A year after the pandemic permanently reshaped eCommerce, Adobe explores how online shopping habits and purchasing power have changed through the COVID-19 pandemic.
Check Out These Resources
- Do you need a business bank account for your online business? Take a look at our review of the five best bank accounts for sellers, some of which are free with no minimum balance or deposits. [sponsored]
- Boost your social media engagement with Publer. Learn how you can save time writing engaging content faster with AI. [sponsored]
- Could your online business use capital for growth? Here is a primer on revenue-based loans, and how they work.
Through their Digital Economy Index, Adobe has the only real-time barometer of digital buying and selling activity, analyzing trillions of online transactions across 100 million product SKUs in 18 product categories.
2021 Digital Economy Index
Adobe has analyzed terabytes of analytics data in near real time to uncover powerful insights that help you understand and act on digital commerce trends.
You can read the full report here.
In 2020 COVID-19 gave eCommerce an extra boost of $183 billion, as consumers flocked online to meet their daily needs. This is nearly the size of the 2020 holiday shopping season, where $188.2 billion was spent online between November and December.
The boost happened within the 12-month pandemic period from March 2020 to February 2021, where a total of $844 billion was spent online. In the calendar year 2020, $813 billion was spent online, a 42% growth over 2019.
At current growth rates, we expect 2021 calendar year will bring in somewhere between $850 billion and $930 billion. The pandemic produced a rare step change in online spending, equivalent to a 20% boost, and future growth is expected to build off of this gain. 2022 is expected to be the first trillion-dollar year for eCommerce.
Additional findings based on the Adobe Analytics data include:
- In the new year: The first two months (Jan-Feb) of 2021 saw consumers spend $121 billion online, a 34% growth YoY.
- Buy Now, Pay Later: This payment method is seeing a boom, with 215 % YoY growth in the first two months (Jan-Feb) of 2021. Consumers using this service are also placing orders that are 18% larger. Retailers are offering the buy now/pay later option more often, while consumers deal with financial uncertainty.
- Product category growth: As people stayed indoors and refreshed their living quarters, online sales for home improvement products grew 60% YoY in the first two months (Jan-Feb) of 2021. Apparel grew 22% YoY in the same time period, lagging other major categories.
- New grocery habits: Growth in online grocery shopping has persisted in the new year. From Feb 1 – Feb 21, 2021, the category grew by 230% when compared to Jan 6 – Jan 26, 2020 (pre-pandemic). In the same time period, sporting goods saw 75% growth.
- Retailers struggle to meet demand: “Out of stock” messages first peaked in July 2020, where shoppers saw 3x more stock outs compared to a pre-pandemic period. In Jan 2021, out of stock messages were still elevated at 4x pre-pandemic levels. In an Adobe survey of over 1,000 U.S. consumers, respondents cited that in January 2021, groceries, medical supplies and pet products were out of stock online more often than other product categories.
- US Northeast had highest eCommerce peak in 2020: NE States collectively saw 82% YoY growth in June 2020, the highest of any region — Western states saw the most growth in the new year (Feb 2021) at 34% YoY. At the state level, Maine grew 60% in the first two months (Jan-Feb) of 2021, the highest of any state, with North Dakota seeing the least growth at 16% YoY.
- Branded shopping days lost importance: As online shopping became a ubiquitous daily activity during the pandemic, Memorial Day 2020 commerce grew 20% less than other days that week and resulted in $32 million less revenue (Labor Day: 26% / $40m less; President’s Day: 15% / $22m less). The five days between Thanksgiving and Cyber Monday 2020 also contributed 9% less to revenue share during the holiday season, equivalent to $600 million.
- BOPIS here to stay: As shoppers looked for safer ways to shop or to avoid shipping delays, buy-online-pickup-in-store (or curbside) options continued to see traction, growing 67% YoY (Feb 2021). In an Adobe survey of over 1,000 U.S. consumers, 30% of online consumers prefer curbside/in-store pickup over standard delivery options.
The Adobe Digital Economy Index also tracks movement in online prices, as an economic indicator for consumer purchasing power and digital inflation. Some of those insights include:
- Digital purchasing power slumped in 2020: Consumers typically see a 4% increase in purchase power online over the course of an average year. This means for every $1.00 spent, shoppers get $1.04 worth of goods. In 2020, it decreased by 1% YoY as a surge in demand was faced with limited supply, higher prices, and new fulfillment costs.
- Atypical pricing trends: Digital inflation was observed across major online categories for the first time in years: Electronics prices were only down 2.2% YoY (Jan 2020-2021) vs down 10.4% YoY (Jan 2019-2020) — Computer prices were only down 6% YoY vs down 13.5% YoY — Grocery prices were up 4.2% YoY vs down 6% YoY — Home & Garden prices were up 3.9% YoY vs down 9.3% YoY
Methodology: The Adobe Digital Economy Index offers the most comprehensive set of insights of its kind, based on analysis through Adobe Analytics that covers over one trillion visits to U.S. retail sites and over 100 million SKUs — more than any other technology company.
Analysis is significantly more in-depth and accurate compared to survey-based reports, because only Adobe has access to this volume of real-time, transactional consumer data. It is aggregated and anonymized, to provide insights on consumer spending, online prices and 18 product categories.
Subscribe to Our Newsletter
We do not sell your information.
You can unsubscribe at any time.
Head over to our Facebook Group for Small Business Marketplace Sellers and interact with us and other small business owners. Follow us on Facebook, Twitter, or LinkedIn to stay up to date with relevant news and business insights for your online business.