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Title: How E-Commerce Improves the Brick and Mortar Shopping Experience: Explaining the Post-2002 Slowdown
Citation Type: Miscellaneous
Publication Year: 2018
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Abstract: Brick and mortar retailers provided $376 billion of “free” consumer shopping experiences in 2015. For example, vehicle dealerships provide “free” test drives and department stores provide “free” fashion advice. In addition, brick and mortar services like banks also provide valuable “free” experiences as well. The recent shift to e-commerce raises fears that these “free” experiences may be disappearing. To capture the output of “free” experiences, I model their provision as a barter transaction of sales attention for experiences, and track this modeled transaction consistently with the industry outputs and inputs already tracked in GDP. Despite the rise of e-commerce, I find that brick and mortar shopping experiences grew faster than overall GDP after 2002. It may be true that Americans are spending less time at brick and mortar retailers – but retailers more than compensate by increasing the quantity of “free” experiences provided per hour. Consistent with the increased shopping output reported by retailers, shoppers self-reported lower stress levels during brick and mortar shopping. I argue that these changes are driven by competition from e-commerce, so the improvement in brick and mortar shopping experiences can be viewed as an indirect productivity effect from the Internet. Focusing on the wholesale and retail sector, the post-2002 productivity slowdown shrinks from 0.98 percentage points per year to only 0.13 percentage points per year. Across the entire private business sector, the post-2002 productivity slowdown shrinks from 0.44 percentage points per year to 0.26 percentage points per year.
Url: https://scholar.harvard.edu/files/jorgenson/files/pl11d_soloveichik.pdf
User Submitted?: No
Authors: Soloveichik, Rachel
Publisher: U.S. Bureau of Economic Analysis
Data Collections: IPUMS Time Use - ATUS
Topics: Labor Force and Occupational Structure, Other, Work, Family, and Time
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