Pizzas, Pot & Fields Of Gold: 7 Important Firsts In Online Retail History

Image courtesy of Paul Keller

How long have you been shopping online? People have been using electronic networks to buy and sell things for 40 years, and the first commercial transactions over the web took place over 20 years ago. Compared to bricks-and-mortar retail, where it took more than a century to evolve from catalogs, boutiques, and haberdasheries to big box stores, online retail has seen a significant amount of innovation in a very short amount of time.

What follows are some of the benchmarks in e-tail — including some moments that may seem commonplace now, but nonetheless were important firsts in taking the internet from a way for hobbyists to connect, to the preferred method of shopping for hundreds of millions of people.

1. The First Online Purchase

A Sting CD, 1994

This depends on how you define “online,” and probably on how you define “purchase.” Students at Stanford and at MIT reportedly carried out a transaction for a small amount of marijuana over the ARPANET in the early ‘70s, but submitting payment online wasn’t possible yet.

Selling and swapping indirectly on closed-garden services like CompuServe and AOL or on local bulletin boards (BBSes) were also options, and it seems like we’ve come full circle with the growth of peer-to-peer sale and swap groups on Facebook. However, what was the first transaction that actually looked like e-commerce as we know it today?

The official first purchase online with encrypted credit card payment was made by a guy in Philadelphia in 1994. We know this because the event was written up in the New York Times at the time. The first purchase was a CD copy of Sting’s Ten Summoner’s Tales, because it was 1994.

At the time, e-commerce was limited to people who had a Unix computer and the tech knowledge to run the early web browser Mosaic, which the New York Times called “a sophisticated Internet navigational program.” To handle the payment part, aspiring online shoppers needed to download the encryption program PGP, which was used for more than email back then, and wasn’t yet available for Windows or MacOS.

“Even if the NSA was listening in, they couldn’t get his credit card number,” the chief executive of Net Market Company, an early web-based cyber mall, bragged to the Times, because “cyber mall” didn’t sound ridiculous yet in 1994.

About a month before that first purchase, Jeff Bezos started a company called Cadabra, which changed its weird name and launched its own online store at Amazon.com a year later.

 

2. The First Commercial Website

Symbolics.com, 1985

The first registered commercial domain name doesn’t just predates the idea of shopping online, but predates the invention of what we now know as the World Wide Web. The first .com domain was Symbolics.com, and has been continuously registered since 1985.

The original Symbolics went bankrupt; while its products survived as a successor company, someone else now owns the Symbolics.com domain name. It is a historic piece of real estate, after all.

3. The First Online Auction

Informally and formally, CompuServe, 1978 and 1982

eBay, which began in 1995 as AuctionWeb, was the first dedicated auction site, but less formal auctions were held on bulletin boards on CompuServe dating back to the ‘80s, according to eCommerceBytes. The service created auction services for its users, creating an early version of eBay within the service’s walls.

4. The First Online Food Order

Prepared food: Pizza Hut, 1994
pizzanetPizza Hut claims to have made the first online sale, period, but that’s not true. That title still belongs to the Sting CD, since the Hut’s experimental PizzaNet site was really just a place to type in your address and click on the items you wanted to order.

A contemporary article from the Los Angeles Times explains that how the system really worked was that someone from your local Pizza Hut would call to confirm the order, and payment still happened at your doorstep, presumably in cash. PizzaNet launched in Santa Cruz, CA in 1994, and full-fledged online ordering began at Pizza Hut seven years later in only a few restaurants.

Groceries: The Gateshead Shopping Experiment, England, 1984

An English septugenarian was the pioneer in ordering groceries online. The BBC recounts that the local government wanted to offer easy ordering for senior citizens with limited mobility, and chose a resident with a broken hip as the first customer.

She navigated a terminal connected to her television to connect to local retailers by dialing phone numbers (domain names weren’t a thing yet) and order items with her remote. It took her 15 minutes to learn the system, but she remarked that she missed the social aspect of shopping.

5. First Mobile Shopping App

eBay, 2008

You could shop on earlier phones, sure, but the Apple and Google App Stores as we think of them today debuted in 2008. Now shopping apps are so commonplace that there’s an entire industry of fake retailer apps. Back in 2008, the whole idea was new, and one of the first iPhone apps to debut was eBay.

Here’s Ken Sun, then the group project manager for search at eBay, introducing that app at Apple’s Worldwide Developer Conference in 2008.

6. The First Online Retailer to Open Physical Stores

Bonobos, 2012

2012 was a big year for online retailers to move offline: fashion brand Bonobos, eyeglass seller Warby Parker, and the Gap-affiliated, now-defunct Piperlime all opened their first stores that year.

Other large online retailers, mainly clothing brands, began experimenting with popup stores that brought customers things that they could actually try on.

7. The First Online Banking

Stanford Federal Credit Union, 1994; and Wells Fargo, 1995

Wells Fargo claims to be the first bank that let customers access their accounts online. And it does indeed appear to be the case that Wells was the first national bank to do so, but the first financial institution of any sort to offer online banking was a regional credit union, the Stanford Federal Credit Union.