Adobe: US Online Spending Reached $1.7 Trillion During the Pandemic

At its Adobe Summit today, the company released new US eCommerce data (via the Adobe Digital Economy Index) looking at how two years of COVID-19 reshaped the digital economy, increased online spending, and it will shape its future. 

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After two years of the pandemic (March 2020 through February 2022), US consumers spent $1.7 trillion online, $609 billion more than the two preceding years combined (2018, 2019).

Demand remained strong in 2021 with $885 billion in online spending, up 8.9% year-over-year (YoY).

In 2022, Adobe expects US consumers to spend $1 trillion online for the first time. As the digital economy expands, new Adobe data reveals trends and new consumer shopping behaviors.

Inflation Contributes to eCommerce Growth   

Of the $1.7 trillion spent online by consumers, $32 billion was driven by higher prices; In other words, consumers paid $32 billion more for the same amount of goods.

Online inflation, first observed in June 2020, has persisted for 21 consecutive months. The impact was most notable in 2021, where $22 billion of eCommerce growth was driven by higher prices compared to just $4.7 billion in 2020. 

In the first two months of 2022, $3.8 billion in eCommerce growth was driven by higher prices. But inflation has not deterred demand, with the same two months driving $138 billion in online spending, up 13.8% YoY.

Adobe expects consumers could pay as much as $27 billion more online for the same amount of goods due to inflation in 2022.

Groceries Become a Major eCommerce Category   

In 2021, 41.8% of e-commerce overall was driven by just three categories: electronics, apparel, and groceries. The pandemic has impacted the trajectory of each one:  

Groceries

2020 was a breakout year for the category, with $73.7 billion spent online, surging 103% YoY. Many who tried online grocery shopping for the first time are continuing to do so: $79.2 billion was spent in 2021, up 7.2% YoY.

Groceries is now 8.9% of the eCommerce share overall, up from 6.3% in 2019 and down slightly from 2020 (9.1%) when demand surged early in the pandemic.

Consumers now spend an average of $6.7 billion each month for groceries, up from $3.1 billion pre-pandemic. Adobe expects the category to top $85 billion in 2022.  

Electronics

As the largest category in eCommerce, electronics drove $165 billion in online spending in 2021, up 8% YoY. This represents an 18.6% share of eCommerce overall, down slightly from 2020 (18.8%) and 2019 (21%) as other categories picked up steam.

The pandemic cemented electronics as the top category in e-Commerce, as consumers stayed home more and spent $152.7 billion in 2020, up a significant 26.8% from the year prior.

US consumers now spend an average of $13.6 billion each month on electronics, up from $9.9 billion pre-pandemic. Adobe expects the category to top $174 billion in 2022. 

Apparel

As consumers spent more time at home, apparel demand slumped. In 2020, apparel grew by 9.1% YoY ($115.8 billion in spend) while eCommerce overall grew by 41% YoY.

Growth was modest in 2021 at $126.2 billion, up 8% YoY. This represents a 14.3% share of eCommerce overall, down from 2019 (18.5%) and in line with 2020 (14.2%).

The pandemic changed the trajectory of a category that chased electronics in 2019 for the top spot. That year, apparel spending was $14.4 billion behind electronics. But by 2021, the gap widened to $38.8 billion.

Apparel is still a major category with consumers spending an average of $10.2 billion each month, up from $8.7 billion pre-pandemic. Adobe expects the category to top $130 billion in 2022. 

“eCommerce is being reshaped by grocery shopping, a category with minimal discounting compared to legacy categories like electronics and apparel. It highlights a shift in the digital economy, where speed and convenience are becoming just as important as cost savings.”

Patrick Brown, vice president of growth marketing and insights, Adobe.

Additional Insights From Adobe on Online Spending

Out-of-Stock

Consumers have seen 60 billion out-of-stock (OOS) messages in the last 24 months (March 2020 to February 2022), in the face of supply chain constraints.

The odds of seeing an OOS message is now 1 in 59 pages, up from 1 in 200 pages pre-pandemic (a 235% increase). In the last four months (November 2021 through February 2022), consumers have seen over 12 billion OOS messages, a trend expected to persist in 2022.  

Buy Now Pay Later

As consumers spent more online during the pandemic and looked for new ways to manage their money, BNPL orders between October and November 2020 increased 528% YoY while revenue grew 412% YoY.

In recent months (January and February 2022), growth has slowed, but demand remained strong: BNPL orders are up 53% YoY while revenue is up 56% YoY.

Curbside Pickup

The fulfillment method already saw strong adoption before the pandemic, but health and safety concerns gave it a boost. The demand has been durable, with many consumers now valuing speed and convenience.

In 2022 so far, curbside pickup accounted for 20% of all online orders (for retailers who offer the service), establishing itself as a major fulfillment method.

How Adopbe Calculated This Data on Online Spending

The Adobe Digital Economy Index offers comprehensive insights into online commerce, based on analysis through Adobe Analytics that covers over one trillion visits to US retail sites and over 100 million SKUs in 18 product categories

Online inflation insights, from the Adobe Digital Price Index, are modeled after the Consumer Price Index (CPI), published by the US Bureau of Labor Statistics, and uses the Fisher Price Index to track online prices. The Fisher Price Index uses quantities of matched products purchased in the current period (month) and a previous period (previous month) to calculate the price changes by category.

Adobe’s analysis is weighted by the real quantities of the products purchased in the two adjacent months. The company uses a combination of Adobe Sensei, Adobe’s AI and machine learning framework, and manual effort to segment the products into the categories defined by the CPI manual. The methodology was first developed alongside renowned economists Austan Goolsbee and Pete Klenow.