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E-commerce consumers keep shopping, even as inflation drives up prices

Research from Adobe found increased prices could contribute $27B to online sales this year

Rising inflation is driving up the sales numbers of e-commerce sellers, research finds, but consumers are still shopping. (Photo: Burst)

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.

Adobe (NASDAQ: ADBE), which released the results last week at its Adobe Summit, said online spending was $138 billion in January and February.

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.

Click for more articles by Brian Straight.

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Brian Straight

Brian Straight leads FreightWaves' Modern Shipper brand as Managing Editor. A journalism graduate of the University of Rhode Island, he has covered everything from a presidential election, to professional sports and Little League baseball, and for more than 10 years has covered trucking and logistics. Before joining FreightWaves, he was previously responsible for the editorial quality and production of Fleet Owner magazine and Brian lives in Connecticut with his wife and two kids and spends his time coaching his son’s baseball team, golfing with his daughter, and pursuing his never-ending quest to become a professional bowler. You can reach him at [email protected]