My, how things have changed, and yet remained the same. Two decades ago, when the era of e-commerce was born, people fretted about online fraud and security—and that the Internet had too much porn.
Toward the end of 1994, MONEY magazine published a story about the sharp rise in consumers shopping from home. That year, some 98 million consumers made $60 billion worth of purchases from home, nearly all of it through phone orders prompted by mail catalogues and TV shopping channels. Another home-shopping option had suddenly arrived on the scene that year, too–an “on-line shopping service [that] requires a PC or Macintosh that’s equipped with a modem.” The article explained how such curious services worked:
For ordering, many of the “computer stores” offer shoppers an 800 telephone number to call. Others are set up so a shopper can click on a box next to the desired gift, type in payment information and the shipping address and then hit a “Submit Order” button. Some companies even let shoppers pick out the wrapping paper via computer.
That’s pretty much how people talked about e-commerce in 1994, when it was brand-spanking-new, not to mention weird, sorta scary, and totally unfamiliar to most consumers. American Public Media’s Marketplace noted that this week marks the 20th anniversary of online shopping, as chronicled in an August 1994 New York Times story describing how one shopper made history by purchasing a “compact audio disk” (a.k.a. a CD, which is how we used to listen to music before iPods, kids) by Sting—a transaction “celebrated as the first retail transaction on the Internet using a readily available version of powerful data encryption software designed to guarantee privacy.”
In honor of the big anniversary, we thought it would be fun to look back at how the birth of online shopping was viewed in 1994, a year before Amazon.com arrived. There was some skepticism, lots of confusion, and plenty of futuristic gee-whiz bluster about all of this “on-line” business. For instance, a headline in The Financial Post (Canada) described e-commerce as a “tele-shopping magical experience,” and the story that followed was a bit dismissive of “the latest fad.” An October ’94 Computerworld story pointed to the group of skeptics who categorized online shopping as just another component of the “infohypeway” that was the Internet.
Mostly, though, what’s amazing is that, in retrospect, so much of what was said and written in 1994 about online shopping was pretty much right on the money. From the get-go, many people realized that e-commerce would revolutionize shopping, by making it cheaper, more convenient, and more customizable than traditional shopping in physical stores. There were also tons of concerns about security, fraud, hackers, and porn, as well as predictions that as online shopping grew, advertising would absolutely ruin the Internet.
Without further ado, here are some of the funny, odd, and/or eerily prophetic ways people viewed online shopping 20 years ago, back when it was just a baby.
Online shopping was as hip as the Marlboro Man. An end-of-the-year article from USA Today featured a side-by-side list of trends that were In and Out for 1994. The Out side included no-longer cool stuff like faxes, Bud Light, Joe Camel, theme parks, and TV shopping, while the corresponding IN side listed the Internet, microbrews, Marlboro Man, casinos, and “on-line shopping.”
Everything had to be explained in (now) excruciatingly painful detail. A modem, a New York Times magazine story explained, was “a small device that sends and receives computer language over the telephone and does with computer files what a fax machine does with paper.” You need one of these to use the Internet and possibly buy stuff, you see.
People had no clue where or how to buy stuff. “One dirty little secret on the Internet is that nobody’s selling anything yet,” an executive at QVC told a publication called Network World. At the time, home-shopping networks like QVC were viewed as potentially huge players in online shopping. Few retailers had their own websites or Internet “pages,” as they were more often described, so they used services like the Internet Shopping Network—something of an “electronic home shopping mall,” as Reuters put it—to post items for sale. At the time, the Internet Shopping Network merely listed product descriptions, but the plan was to eventually feature product photos and “eventually, moving pictures of the items.”
Roland Bust, a marketing professor at Vanderbilt University, explained to the Atlanta Journal and Constitution that most consumers “don’t know where to go” when they attempted to shop online in 1994. “Like a real mall, a cyberspace mall has lots of stores, and finding a particular product can be hard unless a user knows which stores carry what,” the story summed up. Interestingly, the article also pointed to CD-ROMs as another online shopping option at the time. They sold for $8 and up, and when inserted into a computer, the consumer could access the contents of a couple dozen catalogues, from merchants like Spiegel and L.L. Bean.
There was plenty to be scared about—privacy, fraud, porn, and more. If you think your private information is easy for scammers and marketers to gather now, just think about the Internet circa 1994. The NYT magazine story regarded email as a “reasonably private written message.” The Mail on Sunday (London) warned consumers that purchase orders must be placed on the phone because “credit card numbers given down a computer are not yet safe from fraud.” Five of the 10 most popular “newsgroups” then on the Internet were “sexually oriented,” the Atlanta Journal and Constitution cautioned, and because free porn was easy to come by and the “Internet has more dirty jokes than the walls of a public bathroom,” there was cause for concern that unsuspecting web surfers and shoppers would be horrified with what they (or their children) found. ‘Just the title of some of the discussion groups is something you don’t want your kids to see,” the head of IBM’s Internet services said to the (London) Times.
It was assumed advertising would ruin everything. This now seems pretty laughable, but in the early ’90s, Internet culture was “decidedly uncommercial,” in the words of Computerworld. What was then a niche group of users wanted the Internet to be a place where ideas and information could be shared quickly and openly. But as such it was open to the possibility of “being hijacked by companies, which will flood the system with advertising,” according to the Times.
“Advertisers are looking for ways to exploit cyberspace,” the Atlanta Journal and Constitution stated. And many Internet users weren’t happy about it. So-called “commercial zones” were “created on the Internet for exclusive use by advertisers, but companies haven’t figured out how to get netsurfers to look at them. Efforts to plant ads in the network’s 2,500 newsgroups have caused an uproar.”
Another prophetic assumption: Online shopping would make stuff cheaper. “Selling goods electronically can be 40% to 50% cheaper than by conventional means,” Computerworld explained. Without the need for salespeople or even a physical sales space, it seemed inevitable that online shopping offered sellers a means to lower overhead costs—and therefore lower the prices charged to customers. “Nobody’s going to want to do electronic shopping if there’s no advantage to the customer—and that advantage is cost. You’ve got to save money,” Randy Adams, a serial entrepreneur who went on to co-found Funny or Die, told the San Jose Mercury News in 1994, when he was involved in an e-commerce startup. “I think conventional retailers are not going to like what we’re doing because we’re forcing margins down.”
Sure enough, they didn’t—and they still don’t like how e-retail giants like Amazon are pushing around the competition and product makers alike, usually with the idea of getting prices lower for the customer.
People saw the upsides of customization and convenience, too. Not only would online shopping make it possible to buy stuff 24/7, regardless of “store hours,” and without dealing with traffic or even leaving the house, but e-commerce also brought with it the opportunity to order far more than what one found on a store’s shelves. A 1994 USA Today story focused on the new concept of “made-to-order merchandising,” in which customers could order shoes, jeans, greeting cards, and more in the personalized style and size of their choosing. “The trend is the first step toward on-line shopping—when customers will use computers to order exactly what they want rather than going to a mall,” the article stated.
Overall, they knew online shopping would be a huge deal. “At some point it will be a really big business,” a UBS analyst said to Reuters in 1994. How big? Analysts told Computerworld that “on-line shopping could explode into a $5 billion sales channel in a few years.” In fact, when the Census bureau began tracking e-commerce sales in 2000, it reported that sales had hit $5.3 billion—in the fourth quarter of 1999 alone. Forecasts call for e-commerce sales to hit $304 billion in the U.S. for all of 2014.