As a leading packaging supplier, Korpack helps countless e-commerce companies with packaging and shipping solutions. Along the way, we’ve learned quite a bit about the e-commerce industry. That’s why we’re going to go over the history of e-commerce and also the evolution of e-commerce packaging.
E-Commerce accounted for roughly $453.46 billion dollars worth of sales in 2017 in the United States alone. By 2021, E-Commerce is expected to be worth $4.5 trillion dollars globally. E-Commerce is becoming increasingly popular and it’s no longer about books, DVDs, and the like. People are ordering food, clothing, jewelry and more.
Amazon is currently the biggest name in the e-commerce industry (at least in the United States, globally, there are some big competitors). Still, the history of e-commerce didn’t start with Jeff Bezo’s behemoth. We’ll have to go back even farther to learn where e-commerce started.
Arguably, the first online transaction was a drug deal. In 1972, decades before Amazon and other e-commerce companies emerged, researchers at Stanford sold their counterparts at MIT a small quantity of weed.
There’s little information on how the sold dime bag was packaged or shipped, but we doubt anything resembling modern cannabis or e-commerce packaging was used.
Way back then, the emerging “Internet” (it hadn’t yet been given that moniker) was limited to communication between research facilities, universities, military bases, and the like. Back then, the soon-to-be World Wide Web was used primarily to transmit research data and other information.
In the years since, the Internet has obviously diversified. Let’s dig deeper into the emergence of online transactions.
E-commerce shoppers are spoiled today with the plethora of purchasing devices at their fingertips. Laptops, desktops, smartphones, smart speakers and more all make ecommerce easy. And the many e-commerce packaging solutions, including corrugated boxes, bubble envelopes, air pillows, mailing tubes, and more.
In the early years, choices were far more limited. The first e-commerce system was set up by Michael Aldrich 1980 and used a TV and phone system. Aldrich’s so-called teleputer enabled simple e-commerce transactions.
In 1982, the Boston Computer Exchange was founded. Some experts consider the Boston Computer Exchange to be the precursor to the modern ecommerce store. The platform allowed people to find, buy, and trade computer parts online using the Delphi Online System, an early dialup system.
Over time the Boston Computer Exchange expanded to support sales for other products. Still, the general public had almost no concept of ecommerce. The packaging industry too hadn’t evolved to cater to ecommerce and those brave pioneers engaging in online trade often relied on standard packaging solutions.
Yet change was on the horizon, both for packaging suppliers and the World Wide Web.
In 1991, the Internet went public. Once used only by researchers, the military, and a few others, the Internet would become a mainstay of daily life. The Internet didn’t quite explode onto the main stage, however. Many people were just getting used to the idea of computers, let alone the World Wide Web.
Yet when the National Science Foundation lifted restrictions and made the Internet publicly accessible through the WorldWideWeb browser people at home were now able to hook their personal computers up to the Internet.
The World Wide Web quickly expanded. By 1995, over 180,000 domain names were registered. By 1998? Over 2 million! Currently, roughly 350 million domains have been registered (estimated).
The emergence of the Internet would have a profound impact on technology, retail, and yes, the packaging industry. The Internet made it easy for customers to shop from home. Instead of running to the store, they could simply log onto a website, order products, and what for it to be shipped.
Most products shipped, of course, required e-commerce packaging, usually supplied by a packaging company. Packaging solutions have since evolved to better serve ecommerce. 50 years ago, mail order products were often sturdy goods and shipping wasn’t as much of a concern.
Now, products of every shape and size are shipped. Fragile products, live animals, goods that need to be refrigerated. You name it, and it’s being shipped. And these days, there’s an e-commerce packaging solution for just about any product.
Few companies would have as profound of an impact on e-commerce and the Internet as Amazon. Amazon was first founded in 1994 and initially focused on selling books. The company claimed to be the largest bookstore in the world, and quite likely, it was. Since Amazon could store books in warehouse space rather than a storefront, they could have far more books on hand than a traditional bookstore.
Amazon also chose books because they were easy to package and ship. Books are generally small and sturdy, which makes them ideal for shipping. As for packaging, a simple corrugated box is all that’s required, although bubble wrap, packaging peanuts, and air pillows could also be used to prevent the book from moving while being shipped.
Anyway, Amazon quickly expanded and started selling CDs, videos, and other products. While Amazon initially focused on products that were easy to ship and that customers would be comfortable buying without seeing, the company would continually expand its product lineup (and thus, packaging needs).
These days, Amazon is an “A to Z” seller, selling pretty much every product imaginable. Amazon is also one of the largest consumers of corrugated boxes. Walk down a street, and you’ll probably stumble across some Amazon branded shipping boxes on porches.
In 1999, Jeff Bezos was named Time's Person of the Year, largely for popularizing e-commerce and highlighting just how important the tech revolution he was driving was. The emergence of Amazon and other e-commerce retailers has had a profound impact on the retail sector and packaging industry.
Many packaging companies now crank out tons of e-commerce packaging. 40 years ago, there was no such thing as e-commerce packaging. Of course, packaging solutions were still around and many e-commerce companies rely on packaging that has been in use for years, such as corrugated boxes.
Demand for corrugated boxes and other packaging solutions has increased. Some packaging solutions have been popularized by ecommerce, such as bubble wrap mailers. A bubble wrap mailer is an envelope lined with bubble wrap and is perfect for shipping small products (say a USB drive). The bubble wrap protects the product during the shipping process.
E-commerce has even begun to shape our physical landscapes. Shopping malls were once the center of American life (at least as far as shopping was concerned). Now, malls are struggling to keep their doors open. People prefer goods shipped right to their door.
Back in 2007, online shopping accounted for just 5.1 percent of all retail sales. Now? E-Commerce accounted for 16 percent of retail sales in 2019, up from 14.4 percent in 2018. Expect the online retail segment to grow. And as it does, demand for e-commerce packaging and shipping solutions will continue to increase.