Why Has the Internet Had a Greater Impact on Some Firms and Industries Than Others? What Does It Mean for Banks?

Since its introduction in the mid eighties, the internet has had a huge impact on many different firms and industries worldwide. It is the world's fastest-growing electronic communication tool gaining around 55,000 new users each day.Another example of its growth can b seen from emails; in 1998, while the US post office delivered 101 billion pieces of paper, 4 trillion email messages were delivered that year. The internet, unlike any other media has true global reach and has already begun to re-define the way business is conducted.

One of the main industries the internet has impacted is the retail industry. More than half of the internet users have purchased something online. You can buy almost any product and service on the internet from holidays and car insurance to books, clothes and music, it is all there and available. The main reasons people like to shop online is due to the fact that it is convenient, saves time and also the ability to compare prices, right in the comfort of their own home. However, there are still major concerns such as privacy, shopping charges, ease of returning product and product damage. Privacy being the main concern, with 91% of internet users expressing their concerns over cradit card security.

Although the internet has had a huge effect overall, it has definitly effected more areas than others. For example it has hugely effected certain retail areas such as music. With the launch of itunes and other similar websites, people no longer have to buy compact discs in the shops but can now buy the cd online and can either have it delivered to their home or download straight to the computer. The attractiveness of this is that people can get the music they want instantly, without having to wait for it to be delivered. This has caused the music industry to boom rapidly. However on the downside piracy is continuously on the increase with music being illegally downloaded everyday causing the music industry to lose billions of dollars every year.

Its hard to pinpoint exactly what the internet hasn't had much of an effect of. In my opinion, its had little effect on everyday items such as chocolate bars. The average consumer will purchase a chocolate bar at the point of consumption, for example at a newsagent. Although there may be some people who purchase chocolate, perhaps in bulk on the internet, i doubt it has actually affected the amount of chocolate bars sold in total as these people would most probably previously purchased these bars at wholesalers. Another example is newspapers and magazines. Again, it is most probable that subscriptions have gone up as people can easily subscribe via the web, the majority of people buy a newspaper on the day and like to read it while travelling or drinking a cup of coffee, so in that sense I would say the internet has had little effect.

Many banks began offering their services via the internet in 1995. This has allowed them to easily offer new