COVID-19 created a significant rise in domestic e-commerce spending, with long-term impact.
According to new data from the Adobe Digital Economy Index, the pandemic gave U.S. e-commerce 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, when Adobe data indicates $188.2 billion was spent online between November and December.
The $183 billion boost happened within the 12-month pandemic period from March 2020 to February 2021, where Adobe says U.S. consumers spent a total of $844 billion was spent online. During calendar year 2020, U.S. online spending totaled $813 billion, up 42% from calendar year 2019.
At current growth rates, Adobe expects the 2021 calendar year will bring in somewhere between $850 billion and $930 billion in domestic online spending. The pandemic produced a rare step change in online spending, equivalent to a 20% boost, and Adobe anticipates future growth to build off of this gain. 2022 is expected to be the first trillion-dollar year for U.S. e-commerce.
Additional findings based on Adobe Analytics data include:
• The two-month period of January-February 2021 saw U.S. consumers spend $121 billion online, a 34% year-over-year increase.
• Buy-now-pay-later has seen 15% year-over-year growth in the first two months of 2021. Consumers using this service are also placing orders that are 18% larger.
• Online sales for home improvement products grew 60 year-over-year in the first two months of 2021. Apparel grew 22% year-over-year in the same time period, lagging other major categories.
• From Feb 1 -22, 2021, the online grocery category grew by 230% when compared to Jan 6 - Jan 26, 2020 (pre-pandemic). In the same time period, sporting goods saw 75% growth.
• “Out of stock” messages first peaked in July 2020, when shoppers saw three times more stockouts compared to the pre-pandemic period. In January 2021, out-of-stock messages were still elevated at four times 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.
• Northeastern states collectively saw 82% year-over-year online spending growth in June 2020, the highest of any region. Western states saw the most growth in the new year (Feb 2021) at 34% year-over-year. At the state level, Maine grew 60% in the first two months of 2021, the highest of any state, with North Dakota seeing the least growth at 16% year-over-year.
• Holidays decreased in importance for online spending. Memorial Day 2020 e-commerce grew 20% less than other days that week and resulted in $32 million less revenue (Labor Day: 26%/$40 million less; President’s Day: 15%/$22 million 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.
• Buy-online-pickup-in-store (BOPIS) and curbside options continued to see traction, growing 67% year-over-year in February 2021. In an Adobe survey of over 1,000 U.S. consumers, 30% of online consumers preferred 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. Insights include: Consumers typically see a 4% increase in purchase power online over the course of an average year. In 2020, it decreased by 1 percent year-over-year as a surge in demand was faced with limited supply, higher prices, and new fulfillment costs.
The Adobe Digital Economy Index is based on analysis through Adobe Analytics that covers over one trillion visits to U.S. retail sites and over 100 million SKUs.