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Introduction

Retail trade has experienced dramatic changes over the past several decades in the United States, with changes in the types of outlets where goods are sold, the nature of the transactions that provide goods to consumers, and the structure of retail operations behind the scenes. The recent changes include the rise of warehouse stores and e-commerce, and the further growth of import and large retail chains. These changes highlight and typify many aspects of the broader evolution of the economy as a whole in recent years—with the growing role of large firms and information technology—while taking place in a sector that directly serves the vast majority of the American population and provides substantial employment.

Despite the everyday experience of these dramatic changes in retail, there is concern that the most transformational aspects of those changes may not be captured well by the economic indicators relied on to understand the sector. In particular, the dynamic restructuring of retail should be accompanied by substantial improvements in productivity as retail firms innovate, but the sector’s economic indicators do not tell a story of large productivity increases. This mismatch between everyday experience and economic indicators is more than an idle curiosity. It goes to the heart of our ability to understand the changes taking place in the U.S. economy and to develop appropriate policies in response.

In this context, the Bureau of Labor Statistics (BLS) asked the Committee on National Statistics (CNSTAT) of the National Academies of Sciences, Engineering, and Medicine to evaluate changes in the retail trade sector, assess measures of employment and labor productivity for the sector, and discuss the value of, and specifications for, a new satellite account that

could measure retail-related employment and labor productivity in ways that would better capture the transformation. The request was motivated in part by shifts in the ways that warehouses, transportation services, and delivery services are now supporting retail, shifts that are not reflected in retail employment and labor productivity statistics because those statistics classify such services under industries separate from retail. The request was also motivated, more broadly, by a sense that the economic impacts of a range of retail innovations—highlighted by the growing and pervasive role information technology and e-commerce play in the sector—may not be well measured by the available indicators of retail employment and labor productivity.

To respond to this request from BLS, the National Academies formed the Panel on Measuring the Transformation of Retail Trade and Related Activities. The panel’s statement of task is provided in Box 1-1.

The panel was just beginning its work to respond to the BLS request in 2020 when the COVID-19 crisis shocked the U.S. and world economies. This shock powerfully accelerated many of the longstanding retail trends that provided the motivation for the study, including the rise of e-commerce and the increasing role played by large retail chains, while pointedly demonstrating the sector’s ability to innovate with the rapid evolution of shopping services and curbside delivery. The COVID-19 experience has provided a

dramatic example of the types of retail innovation that need to be reflected in the indicators of retail employment and labor productivity.

THE PANEL’S APPROACH

The panel’s primary information-gathering activity consisted of holding a workshop that provided input from researchers, industry representatives, data users, and relevant statistical agencies. The workshop supplemented the panel’s expertise related to the economics and statistics of the retail sector with additional expertise from economists who have studied the sector, government experts who understand the details of current government statistical programs, and industry representatives who are helping drive the sector’s transformation.

The agenda for the workshop is provided in Appendix A. The workshop included sessions on the changes in retail, from the perspective of researchers and members of the industry; key measurement and data challenges for developing measures of employment and labor productivity; options for developing a satellite account for the retail sector; quality-adjusted prices for retail; uses of bottom-up measures in measuring employment and productivity for retail; and global value chains and the role of imports in the sector.

In deliberating on the workshop input, the panel took a broad approach to the options for a retail-related satellite account, considering both pragmatic immediate steps and aspirational longer-term goals and identifying ways to progress toward the aspirational goals by carrying out specific analyses and collecting additional data.

The next chapter provides an overview of the transformations occurring in the retail sector and the ways these are reflected in available indicators. Chapter 3 provides an overview of conceptual and data issues related to retail employment and labor productivity statistics, including brief descriptions of the government programs that collect relevant statistics. Chapter 4 discusses satellite accounts and key options that are relevant to establishing a satellite account for the retail sector. Finally, Chapter 5 provides the panel’s recommendations for developing such a satellite account.

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