Why did the sales channel distinction end?

The distinction between online and in store retail ended in NACE Rev. 2.1 because the channel of sale no longer describes the activity being classified. The activity is retail trade, whether the sale happens in a shop, online, at a market stall, or through a vending machine. Statistics Netherlands states the reason directly: many physical shops also sell goods online, the distinction between internet trading and trade via retail outlets is no longer clear, and a distinction according to sales channel does not reflect the aim of the classification, because the activity is the same in both cases.

The Spanish statistical institute states the same change: classification criteria based on retail sales channels were eliminated, following the rise of online commerce. Retail headings that were divided by channel were therefore merged or restructured on the basis of what is sold and whether the trade is wholesale or retail.

How did the old distinction work?

Under the old structure, retail headings could be divided by how goods reached the buyer. Separate headings existed for retail through shops, retail by mail order or internet, retail at stalls and markets, and other forms of retail not in stores. A business that sold the same goods through more than one channel could sit awkwardly across headings, and a shop that added an online store could appear to change its classification without changing what it sold. The distinction also aged quickly. As shops, market traders and online sellers began to use several channels at once, the channel heading described the seller’s mix of channels rather than a distinct activity. The classification groups activities by production process and by the nature of the goods or services. Channel of sale is a feature of distribution, not a separate activity in that sense, and the revision removed it as a grouping basis.

Old grouping basis	New grouping basis	What changed
Sales channel, shop or online	Wholesale or retail character, and goods sold	Channel no longer divides headings
Stall and market trade as separate headings	Retail trade headings by goods	Channel no longer divides headings
Mail order and internet as separate headings	Retail trade headings by goods	Channel no longer divides headings

The table above describes the change in grouping basis as stated by Statistics Netherlands and the Spanish statistical institute. It names no specific retail class, because class level rows must be read in the correspondence tables for the goods concerned.

What replaced the channel headings?

Retail headings are now grouped by the goods sold and by the wholesale or retail character of the trade, with intermediation headings added separately for activities that link buyers and sellers. Statistics Netherlands notes that a considerable number of codes for intermediaries were added, including retail intermediation under Division 47 in the Dutch variant. The Spanish explanatory document notes the same development: numerous new classes were created for intermediation activities, previously grouped with the products or services being intermediated or under the residual business support class. The channel change and the intermediation change are distinct. The first removes a grouping basis. The second adds headings for a different activity, the activity of linking parties. A seller that also runs a marketplace, or a site that only links buyers and sellers, is described by different headings, and the notes for each heading state the boundary.

What does the change mean for reading retail series?

Retail series compiled under channel headings cannot be continued channel by channel, because the channel headings no longer exist. Series must be read at the level of the goods based heading, using the correspondence tables to combine the old channel headings that now sit together. Double reporting and backcasting, prepared by Eurostat and its partners, give a comparable basis for a period. A reader who compares an old online retail figure with a new retail figure for the same goods, without combining the old channel headings, will understate the old total and will misread growth. The correspondence table shows which old headings combine. The published series shows the comparable numbers.

What does the change not decide?

The change does not decide the code for any specific seller, and it does not decide tax, licensing, funding or collective agreement questions. A seller that uses several channels is not reclassified by the channel it uses most on any given day. The classification describes the activity for statistics. Confirmation for a specific business comes from the national statistical institute or the business register holding its record. A code does not grant a licence or set a tax rate. The end of the channel distinction simplifies the statistical grouping. It does not simplify, or decide, any question that belongs to another authority.

Retail is now grouped by what is sold and whether the trade is wholesale or retail, the old channel headings combine in the correspondence table, and the note for the goods based heading states the scope.