Inflation has driven e-commerce revenue higher in the past year, with the first two months of 2022 particularly impacted, according to research from Adobe.
The firm said $3.8 billion of e-commerce sales growth in January and February of this year was due to higher prices. The U.S. Bureau of Labor Statistics’ Consumer Price Index said e-commerce sales fell 3.7% in February from January, which saw a 14.5% increase from December. Neither number was adjusted for inflation.
Inflation took its toll over the past two years as well. Adobe found that e-commerce totaled $1.7 trillion from March 2020 through February 2022, with $32 billion of that tied directly to higher prices for goods. The firm expects online commerce to surpass $1 trillion this year, with about $27 billion attributed to higher prices.
Grocery is a winner
Patrick Brown, vice president of growth marketing and insights for Adobe, said e-commerce is undergoing a metamorphosis thanks to online grocery shopping.
“E-commerce is being reshaped by grocery shopping, a category with minimal discounting compared to legacy categories like electronics and apparel,” he said in a statement. “It highlights a shift in the digital economy, where speed and convenience are becoming just as important as cost savings.”
The research found that 41.8% of e-commerce was driven by three categories: groceries, electronics and apparel. Owing to the pandemic, groceries was the big winner, surging 103% year-over-year in 2020 to reach $73.7 billion before jumping another 7.2% in 2021 to reach $79.2 billion. Groceries now make up 8.9% of the e-commerce market.
Consumers now spend an average of $6.7 billion each month on groceries, up from $3.1 billion pre-pandemic. Adobe expects the category to top $85 billion this year.
Watch: The challenges on online grocery
Electronics remains the largest e-commerce category, with 18.6% of the overall e-commerce market and up 8% year-over-year in 2021. Consumers flocked to online electronic buys when the pandemic started, spending $152.7 billion in 2020 — a 26.8% increase over 2019 — and that hasn’t slowed, with Americans spending $13.6 billion each month on electronics today. Adobe says electronics could top $174 billion this year.
Apparel remains the third most popular category online, although its growth has remained slower than groceries and electronics. The category maintains a 14.3% share of e-commerce sales but saw just 8% year-over-year growth in 2021. Still, consumers are spending $10.2 billion per month on clothing.
Supply chain impacts
The disruptions seen throughout the supply chain over the past two years have impacted e-commerce sellers. Adobe found that online retailers displayed 60 billion out-of-stock messages between March 2020 and February 2022. The odds a customer will see an out-of-stock message are now 1 in 59 pages, up from 1 in 200 pages pre-pandemic.
Consumers are also more likely to seek out alternative payment and fulfillment options. Buy-now, pay-later (BNPL) programs have gained in popularity, increasing 528% year-over-year in the consecutive months of October and November 2020, and revenue grew 421% in that same time frame. BNPL orders are still up 53% year-over-year this year with revenue climbing 56%.
Curbside pickup has also gained favor among consumers, with 20% of all online orders from retailers offering the service in 2022 now BNPL.