The way we buy things online is on the verge of a revolution

Amazon introduced Prime in 2005, letting customers pay $79 for a year-long two-day free shipping shopping spree.

It changed the entire industry.

Prime got people used to buying everyday items like toothpaste and Cocoa Puffs off the internet, and it got people used to window shopping from the comfort of their bed, both of which now are all the norm for online shopping.

Amazon brought together everything into one place, which was convenient, but limited in its personal touch.

The online retailer giant was the impetus for that first wave of innovation, and it’s also a big reason for the new look of e-commerce, according to Robert Peck of Sun Trust Robert Humphrey.

“We believe retail is at a tipping point,” Peck said in a note to clients Thursday.

“E-Retailers are leveraging new capabilities in old business models to expand existing and new markets like apparel, grocery and personal care, where e-Commerce had only limited penetration till now.” Peck calls it “E-commerce 2.0.”

The biggest change in “E-commerce 2.0” is the number of players in the game, and the personalisation they can provide.

Specialty retailers are populating the e-commerce ranks now. Companies like Warby Parker, Blue Apron, and the Honest Company are all examples of specialty online retailers pointed out by Peck.

It’s really a wave that started when mum and pop stores were the dominant way to buy goods. Then, the big box retailers came to town, followed by their online equivalents like Amazon. Now, we are seeing customers shopping at specialty online stores, more similar to the small mum and pops America started with than the giant behemoths.

These changes are happening now because of a combination of several factors. Ever cheaper cloud services make it easier for smaller players to compete and enter the marketplace. Further, a shifting taste towards the boutique from a generation that grew up on the internet has also driven change, according to Peck.

A move away from big retailers also means lower prices. As the people producing the products are increasingly the ones putting them in boxes and sending them to consumers, price hikes brought by middlemen and brick and mortar stores vanish.

Indochino is a great example of this phenomenon. The company specialises in custom-made men’s wear without the large price tags. They will gather measurements, customise colours and ship a suit to customers without them having to leave their house or speak to a human. The kicker is that they do it for less than traditional manufacturers, thanks to the power of the internet.

This revolution is not limited to e-commerce either. The digital revolution led to the rise of cord-cutters, which have sent the television industry in a tailspin. Netflix entered the market, letting people stream movies and TV shows from their home. Now, many cable networks are offering their own streaming services, and user generated content is growing ever more popular on sites like Twitch and YouTube.

As new players enter the e-commerce arena, the available market expands to accommodate them, Peck said. New consumers are attracted to diverse options and spend more money, and existing markets are made more efficient by the introduction and innovation of technology. Think Amazon’s efforts in drone delivery and 2-hour shipping, as well as its dominant efforts in widely-available cloud computing.

“The global village leverages producers and consumers at a global scale — offering the best of convenience and trust in addition to exceptional price and selection, all with enhanced personalisation,” Peck said.

As driverless cars and creepy robot butlers start becoming the norm, don’t expect your online shopping habits to stay the same as the next age of technology approaches.

Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.

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