Schuylkill Mall, Frackville, PA. Photo: Spencer Platt / Getty

Last week we reported that government data may be seriously understating the scale of e-commerce. Now a paper sent by an FoW reader reinforces the appearance of a hugely underestimated e-commerce sector.

David Evans, chairman of Global Economics Group, and Richard Schmalensee, former dean of MIT's Sloan School of Management, say in their 2016 paper that e-commerce is a third larger than reported by U.S. Census data. By 2016, they said, it had been undercounted for five straight years. The Census Bureau has challenged their data, but they say the larger point still stands.

Why it matters: Even as they were being forced to close stores, beleaguered traditional retailers could take some solace in Census reporting that e-commerce had captured just 12% of total retail sales as of November 2017. But, as Evans and Schmalensee reported, if e-commerce is actually much larger, retailers and mall owners need to respond even more dramatically than they already are.

(In last week's post, we quoted calculations by Thomas Paulson, who runs Minneapolis-based Inflection Capital Management, that e-commerce has 21% of retail sales.)

The Census Bureau says Evans and Schmalensee misunderstood the data, and got them to retract their paper, and a Census spokeswoman told me the agency is not undercounting e-commerce. But Evans and Schmalensee followed up with this repost at Harvard Business Review: Even if e-commerce was counted somewhere on the Census site, they said, it wasn't in a place that non-clairvoyant mortals would find. Hence the continued impression that e-commerce is probably smaller than it really is.

  • Until today, there is no single data line in the Census that provides the clear figure, Schmalensee tells Axios.
  • "They now break out e-commerce and mail order from non-store retailers (e.g., food trucks)," he wrote in an email, "but they don’t split out e-commerce.  So we know that e-commerce is a big deal, assuming mail order has not grown that much, but we don’t know what sorts of retailers have been most affected or changed. "

Go deeper

Updated 37 mins ago - Health

World coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Axios Visuals

New Zealand confirmed Thursday there are now 13 local cases linked to the four who tested positive for COVID-19, ending 102 days with no community spread. Auckland locked down Wednesday for 72 hours and the rest of NZ is under lesser restrictions.

By the numbers: Over 749,400 people have died of the novel coronavirus globally and over 20.6 million have tested positive, per Johns Hopkins. More than 12.8 million have recovered from the virus.

Updated 1 hour ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Global: Total confirmed cases as of 3 a.m. ET: 20,624,316 — Total deaths: 749,421— Total recoveries: 12,831,800Map.
  2. U.S.: Total confirmed cases as of 3 a.m. ET: 5,197,147 — Total deaths: 166,027 — Total recoveries: 1,714,960 — Total tests: 63,252,257Map.
  3. Politics: Pelosi says Mnuchin told her White House is "not budging" on stimulus position.
  4. Business: U.S. already feeling effects of ending unemployment benefits.
  5. Public health: U.S. records deadliest coronavirus day of the summer — America's two-sided COVID-19 response
  6. Education: New Jersey governor allows schools to reopenGallup: America's confidence in public school system jumps to highest level since 2004.

Bob Woodward's new book details letters between Trump and Kim Jong-un

Bob Woodward during a 2019 event in Los Angele. Photo: Michael Kovac/Getty Images

Journalist Bob Woodward has obtained "25 personal letters exchanged" between President Trump and North Korean leader Kim Jong-un for his new book, "Rage," publisher Simon & Schuster revealed on Wednesday.

Details: In the letters, "Kim describes the bond between the two leaders as out of a 'fantasy film,' as the two leaders engage in an extraordinary diplomatic minuet," according to a description of the book posted on Amazon.