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Retail Retold

October 2016

In the last two decades, e-commerce has entirely changed the retail sector and it isn’t a fad any more

Few amongst us would not be having a product purchased online – the last few years have seen the globe engulfed by eCommerce (Electronic commerce) or simply the buying and selling of products or services via the Internet. The ease of booking a flight via your smart phone or having the local grocer deliver the weeklies at the click of a button has become an activity no longer treated as a luxury but instead a necessity of modern day living. The thought of living without eCommerce may seem incomprehensible to many – however, most of us have lived without the same for most part of our lives.

market-rewaind-chart2The 1960s-70s saw the seeds of modern day eCommerce planted with the development of the Electronic Data Interchange (EDI). EDI replaced traditional mailing and faxing of documents with a digital transfer of data from one computer to another without any human intervention. This period was followed by the idea of an English inventor and entrepreneur Michael Aldrich, credited for having introduced the world to the concept of ‘teleshopping’ – “In the summer of 1979, in the St Leonard’s Forest behind our house in Colgate, Sussex my wife and I were walking our Labrador, Tessa. We were relaxing, talking as ever about our children, just the usual family domestic things and I was thinking that we could use some assistance with the boring weekly supermarket shopping expedition. All of a sudden I thought about the television and hooking it up to the supermarket and getting the supermarket to deliver the groceries. I told her my idea and we rushed back to the house and I started thinking, writing and planning.”

The next 2 decades saw this idea extrapolated to a larger audience via developments around the internet. After France launched Minitel in 1982, the precursor to the internet, European Organization for Nuclear Research researcher Tim Berners Lee in 1990 along with his friend Robert Cailliau, published a proposal to build a “Hypertext project” called, “WorldWideWeb.” That same year, Lee, using a NeXTcomputer created the first web server and wrote the first web browser. In 1991, the National Science Foundation lifted a ban on commercial businesses operating over the Internet, paving the way for web-based eCommerce.

market-rewaind-chart3The 1990s saw major advancements in the commercial use of the internet. From the launch of what is today recognized as the largest online retailer in the world, Amazon, to the inception of search engines Yahoo and Google and online payment gateway PayPal, growth of this new medium to global commerce began a journey to amassing a size estimated at USD 1.55 trillion as on end-2015.

The launch of the smartphone has only aided the growth of this segment making it more retail friendly. With penetration of the same continuing to surge, it is no surprise that the eCommerce segment is estimated to surge nearly 2.5 times over the next 4 years.

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