History of Online Sales: What Does It Mean to Retailers?

Once upon a time, retailers were limited to the customers they attracted off the street. These bricks and mortar businesses...
History of Online Sales: What Does It Mean to Retailers?
Once upon a time, retailers were limited to the customers they attracted off the street. These bricks and mortar businesses had never heard of online sales, advertising metrics, mobile apps or iBeacon technology. Their primary competitors were all within a few mile’s radius of their stores, and they had no thought of competing in a global marketplace. Any resemblance to online sales back then were catalogs.

Fast forward to present day and the rise of the internet has revolutionized the retail landscape. Now even the smallest stores compete internationally, have an online presence, and use consumer metrics to shape the services they offer. Online sales have not only broadened consumer choices; but they’ve also opened the world up to retailers as well.


Before 1995, internet was still limited to universities, dial-up connections and AOL chat boards. With introduction of Window 95, Microsoft made it easy for computers to connect with internet. Broadband also began to be mainstream. These two factors converged to start the rapid adoption of internet in United States. Later 1990s was the period of dot com boom in United States with eBay and Amazon stocks soaring to record highs. Anyone remember pets.com and webevan.com?


The beginning of new century saw dot com bust which turned out to be a temporary blip for online sales.

The competition was on – thanks to the advent of cheap, online-only retailers (Amazon sold its first book in 1995, but it wasn’t until this decade that digital business started to dominate the marketplace). The phrase ‘ Cyber Monday’ was first coined in 2005 to describe one of the biggest online shopping days of the year, online revenue for the festive period alone topped nearly $20 billion in this year.

With the continued growth of online sales at an average rate of 25% year over year, bricks and mortar retailers started to invest in their digital presence, and it looked as though this increased focused on online sales (by both retailers and consumers) might spell the end of the traditional bricks and mortar store.


If the previous decade was all about developing an online presence, then this one has (so far) been about service. Online sales generate more than just revenue; they produce metrics on consumer behavior retailers in the 1990s could only dream of.

Now, the focus is back on bricks and mortar stores. 93% of sales still happen in physical stores but they have been growing at 2-3% whereas online sales have been growing at approximately 15% rate in the past few years. Brick and mortar stores are now starting to compete with online-only businesses with their own online offerings. At this point, bricks and mortar stores account for nearly 59% of the total internet retail revenue, dominating a market that was already worth $20 billion. Successful stores are using technological advances like mobile apps to merge their digital and high street presence, delivering a customer experience both online and in their physical stores.

Future trends

There is no denial that online sales are growing at a faster clip than physical store sales though the trend has slowed from 25% in early 2000s to 15% in the 2010s. Amazon, the dominant retailer in online sales, crossed $100 billion in sales in 2015 in just 20 years, a first in the history of retail. To put in perspective, Amazon on an average added $5 billion in new sales each year.

When asked last year about the future of retail, Professor Scott Galloway, a marketing expert from New York University said very well, “The world looks like a multi-channel future.” Walmart continues to invest in online infrastructure to better compete with Amazon in online sales. Amazon is rumored to be opening physical stores.

It’s a sentiment that was recently echoed when Google coined a new phrase to describe the modern journey to purchase, micro-moments. We might prefer shopping in stores, but a whopping 81% of us will still consult our phones during the process. The internet plays a significant role in governing buying behaviors, even when we’re not shopping online.

This is the reason why, by the end of 2015, nearly half of all major retailers are evaluating iBeacon technology. Mobile apps not only allow retailers to seamlessly integrate their web and store experiences, but also connect with shoppers as they browse the aisles of the physical store. Mobile apps in physical world act as shoppers’ online shopping list, online cart and online promotions without shoppers having to remember to bring physical coupons. They provide customers with personalized information; user guides, adverts, and vouchers that can be delivered directly to the consumer’s phone. Mobile apps are vital for owning the journey to purchase, and these omni-channel devices are the future of sales.

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