Adobe: Online retail will pass $1 trillion in 2022

3/15/2022

Online spending in the U.S. is being boosted by inflation and consumers who are sticking to their pandemic shopping habits — particularly in three categories — even as in-store visits pick up.

Online consumer spending in the U.S. will pass the $1 trillion mark for the first time this year, according to new data from Adobe. Through the first two years of the pandemic (March 2020 through February 2022), U.S. consumers spent $1.7 trillion online, $609 billion more than the two preceding years.

Of the $1.7 trillion spent by consumers from march 2020 to February 2022, $32 billion was driven by higher prices. According to Adobe, online inflation, first observed in June 2020, has persisted for 21 consecutive months. During 2021, $22 billion of e-commerce 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 e-commerce growth has been driven by higher prices. In 2022, Adobe expects U.S. consumers could pay as much as $27 billion more online for the same amount of goods due to inflation.

Groceries become a major e-commerce category
In 2021, Adobe found that 41.8% of e-commerce overall was driven by just three categories: groceries, electronics and apparel.

Here is how the pandemic impacted the trajectory of each one:

Groceries: 2020 was a breakout year for groceries, with $73.7 billion spent online, surging 103% year-over-year ($79.2 billion in 2021, up 7.2% YoY). Groceries now represent 8.9% of the e-commerce share overall, up from 6.3% in 2019 and down slightly from 2020 (9.1%), when online grocery 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 e-commerce category, electronics drove $165 billion in online spend in 2021, up 8% YoY. This represents an 18.6% share of e-commerce overall, down slightly from 2020 (18.8%) and 2019 (21%), as other categories grew. U.S. consumers spent $152.7 billion online on electronics in 2020, up a significant 26.8% YoY. U.S. consumers now spend an average of $13.6 billion each month for 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, online apparel demand slumped. In 2020, apparel grew by 9.1% YoY ($115.8 billion) as e-commerce overall grew by 41% YoY. Growth was also modest in 2021 at 8% YoY ($126.2 billion), representing a 14.3% of e-commerce share overall, down from 2019 (18.5%) and in line with 2020 (14.2%).

Pre-pandemic, apparel spend in 2019 was $14.4 billion behind electronics. By 2021, the gap widened to $38.8 billion. However, Adobe advises that apparel is still a major online retail 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.

Adobe also uncovered pandemic-related trends in several other key areas of online retail:

Out-of-stock: Consumers saw 60 billion out-of-stock (OOS) messages between March 2020 and February 2022). The odds of seeing an OOS message are now one in 59 pages, up from one in 200 pages pre-pandemic (a 235% increase). Between November 2021 and February 2022, consumers saw over 12 billion OOS messages, a trend Adobe expects to persist in 2022.

Buy now pay later (BNPL): 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, growth has slowed, but demand remained strong, with Adobe analysis indicating BNPL orders are up 53% YoY and revenue is up 56% YoY.

Curbside Pickup: In 2022 so far, Adobe says curbside pickup has accounted for 20% of all online orders for retailers who offer the service.

“E-commerce is being reshaped by grocery shopping, a category with minimal discounting compared to legacy categories like electronics and apparel,” said Patrick Brown, VP of growth marketing and insights, Adobe. “It highlights a shift in the digital economy, where speed and convenience are becoming just as important as cost savings.”

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