audience and a lot of people worldwide have made huge amounts of money trading online via cryptocurrency, a type of currency which works on the phenomena of blockchain, and many countries have legalized this currency, where banks are basically rendered useless, and started to adopt it as a mode of payment on various platforms.

Big Data and Analytics

The implementation of Big Data and analytics is helping eCommerce business owners stay ahead in the market competition. Big Data is a huge collection of data that companies can use to figure out which product or service, price, and advertising is best to increase their business profits. Ecommerce analytics involves the process of collecting useful data from multiple channels that impact your eCommerce store. You can even use this valuable data to understand shifts in user behavior and online shopping trends. Big data resources help in optimizing logistics, supply chain management, inventory, and business operations. This results in enhanced performance and significant cost reductions.

Emerging Trends in eCommerce

Several emerging trends are expected to shape the e-commerce landscape in the coming years.

Direct-to-Consumer (D2C) Brands
- D2C brands bypass traditional retail channels, selling directly to consumers through online platforms. This model allows for better control over branding, customer relationships, and profit margins.
- The D2C trend is growing across various sectors, including fashion, beauty, electronics, and food.
Subscription-Based Models
- Subscription-based e-commerce models offer consumers convenience and personalized experiences. Subscription boxes for beauty products, meal kits, and curated goods are becoming increasingly popular.
- Subscription services provide businesses with recurring revenue and valuable customer data for personalized marketing.
Live Commerce
- Live commerce combines live streaming and online shopping, offering real-time product demonstrations and interactions. Platforms like Alibaba's Taobao Live and Amazon Live are pioneers in this space.
- Live commerce enhances customer engagement and drives impulse purchases, creating a sense of urgency and excitement.
Cross-Border E-Commerce
- Cross-border e-commerce is expanding, with consumers increasingly shopping from international online stores. Improved logistics and payment systems facilitate global transactions.
- Businesses are adapting to meet the demand for cross-border shopping, offering localized experiences, multiple currency options, and international shipping.
Enhanced Delivery and Logistics
- Faster and more efficient delivery options are crucial for e-commerce success. Same-day and next-day delivery services are becoming standard expectations.
- Innovations in logistics, such as drone deliveries, autonomous vehicles, and smart warehouses, are improving delivery efficiency and reducing costs.

Conclusion

Ecommerce has come a long way from its introduction in 1948-49, to transforming the world in 2023. It has faced various ups and downs, from gaining huge prominence during the covid time to normalizing after the post-covid era and the yearly increments are not that significant compared to the 2 years of covid. Many more powerful technologies are yet to come in the next few years, which will further strengthen the e-commerce industry. The mobile integration and omnichannel commerce strategies will continue to increase, as these tools and technologies will shape the future for our generations to come.

Infographics

As of May 2023, the ecommerce market is worth $6.3 trillion globally
Global E-commerce sales are predicted to reach $6.39 trillion in 2024, and exceed $7 trillion in 2023 (Worldwide sales were a little over $1 trillion in the not-so-distant-past of 2014)
The ecommerce market is set to expand by 10.4% by the end of this year
Projected social commerce sales are expected to hit $2,900 billion by 2026
Singapore’s market had a growth rate of 36%, the largest compared to any other country, in 2022
Fashion is the highest-grossing ecommerce sector, with $871.2 billion in ecommerce sales in 2022
Food is the fastest-growing ecommerce sector, with $244 billion in ecommerce sales in 2022, generating an increase of 16%
4.11 billion people purchased goods online in 2022, 8% more than the total online purchase in 2021
As of January 2023, 57.6% of worldwide internet users buy something online at least once a week.
In 2022, 60% of ecommerce purchases happened on a mobile device
As of March 2023, 29% of internet users make an ecommerce transaction on their phones at least once a week
Shoppers order 2.5 items with free shipping, compared to 2 items with paid shipping
Product photos are very influential in the buying decisions of 75% of ecommerce shoppers.
40% of shoppers will pay more for products from a trusted brand
43.1% of internet users visited any brand website each month in 2022.
The probability of an ecommerce brand selling to an existing customer is 60-70%, compared to the probability of selling to a new customer, which hovers around 5-20%
Extra costs at checkout causes 48% of abandoned carts
The top conversion incentive, by a considerable margin, is free shipping. 49.4% said free delivery would encourage people to complete a purchase. The top 5 purchase drivers in 2023 are listed as follows:

Free shipping - 49.4%
Coupons and discounts - 37.9%
Reviews from other customers - 31.6%
Easy returns policy - 30.4%
Good user experience and easy checkout process - 28.2%

The world’s biggest ecommerce markets at the end of 2022 are listed below:

China - $1,538 billion
United States - $875 billion
Japan - $241 billion
Germany - $148 billion
UK - $143 billion
South Korea - $118 billion
India - $97 billion
France - $96 billion
Indonesia - $59 billion
Canada - $59 billion

The top 10 countries for 2023 whose percentage of internet users purchase an item online at least once a week, are listed below:

Thailand - 66.8%
South Korea - 65.6%
Turkey - 64.6%
Mexico - 64.5%
Chile - 62.7%
Indonesia - 62.6%
India - 62.3%
UAE - 62.3%
China - 61.9%
Malaysia - 61.3%

Here’s the highest-ranking channels online shoppers picked for brand discovery:

Search engines (30.6%)
Ads on TV (30.2%)
Word-of-mouth recommendations (27.4%)
Ads on social media (26.6%)
Brand and product websites (23.3%)

This is how some of the most popular ecommerce tools rank in terms of the number of websites using them:

WooCommerce - 6.1 million live websites
Shopify - 4.1 million live ecommerce sites use this platform
OpenCart - used by 335,00 live websites
PrestaShop - 264,000 active stores
Adobe Commerce - 148,000 live websites
BigCommerce - 46,885 live websites

FAQs

Why have businesses moved from brick-and-mortar to e-commerce?

Companies embraced e-commerce to ensure they access a wider clientele base, cut some costs like rent and also bring the market to the people hence enhancing their sales and possible expansion.

How has the rise of e-commerce affected traditional retail stores?

This has been accompanied by decreased visits to actual human stores thus the physical retailers have had to open an online store or include online strategy in their store to remain relevant.

What role does digital marketing play in the evolution of e-commerce?

Online advertising is important in reaching out potential customers to the stores as well as using ads and appropriate social media and email selling techniques to compel them to shop online.

How have consumer behaviors changed with the rise of e-commerce?

Customer today expect everything to be eased, fast and a variety of choices available online. Consumers also shop online more frequently because of convenience, Hunt said, adding that customers take time to search for the products they want to buy online.

What challenges do businesses face when transitioning from physical stores to e-commerce?

Some are: building required digital facilities, dealing with the supply chain and delivery, positioning among competitors in the Internet space, and sustaining customer confidence while not being able to meet them personally.

How have small businesses benefited from e-commerce?

Small businesses have benefited from e-commerce by gaining access to a global market, reducing the need for costly physical storefronts, and utilizing digital tools to market their products more effectively.

What is the future of brick-and-mortar stores in the age of e-commerce?

Companies that have benefited by implementing e-commerce in their businesses include the small businesses because they get an opportunity to sell their products all over the world; they do not need to open physical stores, and because the technology they need to market their products is easily accessed on the internet.

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