Behind the Web Store: The Organisational and Spatial Evolution of Multichannel Retailing in Toronto

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 technologies 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.

Substitution or complementarity? How the Internet changes city centre shopping

“…These results are important because many researchers have highlighted the competitive advantages traditional retailers have over virtual retailers when operating a Web store in addition to their network of physical stores (see e.g. Steinfield et al, 2001;Currah, 2002;Wrigley et al, 2002;Boschma and Weltevreden, 2005).…”

Internet strategies and performance of Dutch retailers

“…Many empirical studies have investigated the factors that explain the adoption of the Internet by traditional retailers (e.g., Morganosky, 1997;Doherty et al, 1999Kotzab and Madlberger, 2001;Currah, 2002;Ellis-Chadwick et al, 2002;Doherty and EllisChadwick, 2003;Marciniak and Bruce, 2004;Weltevreden et al, 2005;Weltevreden and Atzema, 2006). However, quantitative empirical studies concerning the impacts of adopting the Internet on the performance of traditional retailers are scarce (Doherty and Ellis-Chadwick, 2006).…”

“…Contrary to virtual retailers, traditional retailers had a wellestablished brand identity and a network of physical stores on which they could draw to establish their presence online. Indeed, many scholars highlight the advantages traditional retailers have over virtual retailers when adopting the Internet (Steinfield et al, 2001;Currah, 2002;Wrigley et al, 2002).…”

E-fulfillment and multi-channel distribution – A review

“…Economies of scale from the integration of multiple channels need to be weighed against specific requirements of each individual channel. In particular, the economics of customer-direct Internet channels tend to differ from those of other channels due to small, single-order transaction sizes (Currah, 2002). Thus, companies need to make trade-offs when deciding which processes to integrate across channels and which processes to separate (Gulati and Garino, 2000).…”