R000239472 – Putting e-commerce in its place: constructing electronic times and spaces

Funded by the Economic and Social Research Council

Award/Grant Name: Putting e-commerce in its place: constructing electronic times and spaces

Award/Grant Holders: Andrew Leyshon, Shaun French, Louise Crewe and Nigel Thrift.

Duration: November 2001 – January 2004

For the full End of Award Report, click here and for a Project Summary click here

Non-Technical Summary

The research focuses on e-commerce from producers’ perspectives, and sets out to investigate claims (made before and during the dot.com boom) that the internet would fundamentally change the relationship between supplier and consumer.

Detailed observation of organisations in the sectors chosen – music, fashion, and retail financial services – constituted the bulk of the research activity. Interviews and analysis of texts were also undertaken.

The main objectives were (in brief):

1. To modify the concept of ‘virtualism’ to incorporate a broader set of participants beyond academic economists, and to include types of abstractions outside formal economic theories.
2. To analyse ways in which such ideas and concepts are translated into practices.
3. To produce an audit of the e-commerce knowledge community (EKC)
4. To consider the take up of ideas and concepts among managers in the chosen industries.
5. To map the material impact of e-commerce on the chosen industries.
6. To consider the ways in which e-commerce has forged new interaction between companies and consumers, and the effects of its outcome.

Key findings

1. Broadly, virtualism is the translation of abstract ideas and concepts into material form. The dot.com boom was integral to transforming ideas to reality, and then to acceptance as the norm.
2. Following the dot.com collapse in April 2000, the role of e-commerce was fundamentally reassessed. Dot.com companies faced the same success criteria as traditional business – sufficient revenue has to be generated to cover the cost of capital and make profits. This led to a change in the assessment of the desired outcome for many e-commerce activities. Most companies now have web sites, but for a variety of purposes. Many are not directly aimed at, nor designed to make sales, but used for promotion, information dissemination, research, assessment of success/failure and other measurements.
3. Evidence supported the hypothesis that a discernable EKC has emerged, and that it is a more diverse and dynamic group than originally envisaged, with boundaries which are constantly shifting. The ECK is wide ranging, encompassing management consultancies, business schools, the media, etc. at one end, and practitioners such as software and technology providers at the other.
4. Practical, incrementally gained, and even mundane knowledge was frequently more influential in shaping e-commerce than researched theory and concepts, particularly for smaller businesses. Larger organisations, such as financial service providers, were more likely to use formal and consultancy findings than were smaller companies such as fashion retailers. In general, the better the economic climate the more experimental firms become in using new e-commerce technology.
5. Originally it was thought that e-commerce was best developed by start up and stand alone businesses. With some notable exceptions, the most successful e-commerce has been undertaken within existing organisations. Cost absorption, market knowledge and the use of established brands have all contributed to this success.
6. i. The internet has provided faster access and better knowledge of commodities and prices.
   ii. The ability to exchange information in both directions between producer and consumer has created a relationship not previously possible, and can result in modification of the product or service.
   iii. Information exchange and web chats for fan club members, hobbyists, collectors, etc. is enabled. It poses questions about the relationships between formerly ‘isolated’ individuals with shared, but sometimes competitive, interests.
   iv. Consumers appreciate being able to make fast transactions, search for unusual items, participate in auctions, and track markets.
   v. The screens on electronic devices have become a motif of cultural transmission, and a new way of monitoring activities. All organisations are now expected to have a website.
   vi. Speed has become the accepted ‘ambient’ pace.

The impact on the three sectors researched differed considerably:

• fashion retailing relies to a large extent on touch and fit. E-commerce has had little impact beyond specialist items.
• established financial service providers use e-commerce as an additional distribution network.
• the music industry’s value chain has been completely destabilised by piracy, leading to a major restructuring.

About the study

The project was started in November 2001 and ended on 31 January 2004. It involved five researchers: Professor Andrew Leyshon (Principal Researcher), co-applicant Dr S French, and Professor L Crewe (all from the School of Geography, University of Nottingham), Dr P Webb (University of Birmingham) and Professor NT Thrift (University of Oxford).

Key words

E-commerce, producer/consumer relationship, internet transactions, information dissemination, dot.com boom

RES000220686 – The changing geography of British bank and building society branches, 1995-2003

Funded by the Economic and Social Research Council

Award/Grant Name: The changing geography of British bank and building society branches, 1995-2003.

Award/Grant Holders: Andrew Leyshon, Shaun French and Paola Signoretta.

Duration: June 2004 – May 2005.

For the full End of Award Report, click here.

Non-technical Summary

When banks and building societies close their branches, it can have significant consequences for customers, who may have to incur extra travel costs to make transactions or get face-to-face advice. Closures also engender a sense of loss and abandonment within local communities. This project, by the University of Nottingham, mapped the changing provision of bank and building society branches between 1995 and 2003 – updating research into changes between 1989 and 1995.

Key Findings

Continuous decline

• The branch networks of both banks and building societies have now been in a continuous process of decline over this period.
• Between 1989 and 2003, banks closed 32 per cent of their branches, converted building societies 22 per cent, and building societies 20 per cent. Between 1995 and 2003, banks closed 21 per cent of their branches, converted building societies 19 per cent and building societies seven per cent.

Poor inner cities hit hardest

• Distribution of closures was uneven. The average closure rate for all areas between 1995 and 2003 was 25 per cent. However, the highest rate – more than 30 per cent – was experienced in ‘multicultural metropolitan’ areas, which include poor inner city areas.
• Meanwhile, areas that experienced fewer than average branch closures tended to be more affluent, areas which could safely be described as typically ‘Middle England’.

Market forces

• This long run process of branch closure is a product of a more competitive market for retail financial services, which forces firms seriously to appraise costs against revenues.
• It is also a result of new distribution channels for financial services, such as use of the telephone, developed in the 1980s, and the Internet, from the late 1990s.
• However, perhaps the most significant new channel arose from government moves with the 16 largest banks and biggest building society to ensure basic bank accounts for low-income customers. To facilitate provision to poorer communities, they were made available through post offices. This widens the scope of the retail financial services industry, but was cited as a potential factor in driving further bank closures.
• Closures vary between institutions, with banks in particular being anxious to drive down costs in the face of investor pressure.

Regional distribution

• Lng-run disparities in economic and population growth have contributed to an uneven regional distribution of branches. There is a marked concentration of networks in the South East of England, in contrast to the situation in, say, Wales.
• However, based on branches per population, Wales, the South West and parts of Scotland come out best, while the lowest number per capita are in the East and West Midlands, Yorkshire and Humberside.

About the Study

The project was led by Professor Andrew Leyshon, of the School of Geography, University of Nottingham. It included developing a database of bank and building society branches for the period 1995-2003 for analysis, building on one produced for previous research. Findings were discussed in 15 interviews with leading decision and policy makers, consumer organizations and representatives of mainstream financial services.

Key words

Banking, building societies, financial services, exclusion, communities, inner cities