The History of E-commerce: From Mail-Order Catalogs to AI Checkout

By Victor Hoang · Updated Oct 24, 2026

In September 1979, Michael Aldrich's wife Sandy operated a modified television in New Orleans. Engineer Peter Champion hid under the table to make the connection work. Aldrich later wrote that "September 1979 was the first public demonstration of online shopping." Buying from home would wait until 1994. It needed a browser and a way to protect a card number.

Online shopping was first demonstrated in that month, when Aldrich of Redifon Computers in Britain linked a television to a computer over a phone line. The first widely cited secure web sale came on 11 August 1994. Dan Kohn's NetMarket sold a Sting CD for an encrypted credit card number. The throughline is a loop: each time selling moved farther from the shop counter, someone had to solve trust and payment. Only then could the next step in distance stick.

Timeline at a Glance

The Catalog Age (1872-1960s)

A price list on paper puts the shop in the mailbox

Imagine a farmer in 1872 with money in hand and no store within a day's ride. Aaron Montgomery Ward's answer, according to the Chicago History Museum, was a single sheet of paper offering 163 items, first mailed on 18 August 1872. By 1874 it ran to 32 pages, and by 1876 to 152 pages with 3,000 items. Ward's slogan, "satisfaction guaranteed or your money back," is the first trust device in this story: a promise that made buying from a stranger you couldn't see feel safe.

Richard Sears began in 1888 with a thin mailer of watches and jewelry, and from 1908 to 1940 the company sold house kits through its Modern Homes catalog, according to Smithsonian Magazine. The Smithsonian Libraries note that parcel post began on 1 January 1913 and that marketing through it "gave rise to great mail-order businesses." The longer lineage of printed lists, from sixteenth-century printers to Franklin, is told in The History of Catalog Selling.

Be careful with the label here. Catalogs, telegrams and phone orders were precursors, ways to order at a distance. Nobody called them e-commerce, because the order still traveled on paper or a human voice and the money moved by other means. What catalogs did establish was the shape of the whole business: a standing offer, a way to order, a promise to refund, and a carrier to deliver. Every web store inherits that shape.

What this means for teams today: A refund promise and reliable delivery sold more than the product photos did. If your online checkout feels risky to a new buyer, fix the guarantee before you fix the button.

The Wired Order (1948-1993)

Computers start taking orders before the web exists

Business-to-business ordering went electronic first. The X12 standards body says Edward Guilbert was picked by Maj. Gen. William H. Tunner as traffic manager for the Berlin Airlift (1948-1949), where he concluded that cargo information had to reach the airplanes ahead of them, in effect as a standard electronic manifest. Later, at DuPont, he developed a standard set of electronic messages for cargo information exchanged with the carrier Chemical Leaman Tank Lines. The same page says the Transportation Data Coordinating Committee (TDCC) was formed in 1968 by railroads, airlines, truckers and ocean shipping companies, that its first manual of US standards came in July 1975 with 45 transaction sets, 68 segments and 189 data elements, and that ANSI accredited the X12 standards in 1977. Guilbert, who served as TDCC president for 19 years, is known as the "Father of EDI," electronic data interchange.

Consumer ordering followed from a different direction. In early 1979, the Aldrich archive recounts, a 26-inch color television, a prototype for the Post Office's Prestel service, was delivered to Aldrich's office on the Crawley Industrial Estate in Sussex. Champion found a chip set inside it with a modem, a character generator and an auto-dialler, and connected it to a Redifon computer. That summer, walking in St Leonard's Forest, Aldrich thought of ordering groceries through the set. He called the idea teleshopping, "shopping at a distance," and demonstrated it that September in New Orleans. Aldrich says he went on to design and install such systems for major UK companies from 1980, including what he calls the world's first supermarket system.

France went further, and to a whole population. The Computer History Museum says France Telecom offered free Minitel terminals in 1981, "launching the first mass 'Web,'" and describes users paying for minutes on Minitel sites through their phone bills. Another museum page counts six million users by 1984, more than half of France's roughly 60 million people by the early 1990s, and over 25,000 sites at the peak, and says the system wasn't fully shut down until 2012. Dates for Minitel's earliest trials vary by source, so treat 1981 as the mass rollout.

In the United States, a 1988 START magazine guide shows what the CompuServe Electronic Mall looked like to an Atari ST owner: pick a product from the online catalog, enter 0 to order, give a credit card number, and wait for the package in the mail. That was e-commerce at its most basic. The order was digital, the money and goods weren't.

Finally, the catalog itself reached its end as a mass medium. Sears stopped producing its Big Book on 25 January 1993, a year before the web sale that would replace it.

The new problem was reach. Every one of these systems ran on a closed network, so a customer had to be on the same one as the seller. Nothing yet connected a stranger to any store.

What this means for teams today: EDI is still how large retailers and suppliers exchange orders, and it was built for trust between known partners. If you sell to businesses, expect to meet it, and don't assume a web form replaces it.

The First Web Sale (1994-1999)

A browser, a card number and a bookstore

The web supplied open reach. In 1994 two experiments tested what could be sold through it. The Smithsonian Magazine reports that on 11 August 1994 Dan Kohn sold a Sting CD, Ten Summoner's Tales, through his site NetMarket to a friend in Philadelphia for $12.48 plus shipping, with the credit card number encrypted. The New York Times reported it the next day. The Internet Shopping Network claims it began selling computer equipment online about a month earlier, so "first" depends on how you count. The same year, Pizza Hut and the Santa Cruz Operation built PizzaNet in Santa Cruz, where a customer filled out a web form, a central server relayed the order, an employee phoned to verify it, and payment was on delivery. Trust still lived on the telephone.

The missing piece was protection for the card number. In April 1995, Taher Elgamal and Kipp Hickman published an SSL draft describing a protocol that "allows client/server applications to communicate in a way that cannot be eavesdropped." The draft expired and never became a standard, but it set the path. In January 1999 the IETF published TLS 1.0 as RFC 2246, "based on the SSL 3.0 Protocol Specification as published by Netscape." The browser that carried it is told in The History of Web Browsers, and the web itself in The History of the World Wide Web.

Two companies then defined the shapes e-commerce would take. Amazon's 1997 prospectus says it was incorporated in Washington in July 1994, opened its bookstore, "Earth's Biggest Bookstore," in July 1995, and had no sales before that. Net sales were $511,000 in 1995 and $15.7 million in 1996, to about 180,000 customer accounts in over 100 countries. That is the store model: own the inventory, own the customer.

eBay is the other model. Its 1998 prospectus says Pierre Omidyar founded the business as a sole proprietorship in September 1995 and incorporated it in California in May 1996. By 30 June 1998 it had hosted over 15 million auctions with gross merchandise sales above $340 million. Sellers paid a listing fee of $0.25 to $2.00 and a success fee stepping down from 5% to 1.25%, while buyers paid nothing. eBay earned its fees from other people's sales, which is the marketplace model. How the two compare today is covered in marketplace vs ecommerce store.

The new problem was getting from a record of an order to reliable money. The dot-com boom funded that experiment with far more optimism than evidence.

What this means for teams today: The two shapes still sit under almost every online business: sell your own stock, or host other people's. Our guide to ecommerce business models walks through how to choose.

The Dot-Com Crash (2000-2003)

Losses mount, payments consolidate, survivors get patient

The boom turned into a squeeze, and the numbers show it even for the survivors. Amazon's 2002 annual report lists net losses of $1.41 billion in 2000, $567 million in 2001 and $149 million in 2002, while net sales rose from $3.12 billion in 2001 to $3.93 billion in 2002. Revenue kept climbing, but the 2002 report still showed a loss. The longer story of the boom and the failures is in The Dot-Com Bubble.

Payments consolidated. On 8 July 2002, eBay announced it would buy PayPal in a stock deal worth about $1.5 billion at eBay's 5 July price. The release says PayPal was available in 38 countries and that roughly 60% of its business occurred on eBay, and quotes PayPal's Peter Thiel calling the combination "a win-win situation." eBay's 2002 annual report says the deal closed on 3 October 2002, and reports about $14.9 billion in gross merchandise sales and 61.7 million registered users for the year. A payment tool built for one marketplace had become the default way to pay on it.

The US Census series that FRED republishes begins in the fourth quarter of 1999, when e-commerce was 0.6% of US retail sales. The crash didn't stop the line from rising. It only ended the idea that growth would be easy.

What this means for teams today: Revenue growth that burns more than it earns is a bet, not a business. Amazon's filings show it survived on patience and scale. Track ecommerce metrics and KPIs such as margin per order from the first month, not after the first funding round.

The Platform Years (2003-2019)

Marketplaces, payments and store software become infrastructure

China built its own version, and built it on trust. Alibaba's 2014 filing says the company was established on 28 June 1999, with the founders first gathering in Jack Ma's apartment. It launched Taobao Marketplace in 2003 and founded Alipay in 2004 to address trust between online buyers and sellers, then Tmall in 2008 for branded goods. In the twelve months to 31 December 2013, the filing reports, its China retail marketplaces had 231 million active buyers and generated RMB1,542 billion (US$248 billion) in gross merchandise volume.

The same filing documents a second shift, the phone. Mobile orders were 4.6% of Alibaba's gross merchandise volume in the quarter ended 30 June 2012 and 19.7% in the quarter ended 31 December 2013. The checkout moved from a desk to a pocket in 18 months.

In the West, the platform that serves small stores began as a store. Shopify's 2015 prospectus includes a letter from founder Tobias Lütke saying the first Shopify store was the team's own snowboarding business, started in 2004, and that the software available then was built for large companies. Shopify was incorporated on 28 September 2004, launched its platform in 2006, and by 31 March 2015 had 162,261 merchants in about 150 countries and $3.8 billion in gross merchandise volume for 2014. The choice is no longer whether to build checkout software. It is which platform to rent, covered in ecommerce platform selection.

The new problem was dependence. A merchant on a marketplace or platform depends on its fees, rules and search results, much as publishers came to depend on search engines.

What this means for teams today: Renting infrastructure is faster than building it, but own your customer list and your data. Whoever holds the buyer relationship holds the leverage.

The Agent Age (2020-present)

Shopping jumps online, then an assistant starts to buy

In the first half of 2020 the share jumped. The Census series on FRED shows e-commerce at 11.2% of US retail sales in the fourth quarter of 2019 and 16.3% in the second quarter of 2020. After that it kept edging up: 17.1% in the second quarter of 2026, seasonally adjusted. Roughly one retail dollar in six is now spent online, from 0.6% in 1999.

The newest turn is who clicks "buy." On 29 September 2025, Stripe announced that it powers Instant Checkout in ChatGPT, with US users able to buy from US-based Etsy businesses inside the chat and Shopify merchants coming soon. The Agentic Commerce Protocol, co-developed with OpenAI, is described as an open standard that "creates a shared language between businesses and AI agents." A Shared Payment Token lets ChatGPT start a payment without exposing the buyer's card details, and each token is scoped to a merchant and a basket total. The handoff is one program calling another, the pattern traced in the history of APIs.

Notice the echo. The Shared Payment Token solves the same problem as Ward's refund promise and Alipay's escrow: how a buyer trusts a transaction they can't supervise. Whether assistants become a major sales channel is still an open question. The first pages of that history are being written now, and early announcements are not results.

What this means for teams today: Product data, prices and policies need to be readable by software, not only by people. Expect more of your traffic to arrive through search engines, marketplaces and assistants that you don't control.

Key People

Key Facts

Key Facts: E-commerce History

• Montgomery Ward's first catalog, mailed on 18 August 1872, was a single sheet offering 163 items, per the Chicago History Museum.
• The X12 EDI standards were accredited by ANSI in 1977, per the X12 standards body.
• Dan Kohn's NetMarket sold a Sting CD for $12.48 plus shipping on 11 August 1994, per Smithsonian Magazine.
• Amazon's net sales were $15.7 million in 1996, per its 1997 prospectus.
• eBay completed its PayPal acquisition on 3 October 2002, per its annual report.
• E-commerce was 17.1% of US retail sales in the second quarter of 2026, per FRED republishing Census data.

The Pattern Behind the History

Across 150 years, e-commerce follows four repeating moves. We call it the Distance-Trust Loop. It's our own synthesis of the sources above, not a published study.

1. Distance. A new channel lets a seller reach a buyer who can't visit: the catalog, the phone line, the Minitel terminal, the web.
2. Trust gap. Strangers won't pay without protection: a refund promise, an EDI standard, SSL, escrow.
3. Payment rail. Someone builds the way money moves: a credit card number, PayPal, Alipay, a Shared Payment Token.
4. Platform. Someone packages the work so the next seller doesn't have to solve it again, which opens a new distance and starts the loop again.

What It Teaches Teams Today

• Fix trust before traffic. Every era's breakthrough was a trust device, not a bigger audience.
• Pick your shape on purpose. Own the inventory like Amazon or host others like eBay, and know which one your margins support.
• Treat payments as a product. PayPal and Alipay show that the checkout rail can matter as much as the store.
• Don't confuse growth with profit. Amazon's three-year loss run shows how long the gap can last.
• Prepare for buyers you can't see. Structured product data and clear policies serve search engines, marketplaces and AI assistants alike. The wider arc is in the history of the Internet.

Keep reading

• Internet timeline: the dated milestones from telegraph lines to AI agents.
• The History of Catalog Selling: the printed lists and mail-order houses behind the first era.
• Ecommerce growth model overview: how modern online stores plan growth.

E-commerce began as a way to order what you couldn't see from where you couldn't go. The tools changed from paper to phone lines to browsers to assistants, and the job stayed the same: make a stranger willing to pay.