The US digital economy has been growing at a faster rate in March than the economy as a whole, with COVID-19 significantly influencing online shopping behaviours, according to new research.
The findings come from Adobe’s new Global Economic Index, a real-time barometer of the digital economy which analyses trillions of visits to retail sites and product stock keeping units (SKUs).
Key findings:
– Purchases that are trending: Online sales for hand sanitiser, gloves and masks are up 807%, toilet roll sales have increased by 231%, cold and pain relievers are up 217%, while canned goods are up 87% – all between January 1, 2020 and March 11, 2020. Fitness equipment and computers have seen a 55% and 40% surge in sales during this period respectively, as the public work and exercise from home.
– Online shopping is growing exponentially with daily online grocery sales doubling YOY for the first two weeks of March, and click and collect surging by 62% in that period.
– Digital purchasing power is up, increasing by 3% year-over-year and 20% since 2014. When it comes to sales offline, purchasing power has decreased at a rate of 12%, with $1 in 2020 buying what would have only cost 88 cents in 2014.
– Digital is driving new shopping behavior: Some product categories have taken a bigger share of the digital basket while others have fallen off. The grocery category has increased its share of the basket from 6% to 8% in three years. Clothing retails have seen total online transactions increase from 21% to 23% over the last five years. Conversely, computer sales have generally decreased from 21% to 8% in the wake of the mobile computing boom.
Powered by Adobe Analytics and based on a new “digital consumer shopping basket” measuring sales of online goods and services, Adobe’s Digital Economy Index findings include a 20% increase in digital purchasing power—the amount consumers can buy with a set amount of money over a period of time—since 2014. Sales in certain categories, including groceries, cold medications, fitness equipment and computers have surged as a result of COVID-19. Buy Online, Pickup In-Store (BOPIS) shopping has increased 62%.
Additional insights include:
• Digital is driving new shopping behaviour: Some product categories have taken a bigger share of the digital basket while others have fallen off. The grocery category has increased its share of the basket from 6% to 8% in three years. Apparel retailers made the pivot to digital early and have seen their share of total online transactions increase from 21% to 23% over the last five years. Conversely, computers have decreased from 21% to 8% in the wake of the mobile computing boom.
• Digital purchasing power continues to rise: Consumers continue to get more for the dollars they spend online. The digital purchasing power of consumers is up 3% year-over-year and has increased 20% since 2014, with $1 buying today what it would have taken $1.20 to buy in 2014. Over that same time, $1 spent buying a similar set of goods offline lost value, with $1 in 2020 buying what would have only cost 88 cents in 2014. However, the expectation is that as more of people’s lives move online, the offline and online economies will continue to converge and so will their prices.
• COVID-19 drives surge in eCommerce: Between 1 January 2020 and 11 March 2020, purchases of several products have seen a significant jump in sales: 807% for hand sanitizers, gloves, masks and anti-bacterial sprays; 217% for over-the-counter drug purchases (cold, flu and pain relievers); 231% for toilet paper; and 87% for canned goods and shelf-stable items. Additionally, with many U.S. consumers confined to their homes starting in March, orders for fitness equipment (kettlebells, dumbbells, stationary bikes and treadmills) and computers (desktops and laptops) have seen 55% and 40% boosts in online sales respectively. The online grocery shopping category overall has seen a 100% increase in daily online sales between 13 March and 15 March, while BOPIS has seen a surge with a 62% year-over-year increase between 24 February and 21 March.
• Innovation pushes online prices down: Categories with the most product updates (new SKUs) released in a year (Electronics, Computers, TVs) have seen online prices decrease, digital purchasing power increase, and have kept U.S. inflation down overall. Online electronics prices, for example, have decreased over 40% over a five-year period. From January 2014 to July 2017, online deflation drove digital purchasing power up by an average of 3.9% per year, but as people started buying more goods and services where innovation was less common—like groceries and furniture—online deflation and digital purchasing power slowed to 2% growth year over year. As online shopping begins to represent all that people buy, not just the most innovative goods, the price advantage to shopping online will diminish.
New Digital Consumer Basket
The total online purchase share in the U.S. includes Apparel (23% share), Electronics (16%), Home and Garden (12%), Computers (8%), Groceries (8%), Home Improvement Tools (5%), Home Appliances (4%), Personal Care Products (4%), Flowers and Related Gifts (3%), Office Supplies (3%), Sporting Goods (2%), Books (2%), Jewellery (2%), Furniture and Bedding (2%), Pet Supplies and Products (2%), and Toys and Games (2%). Goods in the Non-Prescription Drugs and Medical Equipment and Supplies categories make up 1% each.
Methodology
The Adobe Digital Economy Index offers the most comprehensive set of insights of its kind, based on the analysis of over one trillion visits to sites and over 100 million SKUs. Adobe Analytics measures transactions from 80 of the top 100 U.S. online retailers—more than any other technology company. Analysis is significantly more in-depth and accurate compared to survey-based assessments, because only Adobe has access to this volume of real-time, transactional consumer data. Several government bodies and industry trade organisations including the U.S. Bureau of Labor Statistics, the Federal Reserve and the U.S. Census Bureau agreed to work with Adobe to get an instant read on the digital economy and access to data.
Source: www.adobe.com
