behind the web store: the organisational and spatial ...interactive television, telesales, and...

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1 Introduction In this paper, I address two issues of general relevance to contemporary debates in economic geography: first, the organisational and geographical implications of new information technologies for established industrial structures (Li et al, 2001; Wilson and Corey, 2000) and urban space-economies (Pratt, 2000; Zook, 2000); second, the enduring role of place to capital accumulation in an age of cyberspatial technologies and digital globalisation (Dodge and Kitchin, 2001; Leamer and Storper, 2001; Leinbach and Brunn, 2001). Specifically, I explore the organisational and spatial dimensions to the evolution of ‘multichannel retailing’ in Toronto. Multichannel retailers serve consumer markets via at least two routes, including any combination of e-commerce, catalogue or mail order, interactive television, telesales, and store-based retailing. Here, the term multichannel retailing is deployed to refer exclusively to the combination of an Internet-based web store with a network of physical retail outlets. I evaluate the organisational implica- tions of the adoption of business-to-consumer (B2C) e-commerce technology for six leading bricks-and-mortar retailers headquartered in the Toronto region and assess how the associated changes in business structure, if any, have been inscribed upon the urban landscape. In particular, I determine whether the organisational challenge of ‘fulfilling’ (1) Behind the web store: the organisational and spatial evolution of multichannel retailing in Toronto Andrew Currahô Department of Geography, University of Southampton, Southampton S0171BJ, England Received 27 February 2002; in revised form 21 May 2002 Environment and Planning A 2002, volume 34, pages 1411 ^ 1441 Abstract. In this paper I address two issues of general relevance to contemporary debates in economic geography: first, the organisational and spatial implications of new information technolo- gies for the economic landscape; and, second, the enduring role of place to digital capitalism. Specifically, I examine the organisational evolution of multichannel retailing in Toronto from a geographical perspective. Bricks-and-mortar retailers are increasingly pursuing a multichannel strategy by operating an Internet-based web store alongside the existing network of physical retail outlets. I therefore evaluate the organisational implications of the adoption of business-to-consumer e-commerce (e-tailing) technology for six Canadian bricks-and-mortar retailers based in Toronto and assess how the associated changes in business structure have been inscribed upon the urban landscape. The argument is developed in three sections. First, I discuss how the formula for competitive advantage in the new (r)etail markets of the developed world has shifted from a pure play to a multichannel organisational paradigm. Second, I provide a background to the development of Canadian e-commerce and an overview of the empirical methodologies employed during the research. Third, the focus of the paper moves ‘behind the web store’ to spatialise the physical places that constitute the fulfilment infrastructure of e-tailing as sequentially linked stages in Internet commodity chains. I evaluate the impact of the Internet commodity chain upon the geographical organisation of each retailer, and, in particular, consider whether the unique logistical requirements of e-tailing have stimulated spatial processes of disintermediation and reintermediation. It is argued that, when read through the lens of Toronto, e-tailing has incurred limited organisational disruption and is characterised by a distinctive geography of integration between online and offline retailing services within the urban space of the city. I conclude the paper by contextualising the findings within themes for conceptual debate in economic geography. DOI:10.1068/a3562 (1) Fulfilment is the process of physically delivering online orders to the consumer. ô Current address: Downing College, Cambridge CB2 1DQ; e-mail: [email protected].

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Page 1: Behind the web store: the organisational and spatial ...interactive television, telesales, and store-based retailing. Here, the term multichannel retailing is deployed to refer exclusively

1 IntroductionIn this paper, I address two issues of general relevance to contemporary debates ineconomic geography: first, the organisational and geographical implications of newinformation technologies for established industrial structures (Li et al, 2001; Wilsonand Corey, 2000) and urban space-economies (Pratt, 2000; Zook, 2000); second, theenduring role of place to capital accumulation in an age of cyberspatial technologiesand digital globalisation (Dodge and Kitchin, 2001; Leamer and Storper, 2001;Leinbach and Brunn, 2001).

Specifically, I explore the organisational and spatial dimensions to the evolution of`multichannel retailing' in Toronto. Multichannel retailers serve consumer markets viaat least two routes, including any combination of e-commerce, catalogue or mail order,interactive television, telesales, and store-based retailing. Here, the term multichannelretailing is deployed to refer exclusively to the combination of an Internet-based webstore with a network of physical retail outlets. I evaluate the organisational implica-tions of the adoption of business-to-consumer (B2C) e-commerce technology for sixleading bricks-and-mortar retailers headquartered in the Toronto region and assess howthe associated changes in business structure, if any, have been inscribed upon the urbanlandscape. In particular, I determine whether the organisational challenge of `fulfilling' (1)

Behind the web store: the organisational and spatialevolution of multichannel retailing in Toronto

Andrew CurrahôDepartment of Geography, University of Southampton, Southampton S017 1BJ, EnglandReceived 27 February 2002; in revised form 21 May 2002

Environment and Planning A 2002, volume 34, pages 1411 ^ 1441

Abstract. In this paper I address two issues of general relevance to contemporary debates ineconomic geography: first, the organisational and spatial implications of new information technolo-gies for the economic landscape; and, second, the enduring role of place to digital capitalism.Specifically, I examine the organisational evolution of multichannel retailing in Toronto from ageographical perspective. Bricks-and-mortar retailers are increasingly pursuing a multichannelstrategy by operating an Internet-based web store alongside the existing network of physical retailoutlets. I therefore evaluate the organisational implications of the adoption of business-to-consumere-commerce (e-tailing) technology for six Canadian bricks-and-mortar retailers based in Torontoand assess how the associated changes in business structure have been inscribed upon the urbanlandscape. The argument is developed in three sections. First, I discuss how the formula forcompetitive advantage in the new (r)etail markets of the developed world has shifted from a pureplay to a multichannel organisational paradigm. Second, I provide a background to the developmentof Canadian e-commerce and an overview of the empirical methodologies employed during theresearch. Third, the focus of the paper moves `behind the web store' to spatialise the physical placesthat constitute the fulfilment infrastructure of e-tailing as sequentially linked stages in Internetcommodity chains. I evaluate the impact of the Internet commodity chain upon the geographicalorganisation of each retailer, and, in particular, consider whether the unique logistical requirements ofe-tailing have stimulated spatial processes of disintermediation and reintermediation. It is arguedthat, when read through the lens of Toronto, e-tailing has incurred limited organisational disruptionand is characterised by a distinctive geography of integration between online and offline retailingservices within the urban space of the city. I conclude the paper by contextualising the findings withinthemes for conceptual debate in economic geography.

DOI:10.1068/a3562

(1) Fulfilment is the process of physically delivering online orders to the consumer.ôCurrent address: Downing College, Cambridge CB2 1DQ; e-mail: [email protected].

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individual online orders has stimulated spatial processes of disintermediation andreintermediation. In fact, I contend that in this particular spatiotemporal context,B2C e-commerce has incurred limited organisational disruption and is characterisedby a distinctive geography of integration between online and offline retailing serviceswithin the urban space of Toronto.

The argument is developed throughout the remainder of the paper in four sec-tions. Section 2 examines the shift from a pure play to a multichannel organisationalparadigm in the new (r)etail markets of the developed world, highlighting the trans-formative nature of competitive advantage in markets undergoing technologicalinnovation (Leyshon, 2001; Leyshon and Pollard, 2000; Wrigley, 2002). I then go onto consider the distinctive organisational challenge that traditional retailers maytheoretically face by serving consumers over the Internet. In section 3 of the paperI provide a background to the development of Canadian e-commerce, and related tothis, a rationale for the focus on Toronto and an overview of the empirical method-ologies employed during the research. Section 4 then moves `behind the web stores' todelineate the physical places that actually constitute the fulfilment infrastructure ofB2C e-commerce. These places are spatialised as sequentially linked stages in sectorspecific Internet commodity chains. Throughout section 4, I determine the disruptiveimpact of e-tailing fulfilment upon the geographical organisation of each retailer byevaluating evidence of the disintermediation and reintermediation of space and place.Section 5 concludes by contextualising the findings within themes for conceptualdebate in economic geography.

2 Contesting the new (r)etail markets: from a pure play to a multichannelorganisational paradigmOver the past decade, the `new retail geography' (Crewe, 2000; Lowe and Wrigley, 2000;Wrigley and Lowe, 1996; 2002) has explored the heterogeneous spaces of retail con-sumption. However, it has yet to grasp fully the organisational and spatial dimensionsof `e-tailing', which comprises business-to-consumer (B2C) and consumer-to-business(C2B) electronic commerce (Wrigley et al, 2002). B2C enables consumers to browsethrough stock inventory on a retailer's website, place items in an electronic shoppingbasket, and pay for the goods by credit card, which are then usually delivered by postor courier service. C2B involves e-tailers acting as `infomediaries', carrying noinventory but providing a gateway between the consumer and an aggregation ofB2C e-tailers (see section 4.3). In the context of this paper, e-tailing is hereafter usedsolely to refer to B2C e-commerce.

It was initially feared that both B2C and C2B e-commerce, together with thedematerialisation of consumption that these channels represented, would directlythreaten the economic vitality of traditional retail spaces (Cope, 1996; De Kare-Silver,1998). On the contrary, and in the broader process by which information are recon-figuring not annihilating space and place (Graham, 1998), it now appears that e-tailingis actively complementing rather than supplanting the urban landscape of bricks-and-mortar retail stores. Indeed, over the past two years the B2C sector has witnessed ashift from a pure play to a mutlichannel, or `bricks-and-clicks', organisational para-digm. That is to say, a growing diaspora of traditional retailers are migrating onlineinto cyberspace, the `electronic frontier' (Adams, 1997), to operate a web store along-side the network of physical outlets. Clearly, new technological assemblages such asthe Internet are evolutionary rather than revolutionary and assimilated into existingsocioeconomic systems (Thrift, 1996). Let us consider this shift in more detail.

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2.1 Mixing bricks with clicks: the formula for success in the race towards competitive advantage` If e-commerce were a mad dash to the finish line, pure plays would have taken thegold medal ... . But it has turned into a marathon, and as dot.com start ups gaspfor breath, traditional retailers, many of which stumbled out of the gate, aresteadily passing the pure plays like the tortoise that whipped the hare ... . In 2002and beyond, e-commerce [will] become more and more about multi-channel selling,giving traditional retailers a huge advantage as the race continues.''

Regan (2002)

In the formative years of the Internet economy, e-tailing was dominated by pure-playretailers, operating solely through web stores. By comparison, bricks-and-mortar retailersinitially refrained from entering this uncharted commercial territory, fearful that areckless foray into the online market, which they widely perceived to be an ephemeralcraze offering negligible future sales growth, would actually cannibalise the revenuestreams oföand undermine the sunk costs invested withinötheir traditional storenetworks (Doherty and Ellis-Chadwick, 1999). Initially, pure players were regardedas a new breed of innovative and extremely nimble firms, ` committed to the newtechnology in a way that firms predating the technology [could] never be'' (Jones andBiasiotto, 1999, pages 77 ^ 78).

The spectacular market valuations generated by dot.com start ups between 1999and 2000 reflected in part, therefore, the confidence of capital markets in theability of these pure players to ``rewrite the rules of organisation, providing sig-nificant first-mover advantages to those firms in the vanguard of its development''(Leyshon, 2001, page 56). By empowering any retailer, regardless of size, to imme-diately serve national and global consumer markets with an infinitely scalableproduct range, yet without bearing the `set-up' and `accumulated' sunk costs ofphysical stores (Clark and Wrigley, 1995), the pure-play model was seen to promisean increase in the contestability of retail markets and, therefore, a substitution oftraditional `hierarchies' for `hyperarchy'öan improved level of market coordinationbetween the consumer and a wider array of economic agents (Evans and Wurster,1999a).

However, the evolution of e-tailing has reconfigured the contestability of retailmarkets in a highly dynamic sense, with competitive advantage being wrestled fromthe pure players by multichannel operators. At the end of the 1990s various problemswith the pure-play business model began to emerge. Pure players faced over-whelming difficulties in establishing a distinct brand identity among an explodingcollection of rival, and often equally unknown, dot.com web stores. The acquisitionof a loyal customer base was severely constrained by the logistical challenges andfinancial burdens of fulfilment, which often resulted in delayed or missing ordersand in turn, consumer disillusionment (Ring and Tigert, 2001). It was mainly thefirst-movers of the Internet economy (especially Amazon), equipped with strongerbrands, who were able to survive the mass exodus of pure players during 2000 and2001.(2)

It soon became clear that a multichannel organisational paradigm offered a morerobust formula for creating and sustaining competitive advantage on the electronicfrontier, as well as in urban space, compared with organisations serving consumersvia single channels (for example, bricks-and-mortar establishments, catalogue and

(2) Saliently, as one of the pioneer pure players, Amazon finally became profitable on 22 January2002.

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mail order agents, or the remaining pure players).(3) This competitive advantage liesalong at least three axes. First, the bricks-and-clicks enterprise is able to draw uponan established brand name and customer franchise, thus affirming the authenticity ofthe web store and alleviating the marketing traumas experienced by the pure players(Brynjolfsson and Smith, 2000; Ellis-Chadwick et al, 2002). Second, the combinationof an electronic and physical presence provides the consumer with multiple points ofaccess to the retailer, enabling, for example, offline purchases to be researched inthe web store or online orders to be exchanged at a traditional store. This provides theconsumer with a richer spectrum of consumptive experiences to choose between(Mathwick et al, 2001) in an economy where the `experiential value' of shopping isnow arguably the ultimate source of distinction between retailers (Pine and Gilmore,1999). Third, traditional retailers can leverage existing investments in warehousing,supply-chain management systems, customer-support centres, and product-returnnetworks to facilitate the process of e-tailing fulfilment (Wrigley et al, 2002).

As a result of these competitive strengths, the multichannel organisational paradigmhas rapidly permeated retail markets throughout the developed world, as illustrated bythe absorption of e-tailing into the organisational structure of leading retail-industrytransnational corporations such as Royal Ahold and Wal-Mart (Wrigley, 2002). In turn,the growing dominance of a bricks-and-clicks organisational paradigm is effectivelyreducing the contestability of retail markets and raising entry barriers by imposing theset-up and accumulated sunk costs of both traditional retail outlets and the web storeupon firms seeking a lead role in the industry.

The bricks-and-clicks retailer is now a powerful motif of the ` new commercialrealities'' (Dawson, 2001, page 291) facing the wider distribution sector in the earlyyears of the 21st century and, more generally, of the ongoing shift towards network-based forms of corporate organisation in the informational economy (Castells, 2001).(4)

So far, academic interest in the multichannel organisation has largely been driven bydisciplines outside geography, including the logistics, management, and marketingliterature but this expansive body of work is remarkably aspatial in its perspective(for example, Chen and Leteney, 2000; Gulati and Garino, 2000; Hart et al, 2000;Reynolds, 2000; Timacheff and Rand, 2001).

There is a pressing need for empirically grounded and theoretically contextualisedstudies that investigate how incumbent retail organisations are absorbing the chal-lenge of e-tailing (see Aoyama, 2001a; 2001b; Murphy, 2002a; Willis et al, 2001). Inthis paper I seek to inject further knowledge into these debates by evaluating theextent of organisational restructuring, together with the related spatial outcomes, arisingfrom the adoption of B2C e-commerce technology by six leading Canadian retailersbased in Toronto. The electronic frontier confronts bricks-and-mortar retailers with a

(3) The diaspora of traditional retailers moving online has largely been at the heart of the growth inbricks-and-clicks retailing, but it is important to note that many former pure players, such asAmazon, eBay, or Gateway Computers, have also pursued a multichannel strategy either by addingphysical retail space to the business model or by forming strategic alliances with bricks-and-mortarretailers (see Enders and Jelassi, 2000; Rosen and Howard, 2000; The Economist 2001). Forexample, on 24 April 2002, Amazon announced an alliance with Borders Books to distributeonline orders through its extensive physical store network in the USA.(4) The bricks-and-clicks organisation is not entirely unprecedented. Electronic nonstore retailinghas been predicted for some time (Doody and Davidson, 1967; Rosenberg and Hirschman, 1980)and was initially explored by geographers in the 1980s with regard to planning and retail develop-ment issues when traditional retailers piloted `push button' or domestic `view data' shoppingservices in Europe and North America (see Guy, 1985, and related papers in a special theme issueof Environment and Planning B: Planning and Design on ` Information technology in retailing'' 12139 ^ 220).

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significant organisational dilemma which may stimulate restructuring. This is discussedin theoretical terms below, providing a useful springboard for section 4 in which thefocus of the paper shifts `behind the web store' to determine the real spatiality ofthe e-tailing fulfilment infrastructure.

2.2 The organisational challenge of the electronic frontier` Just as [the] ... technologies of the railroad and telegraph enabled the transforma-tion of traditionally small businesses into a system of corporations, ... the Internethas the potential to bring about a similar reorganization of business structures.''

Zook (2000, page 412)

The Internet has opened up a new, dynamic space of consumption, unprecedented inits level of ubiquity, interactivity, fluidity, and speed (Kenney and Curry, 2001, page 59):attributes that may, in principle, require traditional businesses to redefine their orga-nisational structures and corporate strategy if they are to serve the consumer effectivelyin both physical and virtual space (Evans and Wurster, 1999a; Li et al, 2001; Rayportand Sviokla, 1995).

In the context of retailing, settling on the electronic frontier certainly seems tochallenge the design and function of existing organisational structures. When com-pared with the traditional retailer, who uses the physical store as the place of exchangeand the consumer as the mode of delivery, e-tailers are clearly responsible for anextended commodity chainöfrom the supplier to the consumer's home (Jones andBiasiotto, 1999). Notwithstanding the competitive advantages of mixing bricks withclicks, traditional retailers pursuing a multichannel strategy still face the logisticalchallenge of developing a physical fulfilment infrastructure that can effectively deliversingle commodities to the consumer. This scenario has the potential to disrupt thecommodity chain of retailers moving onto the electronic frontier of the Internet, whoare otherwise equipped to deliver multiple commodities (as stock replenishment) totraditional retail outlets (Peet, 2000, page 16):

`As physical retailers move online ... they also face challenges such as organisa-tional restructuring and the adaptation of the existing distribution infrastructureto the new requirements of the online market ... . This is due to the fact that theirdistribution systems are more geared to shifting pallets of goods from largewarehouses to store shelves. Selling over the web, on the other hand, requiresa ... system that can cater for the delivery of an individual package to a singlehousehold'' (Enders and Jelassi, 2000, page 546).

In light of this organisational dilemma, ``will traditional store-based retailers ... besufficiently flexible to take advantage of the opportunities which the new electronicchannels to market represent?'' (Wrigley and Lowe, 2002, page 92). To resolve thelogistical tensions between single and multiple order fulfilment, bricks-and-mortarretailers may theoretically initiate processes of disintermediation and reintermediation,which have inherently spatial implications.(5)

In this paper, these two processes are theorised in explicitly geographical terms:disintermediation is associated with the circumvention of space and the deconstruc-tion of places in the commodity chain of traditional retailing; and reintermediation isdenoted by the creation of new place-based intermediary functions in the space ofthe retailer ^ consumer interface. As a result of this potential for the organisational

(5) There is a burgeoning, largely management-oriented, literature concerned with the evolution ofbusiness structures in the Internet age through processes of disintermediation and reintermediation(for example, Bhatt and Emdad, 2001; Chircu and Kauffman, 1999; Tapscott et al, 2001). Unfortu-nately, much of this work remains detached from geography and fails to fully engage with thespatial dimensions of organisational restructuring. I seek to redress this imbalance.

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and geographical reconfiguration of the retail commodity chain, e-commerce moregenerally has been conceptualised as a disruptive technological innovation, whichradically breaks with the established business models of the sector (Christensen,1997; Christensen and Tedlow, 2000; Dhillon et al, 2001). However, before we moveon to a more detailed evaluation of organisational disruption in section 4, I wish atthis stage to sketch out the methodological rationale for a focus on Toronto.

3 Reading multichannel retailing through the lens of TorontoThis paper offers a situated `reading'öboth spatially and temporallyöof multichannelretailing through the lens of Toronto, in the spirit of calls for a multiperspectivalinterpretation of the space economy (Martin, 1994) and the retail landscape morespecifically (Wrigley and Lowe, 2002). Table 1 profiles the companies that wereconsulted during the research: the sample was based upon an industry-recognisedranking of Canadian e-tailers (Dawe and Evans, 2000). Figure 1 locates the corporateheadquarters of each retailer in the Toronto region. These companies are leaders inthe principal market sector, though there are indeed competitive overlaps. Given thedisparities in the size of the organisations, the paper is explorative rather thancomparative. The choice of companies is intended to reveal the geographical andorganisational contextuality of e-tailing operations within idiographic product sectorsor corporate-market `situations'.

Canadian e-tailing provides a compelling area of research for the new retailgeography. The sales from e-tailing are still marginal to those from traditionalretailing, comprising only 0.4% (Can $11 billion) of operating revenues in 2000, butonline sales are now entering `hypergrowth' (Statistics Canada, 2001). In combina-tion with business-to-business (B2B) transactions, Canadian e-commerce is projectedto rise to Can $93.67 billion by 2003 (Boston Consulting Group, 2000; quoted inJanelle, 2001). This growth has been facilitated by an extensive telecommunications

Table 1. Profiles of the Canadian multichannel retailers as at August 2000.

Company Number of Web store Primary Secondarytraditional retail address and market marketoutlets in Canada a date of opening sector sectors

Chapters b 300 http://www.chapters.ca Books Music, video,April 1999 software

Danier 75 http://www.danier.ca Leather and Clothing,Leather November 1999 suede apparel accessories

Henry's 5 http://www.henrys.com Specialised NotJuly 1999 photography applicable

and filming

HMV North 97 http://www.hmv.ca Music Video andAmerica July 1999 software

Radio Shack 470 http://www.radioshack.ca Electronics SoftwareCanada September 1999

Sears Canada 2500 http://www.sears.ca General NotJanuary 1999 merchandise applicable

aOutlets directly controlled or franchised by the company.bChapters merged with Indigo books in August 2001: the web store is now http://www.chapters.indigo.ca.

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infrastructure, relatively cheap Internet access costs compared with other G7 countries,and a progressive policy environment for e-commerce.

Over 50% of Canadians now have access to an Internet Service Provider (Dryburgh,2001): this represents the highest per capita level of Internet usage in the world(Michalak, 2000, page 11). Canada also leads the world in broadband penetration,with approximately 10% of Internet users having access to a high bandwidth connec-tion (Boston Consulting Group and Retail Council of Canada, 2000, page 4). Giventhe growing significance of wireless Internet services and `m(obile)-commerce'(through, for example, personal digital assistants or palmtop computers), it is alsoimportant to note that the Internet is potentially accessible to over 90% of Canadiansvia two national cellular telephone networks. Further, Industry Canada is collaborat-ing with provincial and territorial governments to actively develop Internet access inremote, rural, and disenfranchised urban areas. In sum, as Janelle (2001) notes,

`Canada is well served with the infrastructure needed for internationally competitiveelectronic commerce. A centrepiece strategy is the Canadian Network for theAdvancement of Research, Industry and Education. CANARIE promotes collab-oration among more than 500 industry, academic, and government participants ... .These high-tech and knowledge-based collaborators [are] served by a fast opticalfibre national network (CA*net3) at more than 40 gigabits per secondöroughly 16times faster than the fastest current initiative in the United States (the Abelinenetwork)'' (page 49).Despite these propitious circumstances, retail analysts have expressed concerns

about the performance of Canadian e-commerce. In particular, over the past threeyears, Canadian multichannel retailers have faced sporadic difficulties in the effectivefulfilment of online shopping orders, leading many consumers to patronise US websitesinstead (Andersen Consulting, 1999; Boston Consulting Group and Retail Council of

A ChaptersB Danier LeatherC Henry'sD HMVE RadioshackF Sears

0 50 km

Figure 1. The geographical location of the corporate headquarters.

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Canada, 2000; JC Williams Group, 1999).(6) As the financial capital, and hence the keylocation for the command-and-control functions of leading Canadian retail companies,the Toronto metropolitan region provided a valuable lens through which to explore theimpact of e-tailing fulfilment upon the geographical organisation of formerly bricks-and-mortar retailers. An effective e-tailing fulfilment process is particularly importantin this province because of the concentration of Canadian online shoppers here: in2000, Ontario accounted for 40% of Internet users and 54% of e-tailing sales revenues(figure 2). Indeed, Internet retailers have tended to focus their marketing efforts onToronto, which is the single largest Canadian retail market.(7) The research was com-pleted between July and August 2000 and involved two overlapping phases of empiricalwork, as outlined in sections 3.1 and 3.2.

3.1 Macroscale researchI organised meetings with members of the Retail Council of Canada, the RyersonCentre for the Study of Commercial Activity, and numerous management consultancyfirms, to access the latest research into Canadian e-commerce and to develop a web ofcontacts throughout the retailing community within the time available for research.Face-to-face communication, and the building of an informal rapport at lunches andreceptions, essentially proved to be more effective `networking' tools (Thrift, 1994) thanthe tsunami of e-mails, faxes, and telephone calls I completed between February andJuly 2000.

(6) In this paper I do not claim to evaluate the logistical efficiency of e-tailing fulfilment, which hasbeen explored in more depth elsewhere [see Murphy (2002b) and the extensive work of researchersat the Helsinki School of Economics (for example, Kamarainen et al, 2001; Punakivi and Saranen,2001; Raijas and Tuunainen, 2001)], though the following analysis will hopefully shed some light onthe general logistical foundations of the fulfilment process.(7) I had hoped to provide a more detailed view of Internet use within the Toronto metropolitanarea, but data at this spatial scale are currently unavailable.

60

50

40

30

20

10

0

Percentage

Sales revenueInternet households

Province

Ontar

io

Britis

h Colu

mbia

Alber

ta

Quebe

c

Manitoba

Saska

tchewan

NewBrunswick

Nova

Scotia

Newfo

undla

nd

Prince

Edward

Figure 2. The provincial distribution of Internet households and e-tailing sales revenues acrossCanada (in percentage terms) (source: adapted by author from Boston Consulting Group andRetail Council of Canada, 2000, page 5).

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3.2 Corporate-level researchDuring the process of macroscale enquiry, I identified important conceptual themesand sketched out a preliminary research agenda. This broad framework was tested andrefined through three pilot interviews in late July with Chapters (interviewee 1öITsystems), Danier Leather (interviewee 6ösales and marketing), and Sears (interviewee14öIT systems), which led to the formulation of a final interview plan (a simplifiedoverview of this plan is provided in the appendix).(8) Recorded, semistructured, andextended interviews (varying between 60 and 135 minutes) were then conducted withboard-level management personnel responsible for various aspects of the e-tailingoperation. All interviews were conducted at the corporate headquarters (figure 1).

Interviews skewed towards a particular aspect of the research depending upon theexpertise of the respondent. The number of interviews within each company variedaccording to the size of the organisation, and depended upon the availability ofmanagement during the research period. A series of supplementary discussions (lastingbetween 15 and 45 minutes) were held with the relevant personnel to clarify any out-standing issues; and guided visits (lasting between 2 and 3 hours) of company facilitiesprovided further data (in the form of observational field notes, recorded in shorthand)on the fulfilment infrastructure of e-tailing.(9)

The semistructured interview format weaved a sensitive path onto a relativelyuncharted theoretical and empirical terrain, providing a coherent yet recursive frame-work for discussion (Schoenberger, 1991, page 181). An ethnographic approach of thiskind, combining qualitative interview techniques with observational field notes, canilluminate the cultural and technical contextuality of e-commerce operations (Avgerou,2001; Miller and Slater, 2000).

The recording of the discussion essentially acted as an informal nondisclosureagreement between the interviewees and myself: it was understood that the interviewtranscripts could be used in any potential publication, but this also meant that certainresponses were constrained by the recording, thus reducing the depth of the qual-ititative data set (compare Byron, 1993, pages 384 ^ 385). The efficacy of the interviewswas also constrained by the corporate spatiotemporal setting, in which distinctresearcher ^ subject power relations were forged (Hammersley, 1992). Many of theparticipants exerted a pseudo-managerial control over the discussion, especially giventime constraints and the need to deal with impending management tasks during themeeting. I sought to alleviate these empirical challenges prior to each interview bye-mailing an outline of the research objectives, and by developing a wide-rangingknowledge of each company, in order that the allotted time was used efficiently andto reach a collaborative yet relevant dialogue.

Interview transcripts were analysed using the coding procedures recommended byCook and Crang (1995, pages 80 ^ 92): the responses were continually reread, sorted,tagged, and juxtaposed on key issues. Excerpts from these transcripts, together withmy own observational field notes, are intended to be illustrative rather than exhaustive.Both these types of ethnographic data are incorporated into the remainder of the paper to

(8) This research forms part of a broader investigation of Canadian e-commerce: therefore, theappendix has been cut out of a more extensive interview plan, which explored issues such asthe construction and display of the web store as a virtual landscape of consumption (Currah,2002a). One of the original research objectives was to map the spatiality of Internet consumptionthrough the lens of each retailer by delineating the origin of customers at urban, national, andinternational scales. This line of enquiry was abandoned because the retailers were unwilling todivulge the volume or location of sales.(9) Field notes were completed on foot in the form of shorthand `scratch' notes. These weresubsequently written up in detail after each site visit had finished.

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articulate a polyphonic narrative of the multichannel organisation, from the perspectiveof the `researcher' and the various `social asset structures' that make up corporatemanagement (Schoenberger, 1994). Table 2 outlines the research schedule, listing thedate and purpose of each meeting with pseudonyms (to preserve anonymity) describingthe general corporate responsibilities of each participating `voice'.(10)

4 Behind the web stores: disintermediation and reintermediation in the urban space ofToronto?In this section, the paper focuses on the spatiality of the e-tailing fulfilment infra-structure behind the web store of the six multichannel retailers: Chapters, DanierLeather, Henry's, HMV, Radio Shack, and Sears. Specifically, I evaluate the impactof the `Internet commodity chain' (from the electronic order being submitted to thefinal delivery of the product) upon the geographical organisation of these retailers andidentify evidence of the disintermediation and reintermediation of space and place withreference to the urban landscape of Toronto. The concept of the commodity chain' isapplied here in a more restrictive sense than recent analyses which have sought tospatialise the commodity chain from ` conception and design, through production,retailing and final consumption'' (Leslie and Reimer, 1999, page 404) as delving intothe production and supply of commodities was clearly beyond the scope of theresearch. The physical places that constitute the fulfilment infrastructure of e-tailingare spatialised as sequentially linked stages (compare Jackson and Thrift, 1995) insector specific Internet commodity chains (figure 12, see section 4.4): submitting theelectronic order; warehousing; distribution, exchange, and product returns.(10) The views of the interviewees listed in table 2 do not necessarily reflect those of the respectivecompany.

Table 2. Research schedule: interviewees, corporate responsibilities, and details of each meeting.

Company Corporate responsibility Supple- Guided Inter-mentary tour of viewee

customer information logistics sales and discussion? facilities? numberservice technology marketing

systems

Chapters 11 August 14 August 114 August 22 August 222 August 22 August 3

14 August 4

Danier 4 August 21 August 5Leather 4 August 21 August 4 August 6

Henry's 17 August 17 August 7

HMV 18 August 8North 18 August 18 August 9America 17 August 10

Radio 24 August 24 August 11Shack 24 August 12Canada

Sears 9 August 13Canada 11 August 14

25 August 1525 August 1625 August 25 August 17

9 August 18

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4.1 Submitting the electronic orderThe web stores provide consumers with the opportunity to purchase goods at anytime, from any location with a personal computer and access to the Internet. Apartfrom Henry's the companies have also installed `kiosks' throughout the existingnetwork of physical stores, which provide online access to the web store and facilitateInternet ordering within the traditional retail environment. This policy of integra-tion between the physical and the virtual is being tested by Danier Leather andSears, but has been widely implemented by Chapters, HMV (figure 3), and RadioShack.

The kiosks not only allow consumers to order an item that is unavailable in thephysical store, bringing the seemingly infinite product selection of cyberspace in-storeand improving customer service (Wrigley and Lowe, 2002, page 241), but also containan interactive multimedia database in which consumers can learn about products orspecial retail offers (see Slack and Rowley, 2002). Chapters have developed the kioskconcept further by inserting computer terminals into existing in-store cafes run byStarbucks, where consumers pay Can $2 per hour to browse the Internet. Thus,although a potent symbol of dematerialised consumption, e-tailing is actually becom-ing embedded within physical places of consumption and conviviality (Wakeford, 1999;

Figure 3. HMV Internet kiosk (source: author's photo).

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Wrigley et al, 2002). Emerging cyberspatial technologies are being appropriated,negotiated, performed (Green, 2001; Holloway and Valentine, 2001), and, in the process,materialised as fundamentally sociocultural artefacts (Thrift, 1996). In the case of Chap-ters' cyber cafes', this process of material embedding has not created a new physicalplace per se but has added a novel twist to the inherent embodiment and perform-ativity pioneered in the Starbucks stores (Smith, 1996).(11)

Whether from a consumer's home or an in-store kiosk, all electronic orders aresubmitted to the `server' that hosts the web store. Danier Leather, Henry's, HMV, andSears have subcontracted the server and its maintenance to organisations offering`Internet technology solutions' such as Cisco or IBM. In comparison, Chapters andRadio Shack have integrated the server into the premises of the existing head office inToronto.(12) The servers verify payment through credit-checking agencies before theorder proceeds to be fulfilled.

4.2 WarehousingThe orders collected by the server are electronically `uploaded' to an inventory man-agement system situated within a warehousing facility. These warehouses were inoperation prior to the move into e-tailing, supplying inventory to the entire physicalnetwork of retail stores across Canada (table 3, see figure 1 for specific places). At thisstage of the commodity chain, the online order is picked, packaged, and despatched tothe consumer. The logistics of warehousing are thus a major component in the fulfil-ment of e-tailing. I now discuss the impact of e-tailing upon the microgeographies ofthis physical place by using interview data, observational field notes (in italics), andschematic flow diagrams.(13) In general, what can be noted is that e-tailing has incurredminimal disruption to the warehousing infrastructure. The antecedent logistics of thefacilities, varying considerably in size and technological complexity, have been ableto integrate the online (individual e-tailing shopping orders) with the offline (bulkreplenishment of stock to the network of traditional retail outlets or to other corporatecustomers).

Table 3. The geographical location of warehousing facilities.

Company Location of primary Location of secondarywarehousing facility warehousing facilities

Chapters BramptonDanier Leather Toronto (at HQ)Henry's Toronto (at HQ)HMV MississaugaRadio Shack Barrie (at HQ)Sears Belleville Regina, Saskatchewan a

a This warehouse replenishes stores and fulfils e-tailing/mail order requests in the westernprovinces.

(11) Starbucks is now planning to expand the cyber cafe concept further by installing Internet accesspoints for laptop computers across its portfolio of retail units in the USA and Canada.(12) It is interesting to note that many e-commerce operators, C2B, B2C, and B2B, are nowlocating their web server in spaces that offer a higher level of security than the corporate head-quarters, ranging from offshore island states, through disused sea forts or oil rigs, to ex-Cold-Warintercontinental ballistic missile silos, which protect the web site from hackers and may also offera favourable regulatory environment, mainly in the form of reduced taxation liabilities (seeGraham, 2001).(13) New stages in warehousing logistics that have been created by e-tailing are shaded on theschematic flow diagrams. Unfortunately, cameras were not permitted in any of the facilities.

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4.2.1 ChaptersThe server transmits orders to the warehouse every hour, which is called PegasusWholesale and majority-owned by Chapters. ``This is currently the largest book whole-saling operation in Canada'' (Interviewee 2ölogistics). Pegasus can stock over500 000 book titles, plus around 20 000 DVDs and VHS items, 15 000 CDs, and 1500software programs. All orders (online and offline) are sorted according to the locationof the product in the facility (figure 4). ``Bar-coded pick sheets are printed within fivezones as the hourly orders come in, combined with other [offline] orders ... . Thesesheets are scanned with a ... hand-held device, which tells the picker to follow astatistically optimal route around the facility'' (interviewee 3ölogistics). The collecteditems are boxed per order and bar-coded, then transferred to a conveyor system ... .Overhead bar-code scanners ... separate online orders, diverting these boxes to a newarea for packaging and despatch. I was impressed by the safeguards in place to preventincorrect online orders. The warehousing computer system has records of the weight ofall items in stock, so each box is weighted en route to the online despatch zone, and thisis ... tallied against the original orderöif there is a discrepancy, the order is redirectedwithin seconds for repicking and repackaging.

4.2.2 Danier LeatherOnline orders are fulfilled ... in an impromptu fashion. The item is picked from thewarehousing inventory by Internet sales staff and then packaged in a small Internetfulfilment area located next to, but visible from, the factory outlet store, in the samepremises as the corporate headquarters. The company has installed seven video camerasinto this factory outlet, which are linked to the web store to provide a real-time view ofthe physical store from different angles (but currently without audio). ``What makes usso interactive is that customers can actually see their order being picked from theshelf then packed ... in real-time ... over the web cameras'' (interviewee 5öcustomer

1

3 2

4

79 10

5

6

8

1 Submission of online orders2 Offline orders3 Central stock inventory system4 All orders sorted by location5 Pick sheets printed in zones6 Picking process7 Transfer to conveyor system8 Incorrect orders returning to picking zones9 Online distribution area

10 Offline distribution area

Figure 4. Chapters' warehousing logistics.

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service) (figure 5).(14) If an order is unavailable in the warehouse, an employee willactually drive to the nearest retail outlet to collect the item, which is then despatched asnormal from the headquarters (figure 6).

4.2.3 Henry's` E-com[merce] ... neatly slotted into the catalogue business Henry's has developedover the past thirty years'' (interviewee 7) (figure 7). Each morning at 11am, Internetand catalogue orders are printed out from the server, picked, and then packaged in thewarehouse, which is a ... smaller facility compared to the others I have visited so far, and

Figure 5. A real-time image of the Danier Leather picking process in the factory outlet store asviewed through the web store (source: http://www.danier.ca).

(14) During the research, I was generally unable to obtain permission to photograph in-storelocations. Webcams such as that in figure 6 therefore have considerable methodological value asthey facilitate continuous visual access to retail spaces in foreign locations, while also potentiallyreducing travelling expense claims! Moreover, these kinds of electronic surveillance raise someintriguing questions relating to consumption, performativity, and space: for example, to whatextent are consumers' behavioural patterns influenced by the presence of webcams (which in thiscontext exhibit many of the fundamental characteristics of the Foucauldian panopticon, given thatit is impossible to determine whether anyone is watching and from where in the world)?; in turn,how might webcams be used by management to monitor the embodied performances of salesstaff?; and last, to draw upon Crang's (1994) insights, how is the performativity of retail display,in particular the spatiality of front and back regions, translated from physical (and reinscribed in)to virtual retail space through these new technological assemblages of hardware and software?

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located beneath the flagship retail store in Toronto, also the corporate headquarters. `Allpicking is based on experience on where the products are kept ... no fancy stockkeeping technology here'' (interviewee 7ösales and marketing). If out of stock in thewarehouse, the order is picked direct from the shelves in the retail outlet, then takendownstairs to be packed and sent off to the consumer.

4.2.4 HMVThe server uploads online orders to the warehouse, in Mississauga, every hour all day. Asite visit was not permitted, due to construction work at the time of research, thoughinterviewee 9 (logistics) did provide a general overview of this stage in fulfilment (figure 8,over). Similar to Chapters, the logistics of the warehouse merge the inventory between

1

3 2

4 5

6

7

1 Submission of online orders2 Telephone and mail orders3 Central stock inventory system4 Picking process in warehouse5 Picking process in physical retail outlet6 Inspection and packaging7 Distribution to consumer

Figure 7. Henry's warehousing logistics.

1

3 2

4 5

6

7

1 Submission of online orders2 Traditional retail sales data3 Central stock inventory system4 Picking process in warehouse5 Collection from physical retail outlet6 Inspection and packaging7 Distribution to consumer

Figure 6. Danier Leather's warehousing logistics.

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online and offline: pickers operate in demarcated zones using hand-held scanning devices ... .E-tailing has also created a new place in the commodity chain. Orders that are unavail-able in the warehouse are e-mailed to an `Internet Fulfilment Centre', located beneath anHMV retail outlet in Toronto. This place illustrates the mundane work that can actuallyoperate behind the technological gloss of the web store: ` its ... always cluttered inhere ... orders are picked from shelves in the store on an ad hoc basis, and then takento the postal service by hand ... . So long as we get the CD, the DVD, whatever, to thecustomer quickly, no one cares what's behind the scenes'' (interviewee 8ölogistics).

4.2.5 Radio ShackThe server uploads online orders to the warehouse every day at 4 am. The facilityreplenishes physical retail outlets as separate units: ` we fulfil the web store just likeany of our other stores, except it's at the beginning of each day'' (interviewee 12ösalesand marketing). The potential discrepancy between bulk and individual orders has beenreconciled through the pre-existing `pick-to-light' system (figure 9). Bar-coded pick sheetsare printed in four aisles: when the sheets are scanned, lights illuminate along the aisle toshow items for collection. ` This system can easily handle multiple and individual orders''(interviewee 11öcustomer service). The products are then placed onto a conveyor systemand scanned, with online orders being sent to a dedicated packaging and distribution area.Incorrect e-tailing orders are identified manually, and repacked the next day.

4.2.6 SearsE-tailing has not required any logistical adjustments in warehousing due to the existenceof an infrastructure equipped to fulfil orders from catalogue shopping. ``The move intoe-commerce was straightforward. Online orders are treated the same as mail or tele-phone orders'' (interviewee 16ölogistics). Depending upon the geographical destinationof the customer, catalogue and Internet orders are uploaded to either of two warehouses(in Belleville, Ontario, or Regina, Saskatchewan) daily at 11pm. Proximity to Torontomeant that the former could be visited during my research (figure 10). Bar-coded pick-sheets are printed in four zones around the facility. Like Chapters and HMV, hand-helddevices are used to collect items along an optimal route. The orders are then sent byconveyor to a central distribution area (interviewee 17ölogistics).

1

3 2

4 5

6 6

7 7

1 Submission of online orders2 Telephone retail sales data3 Central stock inventory system4 Picking process in warehouse5 Picking process in physical retail outlet6 Inspection and packaging7 Distribution to consumer

Figure 8. HMV warehousing logistics.

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4.3 Distribution, exchange, and product returnsTheoretically, commodity exchange is the bringing of the product to market. Ine-tailing, as is the case with any form of remote shopping, the market value of thecommodity is realised before entering the possession of the consumer: that is to say,when the order is despatched from the warehouse and the consumer's credit card ischarged. The companies then deliver the commodity to the consumer through a range

1 Submission of online orders2 Traditional retail sales data3 Telephone and mail orders4 Central stock inventory system5 All orders sorted6 Pick sheets printed in zones7 Picking process8 Transfer to central conveyor system9 Packaging and distribution to consumer

1

5

2 4 3

6

7

8 9 8

Figure 10. Sears' warehousing logistics.

Incorrect orders1

3 2

4

6

7

8

1 Submission of online orders2 Traditional retail sales data3 Central stock inventory system4 All orders sorted by location;

pick sheets printed in aisles5 Picking process6 Transfer to central conveyor system7 Inspection and packaging8 Distribution to consumer

5

Figure 9. Radio Shack's warehousing logistics.

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of distribution channels. For Chapters, Danier Leather, Henry's, and HMV, the mostpopular delivery option has been via Canada Post or courier (Federal Express, SameDay, and United Parcel Services).

Consumers at Radio Shack and Sears have instead embraced the companies' offerof free delivery to any retail outlet in Canada. The order is simply incorporated intothe standard process of store replenishment, reflecting the potential for integratingindividual online orders with mass stock orders. For Sears' customers, this has provedparticularly convenient. The company operates an extensive network of 2500 `pick-up'points across the country: businesses act as `agents' for Sears (ranging from dry-cleaners to supermarkets) and are paid a small commission for the volume of salesdistributed through the premises (interviewee 15ölogistics).(15) The integrationbetween the physical and virtual is made clear with product returns in the case ofeach retailer. Online shopping orders can be refunded or exchanged at any retail outlet.The companies also permit the consumer to send products directly back to the ware-housing facility, where the item is inspected and then reentered into the stock inventorysystem. In Chapters, HMV, and Sears, online product returns have been managedthrough preexisting depots.

Furthermore, with the exception of Radio Shack, the companies were affiliates toEmpori.com. This business provided a pioneering distribution service that allowedconsumers to receive the product on the same day if the order was placed before12 pm. At the checkout in the web stores, consumers were given the option to deliverthe order to any of the seven Empori `depots' located in downtown Toronto. Emporicollected orders direct from the retailer's warehouse. On arrival at the depot, con-sumers then used their credit card to access the online order from a secure locker(figure 11). Empori was also equipped to manage product returns and exchangesthrough each of the depots. Although the business has now ceased operations because

Figure 11. Empori store (source: author's photo).

(15) The specific level of the commission was stated in the interview but cannot be reproduced here.

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of poor financial performance, Empori usefully illustrates the potential created bye-tailing for new organisational models and how the process of reintermediation isactually inscribed upon the urban landscape.

Chapters, HMV, and Radio Shack operate in market sectors where the `digitaldelivery' of virtual products is feasible. Consumers can purchase a limited selection ofe-books', compressed (MP3) music albums, or software programs from these web storesand then download the product direct to the hard disk, thereby disintermediating theentire process of physical fulfilment and transcending urban space.

Unlike atom-based material products, which require a physical fulfilment infra-structure to reach the consumer, bit-based virtual products such as those discussedabove ` can be sought out, transacted, transported and consumed all within the elec-tronic space'' of the Internet (Li et al, 2001, page 711; see also Negroponte, 1995). Thisis iconic of the `weightless economy': the exchange of an ``economic good whoseownership cannot be transferred or traded, but simply replicatedöand at almostno transmission cost, in almost no time'' (Coyle, 1997, page 3). Digital delivery inthis sense is clearly compatible with the imperatives of flexible accumulation, renderingcommodity exchange nearly instantaneous (depending on bandwidth speeds) andunshackling virtual products from the physical commodity chain. Despite the fundamen-tal appeal of such `virtual logistics' (Crowley, 1998), interviewees expressed considerabledoubts about the future threat of digital delivery to traditional retailing:

` e-books will only ever be a niche in the traditional book sector. They're nothing toget too excited about. People still want the feel, the smell even, of a real book''(interviewee 4ösales and marketing).

` I can't imagine anyone giving up a record collection, or the pleasure of buying aCD, for ... electronic files on a hard disk'' (interviewee 10ösales and marketing).

`Our customers generally still prefer a physical product, a solid software package.We've been ... disappointed with the uptake of digital downloads so far ...''(interviewee 11öcustomer service).However, e-tailers cannot afford to ignore either the opportunities or the threats

presented by digital delivery. This paper is written in the context of widespreadnarrowband Internet access. Products generated from musical, textual, or visual dataare increasingly being reduced in size using the latest software compression technol-ogies, which enables, in tandem with the ongoing diffusion of broadband Internetservices across the developed world, even faster distribution over the Internet. Elec-tronic commodities are therefore having significant impacts upon the geographicalorganisation of the music sector, the publishing industry, and the motion pictureindustry (Kahin and Varian, 2000; Leyshon, 2001; Zhu, 2001). The rise of electroniccommodities may threaten the disintermediation of retailers in both physical andvirtual space by facilitating direct interaction between cultural producers and con-sumers. For instance, in autumn 2001 the major studios announced plans to launchvideo-on-demand websites (which bypass retail intermediaries) to deliver digital filmcontent direct to broadband Internet users around the world (see Currah, 2002b).

Yet the efficacy of direct marketing strategies between manufacturers and con-sumers remains heavily debated, and therefore deserves some elaboration with respectto the future of multichannel retailing in Toronto. Digital delivery is unlikely tosupplant the multichannel retailer, who can leverage the power of the preexisting brandto invoke feelings of quality, trust, and reputation among consumers on the Internet(Boston Consulting Group, 1999; Forrester, 2000). In addition, recent research intoelectronic markets has revealed that, rather than stimulating widespread disinter-mediation through lower transaction costs, e-tailing is actually generating inherently

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new intermediary functions such as aggregators, price-comparison sites, or one-stopshopping agents. This reintermediation dynamic has been witnessed with the explosionof `infomediaries' in a range of commodity chains (Sarkar et al, 1998) in what hasbeen otherwise termed a process of `cybermediation' (Carr, 2000) or `polymediation'(Tapscott et al, 2001).

Infomediaries, or C2B e-tailers, perform an entirely new role by acting as gateways,portals, or search engines that connect a selection of B2C e-tailers with the consumer(Wrigley et al, 2002). These `virtual malls' are merely composed of `shop fronts', eitherlisted or graphically represented, which are electronically linked to the home pages oftenant retailers.(16) The tenants pay a flat-rate fee, or a sales commission (calculatedaccording to the revenue accrued from `clicks' in the portal), to the operator of themall (Kenney and Curry, 2001). Infomediaries enhance the efficiency of electronicmarkets by aggregating transactions to create economies of scale and scope (Sarkaret al, 1998, page 215). In spite of their ostensibly informational and virtual role, whichis simply performed from web servers, C2B e-tailers still retain a corporate materialityin geographical spaceöas nodes in the physically grounded web of Internet contentproduction (Zook, 2000).

4.4 Summary: putting retail cyberspace in its place(s)Whilst e-tailing offers a technologically innovative and flexible mode of retailing, behindthe electronic space of the web store, the physical places that constitute the Internetcommodity chain have remained geographically integrated with those of traditionalretailing. The potential for spatial processes of disintermediation and reintermediationhas therefore been limited. From in-store kiosks to product returns, the companies havefused the online with the offline. This strategy of organisational integration has beenfuelled by the ` voracious appetite businesses have for new organisational paradigms''(Leyshon, 2001, page 56) which are packaged by management consultants (for example,Accenture, Boston Consulting Group, Forrester) as normative solutions to the strategicchallenge of e-commerce. This is another useful reflection of `virtualism', a scenariowhereby ` the economy is increasingly forced to change itself in order to match thedescriptions of abstracted models that are produced by academic economists'' (Miller,2000, page 201). The six multichannel retailers have `leveraged' the preexisting infra-structure (to use the latest consultancy jargon) in order to ensure effective fulfilmentand to provide a comprehensive shopping service in which customers can moveseamlessly between the urban and virtual spaces of retailing:

`There is very little tension between the Chapters stores and the web site becausewe've designed our relationship so that its mutually beneficial, ... where they con-nect is where it makes sense ...'' (interviewee 2ölogistics).

`The consumer wants ... transparency ... so that you can buy online and bring theitem back to the store; ... so that you can go into the store, and order a productover the kiosk if its not in stock. ... it's a logical integration'' (interviewee 6ösalesand marketing).

`The real goal in [e-commerce] is making sure that the web site complements,and has channel harmony with, the retail stores'' (interviewee 12ösales andmarketing).

(16) A selection of virtual malls was operating in Canada at the time of the research. For example,http://www.canadashop.com, http://www.cdn-mall.com, http://www.excite.ca, http://www.shop.net,http://www.shop.canoe.ca, http://www.shopcanada.com.

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` I think the future has to be in integration. ... I think you have to look at ourcompanyöyou have to look at the combination of the retail stores, the cataloguebusiness, and the Internet business, and look at them as one'' (interviewee 18ösales and marketing).The extent of organisational and spatial integration is evident in figure 12 (see over),

which identifies (in italics) the paucity of new physical places that the Internetcommodity chains have generated. The warehousing infrastructure has been pivotalto this integration. In all companies, the selection, picking, and packaging of e-tailingorders were effectively inserted into the antecedent technical logistics of the facility.Internet retailing had a more discernible impact in those warehouses that were notpreequipped to fulfil catalogue orders: as such, new packaging and distribution areashad been created to manage single orders, but at relatively low cost and with minimaldisruption.

In terms of the future evolutionary trajectories of multichannel retailing in Toronto,corporate philosophies were evidently committed to the integration and mutual con-stitution of online and offline. E-tailing will continue to serve as a ` complementaryniche for the physical retail outlets'' (interviewee 4ösales and marketing). Consumerswill have the convenience and novelty of shopping online while still being able toreturn or exchange products to the physical store, ` where close relationships betweenthe vendor and customer are, after all, born'' (interviewee 12ösales and marketing);but the traditional retail environment is explicitly prioritised in future investmentstrategies (interviewees 4, 6, 7, 9, 12, and 14). As a space of embodied and tactileperformance, sociality, and serendipitous purchases, the traditional store will certainlyremain the principal marketing channel for these and other multichannel retailers(Miller, 1998; 2001).

5 ConclusionsIn this paper, I have attempted to read the geographical contours of the multichannelretailer, under specific corporate-market situations, through the lens of Toronto. Thecentral argument is that the ostensibly `new' retail geographies of B2C e-commerceöas manifested in the multichannel organisational paradigmöare not as unique asrecent excitement surrounding the `new e-conomy' implies. Certainly, the impact ofInternet technology on retailing is unprecedented in at least four ways. First, the webstores have the capacity to stock a seemingly infinite selection of goods, unconstrainedby shelving capacity, as in the traditional outlet, though ultimately limited by ware-housing size (Dodge, 2001). Second, the web store constitutes a highly dynamic virtuallandscape of consumption (Currah, 2002a), which can be immediately updated accord-ing to the changing nexus of supply and demand or even (re)displayed according tocustomised preferences (Evans and Wurster, 1999b).

Third, e-tailing has created a global market for all retailers, regardless of size, inwhich commodities can be purchased at any time from a single location. Fourth, theInternet radically empowers and mobilises the virtual flaª neur by facilitating instantprice comparisons between web stores at the click of a button. However, behind thetheoretical allure of an innovative consumption operating through electronic space,the case of B2C e-commerce in Toronto reveals how physical places within thee-tailing fulfilment infrastructure are actually firmly embedded within the landscapeof traditional bricks-and-mortar retailing. To conclude the paper, I therefore considerthe key findings of the Toronto research within the context of two areas of debate ineconomic geography and identify some alternative conceptual questions arising fromthe multichannel organisational paradigm.

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Stages in Chapters Danier Leather Henry's HMV Radio Shack Searsfulfilment

Submitting theelectronicorder

Warehousing

Distributionand exchange

Productreturns

Server Server Server Server Server Server

Pegasus

Empori Empori Empori EmporiRetail outlets

Empori

Retailoutlets

Warehouse Warehouse Yonge Warehouse Warehouse Warehouse

Courier Courier Courier Courier Courier Courier

Agents

Dashed line: digital delivery * Server updates stock levels from warehouseItalics: new physical place ** Products sourced from nearest retail outlet if unavailable in warehouse

Consumer Consumer Consumer Consumer Consumer ConsumerRetailoutlets

Retailoutlets

Retailoutlets

Retailoutlets

Retailoutlets

Retailoutlets

Canada Post Canada Post Canada Post Canada Post Canada Post Canada Post

Productreturnsdepot

Productreturnsdepot

Productreturnsdepot

Personal In-storecomputer kiosk

Personal In-storecomputer kiosk

Personal In-storecomputer kiosk

Personal computer Personal computer Personal computer

Street

* * * *

**

Figure 12. Diagram to represent flows across space and embedded places within the Internet commodity chains. Arrows indicate the flow ofonline orders across space and between stages rather than physical places per se. For example, there is no interconnecting arrow from thewarehouse to courier service or Empori.

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5.1 The organisational and spatial implications of new information technologies for theeconomic landscapeOn the basis of the research presented here, it is highly doubtful that e-tailing constitutesa `paradigm shift' in the history of retailing (Dawson, 2000): in the sense that Internettechnology has neither produced a new `space ^ technology' nexus (Swyngedouw, 1992)in the geographical organisation of the sector nor has it resulted in the devaluationoföand disinvestment inöthe commodity chain of traditional retailing (compareHarvey, 1982, page 377), although the competitive basis of retailing has certainly beenredefined. The adoption of B2C e-commerce has incurred minimal organisationaldisruption among the six retailers. The spatial outcome can be characterised as ageography of integration between online and offline. There is little to be found in thephysical places of e-tailing fulfilment in Toronto that is fundamentally unique. In fact,the evidence from Danier Leather, HMV, and Henry's revealed that the technologicalgloss of the web store is underpinned by surprisingly prosaic and mundane workingpractices. This stands in contrast to the impressive warehousing logistics imple-mented by Chapters, Radio Shack, and Sears; but in principle, and regardless ofthe level of technological complexity in online-offline integration, e-tailing is merely anelectronically revamped model of catalogue selling.

Indeed, the compatibility of e-tailing with the preexisting infrastructure of Henry'sand Sears draws an intriguing parallel between B2C e-commerce and catalogue shop-ping (Rosen and Howard, 2000; Sauer and Burton, 1999). As Fernie (1997) suggested,e-tailing effectively requires a logistical network comparable with that developed formail order operationsöan organisational model of selling that can be traced back to1872 when Montgomery Ward and Company launched the first general mail ordercompany in North America (Cronon, 1991; Schlereth, 1989). Driven by the samecapitalist logic as the catalogue, shopping over the Internet is simply the latest com-mercial innovation designed to annihilate space by time, although operating within thefluidity of electronic space rather than the fixity of catalogue pages. Nevertheless, itwould be simplistic to reduce multichannel retailing to a singular organisationaltypology. In Toronto, the evolution of each retailer from a bricks-and-mortar to abricks-and-clicks organisational paradigm was clearly influenced by incumbent,place-based, organisational and social asset structures. Moreover, as the next themeindicates, e-tailing has also diverged from the banality of the catalogue by generatingdistinctöthough still inchoateöprocesses through which physical space and place areboth disintermediated and reintermediated.

5.2 The enduring role of place to digital capitalismThis is a well-rehearsed area of debate in economic geography: for example, globalcities and offshore financial centres reflect the importance of place, either as an arenafor social interaction or as a favourable regulatory environment in financial cyberspace(Roberts, 1994; Thrift, 1994). However, the revalorisation of place remains a necessarytheme not only to uphold the axiom that innovations in telecommunications certainlydo not herald the `death of geography' (Cairncross, 2001; Quah, 1997; 1999), but also tocontinually refine our understanding of the evolving spatial configuration of the digitaleconomy (Leinbach and Brunn, 2001; Li et al, 2001). With the `space of flows' remain-ing embedded in the `space of places' (Castells, 1989; 1999), capital accumulationcontinues to be built upon material conditions and social relations grounded in place.First, the technological backbone of the informational economy; second, nodes ofstrategic control and hubs of exchange; and third, the location of managerial elites(Castells, 1996). The concept of nodes and hubs is particularly important to B2Ce-commerce.

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As the paper has illustrated, the cyberspace of B2C e-commerce remains bound bygeography: the e-tailing of material products depends on ` real-world spatial fixityöthepoints of access, the ... materiality of wires'' (Kitchin, 1998, page 387), as well asphysical hubs of distribution, technical logistics, and transportation to deliver thecommodity to the consumer, a process that is coordinated throughout by a corporatenode (Coe and Yeung, 2001; Wrigley, 2000). New place-based agents have also beencreated in the Internet commodity chain. This process of reintermediation is illus-trated by the C2B e-tailers, or virtual malls, and by the innovative service formerlyprovided by Empori, where time was effectively annihilated through space in a networkof depots that were intended to act as convenient pick-up points for people working indowntown Toronto. E-tailing is also set to generate new places in the fulfilment infra-structure of Canada Post and courier firms in the near future as consumer demandsfor online order tracking and effective channels for product returns take hold.

The emergence of the digital delivery of virtual products, however, reflects theparallel ability of e-tailing (and a related assemblage of technologies, revolving aroundsoftware compression) to disintermediate or efface geographical space and place.Thus, by circumventing and operating through physical place, e-tailing usefullyexposes the multidimensional interactions that entwine capital accumulation, tech-nology, and the city. Under the capitalist imperative, technological innovations suchas the Internet both annihilate and fixate geographical distance (Leamer andStorper, 2001): information technologies are perpetually recasting, not shrinking,space and place (Kirsch, 1995, page 544). Following Graham (1998), it is instructiveto approach e-tailing from what he terms a coevolutionary perspective on space, place,and information technology: that is to say, technological systems and material eco-nomic ^ geographical landscapes are recursively produced together.

5.3 Multichannel retailing and alternative themes for conceptual debate in economic geographyAdmittedly, this paper is no more than a snapshot, based upon a particular and perhapsunrepresentative case study, but academic research into e-tailing will only move forwardthrough the lens of grounded empirical investigations (Leinbach, 2001).(17) A sustainedstream of empirical snapshots of this rapidly evolving phenomenon will be required tobuild up the `bigger theoretical picture' of e-commerce operations (Miller and Slater,2000). The paper has merely focused on one aspect of this theoretical picture. Multi-channel retailing is evolving along a spectrum of spatial scales, from the global to thelocal, and presents economic geographers with an intriguing array of conceptualquestions. Here, I sketch four alternative themes for conceptual debate that were notexplored in the paper.

First, at a global scale, the leading retail transnational corporations (TNCs) areactively integrating B2C e-commerce into their established organisational structures,leveraging logistics systems, scale-related buying power, and store networks to max-imise the commercial opportunities of the e-tailing market (Wrigley, 2002). As a result,` to what extent does e-tailing have the potential to reconfigure the economic geog-raphies of globalising retail capital which developed in the late 1990s?'' (Wrigley, 2000,page 308). And to what extent does it provide retail TNCs with the opportunity toenter foreign markets via a virtual channel requiring significantly lower levels of capitaloutlay in comparison to the globalisation of bricks-and-mortar stores (Wrigley et al,2002)?

(17) As indicated above, for example with Chapters and Empori, the various corporate-marketsituations that I have explored in the paper have in some cases radically changed since the researchwas completed in summer 2000.

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Second, virtual products reinforce the globalising potentialities of e-tailing byremoving the need for a physical corporate presence in order to deliver digital contentto foreign markets (Yip, 2000). In the context of the multichannel retailer, what arethe spatial and regulatory dimensions of digital delivery to international consumermarkets? In particular, what are the logistical implications of heterogeneous foreigncensorship or taxation laws, alongside ethno ^ cultural ^ linguistic differences, for thereproduction and delivery of digital e-books, music, or movies? The regulatory land-scape of e-tailing has been surprisingly little explored but has compelling implicationsfor global retail activity, especially in terms of Internet taxation. How are multichannelretailers, particularly the TNCs, using the Internet ``to avoid taxation by redefiningthe point of sale and moving it towards the jurisdiction'' that offers the most appeal-ing regulatory environment (Li et al, 2001, page 712; see also Jones et al, 2000;Yip, 2000)?

Third, as a dynamic technology undergoing recurring phases of innovation andadaptation (Holsapple and Singh, 2000), what are the ramifications of e-commerceadoption for the economic geographies of knowledge (tacit and codified) within thefirm or for existing processes of organisational learning (compare Amin and Cohendet,1999; French, 2000; Wood, 2002)? Is e-tailing being spun off into a separate organisa-tional structure (as proposed by Christensen, 1997), where the specialised knowledgeand skills required by the online operation may be more effectively nurtured? Also, atwhat spatial scale does e-commerce innovation operate within the multichannel retailerand how are best practices associated with the technology disseminated throughout thecorporate structure (compare Bunnell and Coe, 2001; Gertler, 2001)?

Fourth, at the local scale, how are smaller retail merchants responding to theorganisational challenge of e-tailing? Do the competitive advantages of a multichannelstrategy have the same level of significance to more localised retailers? In what ways isthe landscape of the traditional retail store, across a range of sectors, continuing toevolve under a multichannel corporate strategy? What is the influence of a physicalstore base on the otherwise deflationary pricing dynamics of the web store, wherecompetitors are more readily `visible' to a hypermobile consumer (see Tang andXing, 2001)?

With its commitment to exploring the relations between space and corporateretail activity, the so-called `new retail geography' is certainly well positioned topursue each of the above questions. Indeed, e-tailing and e-commerce more generallysurely provide ` one of the key themes for an economic geography worthy of its name''(Wrigley, 2000, page 311).

Acknowledgements. I would like to express my gratitude to all of the organisations, and relevantpersonnel, for participating in this research. I also thank the following, in chronological order:Louise Crewe, Peter Jackson, and Nigel Thrift for insightful comments during the early stages ofthe research; Ken Jones and Marco Biasiotto for their kind hospitality at the Ryerson Centrefor the Study of Commercial Activity in Toronto; Neil Wrigley for his helpful advice on draftmanuscripts of this paper; and Bob Smith, Cartography Unit, University of Southampton, forexpertly drawing the map of Ontario. The incisive comments of two anonymous referees are alsogreatly appreciated. All discrepancies and faults remain may sole responsibility.

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APPENDIXSimplified overview of the final interview plan (as at 28 July 2000)1 The characteristics of the corporate e-commerce strategy1.1 Implementation(a) The date on which the web store was launched.(b) The strategic reasons for the implementation of the web store.(c) Whether preexisting customers were consulted in the process of designing andimplementing the web store.(d) The human and capital resources that have been required to design, implement andmaintain the web store.

1.2 Performance(a) The performance of the website as compared with that of the traditional retailoutlets, in terms of the following indicators:

sales turnover,profitability,market share in this sector.

(b) The key competitors that the web store faced in this market sector.(c) The number of hits that are made to the web store on a daily/weekly/monthly/yearly basis, and the proportion of these that result in an online purchase.(d) The level of sales turnover that results from direct hits to the website as comparedwith those that originate from links that have been made with other online companiesand organisations, such as portals or virtual malls.

2 The physical fulfilment and distribution infrastructure ^ impacts on the geographicalorganisation of the retailer?2.1 The Internet commodity chainGeneral discussion of the Internet as a disruptive technology and the concepts ofdisintermediation and reintermediation.(a) Order submission:

kiosk technology,server: location, security, and maintenance.

(b) Warehousing:spatial location,general logistical processes required for online orders as compared with offlinefulfilment (subject to the possibility of a site visit).

(c) Distribution and product returns:delivery channels to individual homes,digital delivery: prospects and limitations,alternative payment methods: for example, cyber-cash, loyalty vouchers, orsmart cards,product returns.

2.2 The future of e-tailing in the context of the multichannel organisation(a) The general attitudes of board-level management towards e-commerce.(b) Investment strategies for the physical fulfilment and distribution infrastructure ofe-commerce.(c) Strategies to revitalise the traditional retailing stores.

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