The first purchase to be arranged online long predates the Internet and comes days after the first email ever sent. In 1971, the first person-to-person email was sent out on the ARPANET system, shortly followed by an email exchanged between computer science students at Stanford and MIT, agreeing on a meeting place to sell and buy some weed.
Online shopping was pioneered 9 years later in the UK, when Michael Aldrich connected, through a domestic phone line, a modified TV incorporated with a teletext service to a computer which could process transactions.
In 1984, the world’s first B2C (Business-to-Consumer) online shopping system was launched by Tesco, and a British Council initiative to help the elderly, connecting Aldrich’s system to Tesco’s transaction processing computers, recorded Jane Snowball, 72 at the time, as the first online shopper ever. Using her remote control, she selected groceries from a videotext list and the order was sent through her phone line to her local Tesco shop, with the goods delivered to her door.
At the same time, the first electronic mall was announced, designed by CompuServe, the first major commercial online service provider in the United States, where users could scroll through electronic lists of thousands of products, filter them by choice, acquire prices and other information, and according to the Oxford English Dictionary, the first recorded use of the term online shopping came in reference, when in its October 10, 1984 issue, the Alton Telegraph announced that: “Comp-U-Store, the largest on-line shopping service, is available to CompuServe, DJNR and The Source subscribers.”
The first true e-commerce transaction, to include both ordering and payment online, came at the time when the Internet was just opening for private, civilian usage. On August 11, 1994 Dan Kohn, running a website based in New Hampshire called NetMarket, sold a CD of Sting’s Ten Summoner’s Tales album to a friend in Philadelphia, who used his credit card to spend $12.48, plus shipping costs, in a transaction that, for the first time ever, was protected by encryption technology.
“Even if the N.S.A. was listening in, they couldn’t get his credit card number,” said Daniel Kohn; and the New York Times reported the breaking news on the following days under the bold title Attention Shoppers: Internet Is Open: “At noon yesterday, Phil Brandenberger of Philadelphia went shopping for a compact audio disk, paid for it with his credit card and made history.”
Later in August, Pizza Hut launched its PizzaNet online service in Santa Cruz, CA, where customers using a particular interface could log in to PizzaNet central server, order their pizzas, enter their details and after a lengthy confirmation process pay at the point of delivery. “OK, not as simple as picking up the phone, but it’s early in the cyberpizza game.“ (The Los Angeles Times, 25 August, 1994)
Both Amazon and eBay debuted online in 1995, Amazon starting as a marketplace to sell books online and marketing “one million titles and consistently low prices,” and eBay, launched as AuctionWeb, and intended to be an online person-to-person trading community, with the first sale recorded – a broken laser pointer listed by eBay’s founder, Pierre Omidyar.
PayPal came into existence in the year 1998, the same year when Google and Yahoo both entered the world of eCommerce and at the times of an extreme growth in the usage and adaptation of the Internet by businesses and consumers, to today, when last year an estimated 1.61 billion people worldwide purchase goods online and the global e-retail sales amounted to 1.9 trillion U.S. Dollars, with a projected growth of over 4.0 trillion U.S. dollars by 2020.