The Impact of the Internet on the Travel Industry
Retailing plays a massive role in any developed countries economic portfolio.
‘In Britain in 2001, 2.5 million people were employed in retailing comprising 10.5%
of all employees (National Statistics, 2001a) whilst retail sales exceeded £200 billion
representing 36% of total expenditure by consumers’ (Nielson, 2001).
It is also ‘a dynamic industry, subject to constant change brought about by
economic, demographic, legislative, technological and competitive forces’
(McGoldrick, 2002). Consequently, it is important for retailers to keep up with such
developments to maintain their position in such a vibrant market. One such
technological force, which has had a massive impact on retailing, is the increasing use
of computers and therefore the Internet.
In an increasingly technologically driven society, it is becoming essential to
keep up and embrace new ways of communicating and this is where the Internet
comes in. In the year 2000 in the UK, 8,487,000 people were connected to the Internet
according to Netvalue 2001, which was over 35% of the population. This was
compared to over 51% of the population in the USA at 53,488,000 (McGoldrick,
With over half of the USA’s population alone having access to the Internet, it
is clear that online there is a huge potential marketplace, especially when considering
that the Internet is a growing world-wide phenomenon. This is illustrated when you
consider that according to NOP world 25 million adults in the UK were online last
year, an increase of about 16.5 million on 2000’s figures (
). With this
rate of growth, it is clear that the Internet means big business. You can access pages
from all over the world on one computer, not just limited to sites from your own
country. Consequently, retailers would be naïve to ignore the huge retailing potential
Not only is the use of the Internet increasing, unsurprisingly, shopping online
is also becoming more popular. To shop online, potential consumers browse websites
at their leisure where they have access to the company’s products and services. They
then have the opportunity to put products in a hypothetical ‘shopping basket’ to
collect more than one item before proceeding to a ‘checkout’ where they enter their
credit or debit card details to complete the transaction. By using words such as
‘shopping basket’ and ‘checkout’, sites are reassuring customers with familiar
shopping terminology to encourage them to have the confidence to purchase online.
The money is taken out of the customer’s account and delivered accordingly.
According to the Interactive Advertising Bureau (IAB): ‘about 10% of all
purchases are now being made online and the trend has more than doubled every year,
online has become both a key channel to market and a key marketing channel’
To highlight this growing trend, NOP found that there was a 24% year on year