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JUST THE NUMBERS: ADOBE COVID-19 DIGITAL ECONOMY INDEX

April 12, 2021
April 12, 2021
Hello I’m Nik via Unsplash

COVID-19 changed the way we shopped, and while the vaccine has facilitated a path back to normal, we’re not there yet. The shutdown a year ago forced everyone online out of necessity, revealing the convenience and efficiency of the channel to those who rarely purchased online. A year after the pandemic permanently reshaped e-commerce, Adobe explored how online shopping habits and purchasing power have changed.

Through the Digital Economy Index, Adobe provides a real-time barometer of digital buying and selling activity, analyzing trillions of online transactions across 100 million product SKUs in 18 product categories.

  • COVID-19 gave e-commerce an extra boost of $183 billion, as consumers flocked online to meet their daily needs. By way of comparison, $188.2 billion was spent online during the 2020 holiday shopping season 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 percent growth over 2019.
  • 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 e-commerce.

The New Year

  • 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 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 struggle to meet demand. “Out of stock” messages first peaked in July 2020, where shoppers saw 3x more stockouts compared to the pre-pandemic period. In Jan 2021, out-of -tock messages were still elevated at 4x pre-pandemic levels. Groceries, medical supplies, and pet products were out of stock online more often than other product categories.
  • States in the Northeast collectively saw 82% YoY growth in June 2020, the highest of any region, while Western states saw the most growth in the new year (Feb 2021) at 34% YoY.

The Behavior Shifts

  • As online shopping became a ubiquitous daily activity during the pandemic, branded shopping days lost importance. Memorial Day 2020 commerce grew 20% less than other days that week and resulted in $32 million less revenue, Labor Day resulted in 26%, and $40 million less; Presidents’ Day saw 15% and $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, pick up in-store or curbside options continued to see traction, growing 67% YoY (Feb 2021).
  • In an Adobe survey 30% of online consumers prefer curbside/in-store pickup over standard delivery options.

The big question as we move forward is which of our pandemic habits will stick. It’s an easy bet that anything perceived to make life easier will stick, but don’t discount the desire for human connection when contemplating retail looking forward. Beauty and wellness in particular will remain an experiential category.

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