Grocery is maturing as a “core” online retail category

0

Although a bit late in the online game, grocery has quickly become a “major e-commerce category,” fueled over the past two years by the COVID-19 pandemic, according to Adobe Analytics.

Groceries accounted for 8.9% of the $885 billion in online retail spending in the United States for 2021, down from 6.3% in 2019 and down slightly from 9.1% in 2020, this which San Jose, Calif.-based Adobe called a “breakthrough year for the category.” as consumer demand for online groceries skyrocketed with the onset of the pandemic.

The Adobe Digital Economy Index tracked online grocery spending at $79.2 billion last year, up 7.2% from $73.7 billion in 2020, when the category was saw its sales jump 103%. Currently, consumers are spending an average of $6.7 billion per month online to shop, more than double the $3.1 billion spent before the pandemic.

Looking ahead, Adobe expects grocery to surpass $85 billion in online spending by 2022 and become one of the top e-commerce categories over the long term, surpassing $100 billion in sales. annual online.

Adobe

“E-commerce is being reshaped by grocery, a category with minimal discounts compared to legacy categories like electronics and apparel,” said Patrick Brown, vice president of growth marketing and information from Adobe, in a press release. “This highlights a shift in the digital economy, where speed and convenience are becoming just as important as cost savings.”

In the first two years of the pandemic — March 2020 to February 2022 — US consumers spent $1.7 trillion online, $609 billion more than the previous two years, Adobe noted. The $885 billion spent online in 2021 marked an 8.9% gain from $812.8 billion in 2020, when total U.S. e-commerce spending jumped 41.4% from compared to $574.9 billion in 2019. This year, Adobe predicts that annual online spending in the United States will exceed $1 trillion for the first time.

Groceries joined electronics and apparel as the three categories that accounted for 41.8% of online spending in the United States in 2021, according to the Adobe Digital Economy Index.

The largest e-commerce category was electronics, which generated $165 billion in online spending last year – up 8% after a 26.8% jump in 2020 – and accounted for 18.6 % of overall online sales. While the COVID surge reduced demand for apparel in 2020, modest growth in 2021 pushed the category’s online spending up 8% to $126.2 billion, a 14.3% share of total e-commerce spend. Adobe forecasts online spending of more than $174 billion for electronics and more than $130 billion for apparel in 2022.

AdobeAdobe Digital Economy Index-US annual online sales.jpg

Rising prices generated $32 billion of the $1.7 trillion in online consumer spending in the first two years of the pandemic, Adobe reported, adding that online price inflation has been seen for the first time in June 2020 and extended for 21 consecutive months. Consumers particularly felt the impact last year, when high prices accounted for $22 billion in online sales growth compared to just $4.7 billion in 2020.

Through February 2022, e-commerce growth of $3.8 billion was due to inflation, Adobe estimated. However, price increases haven’t dulled demand, as the $138 billion spent online in the first two months of 2022 marks a 13.8% year-over-year increase. Overall for 2022, Adobe predicts inflation could explain consumers paying up to $27 billion more online for the same amount of merchandise.

Supply chain disruptions triggered by COVID resulted in 60 billion out-of-stock (OOS) messages between March 2020 and February 2022, increasing consumers’ chances of encountering an OOS message by 235% to one in 59 pages compared to one in 200 pages before the pandemic, according to Adobe. From November 2021 to February 2022, online customers saw more than 12 billion OOS messages, a trend that is expected to continue this year.

Growing consumer health and safety concerns amid the pandemic have spurred the already strong adoption of curbside pickup, Adobe added. So far in 2022, curbside pickup accounted for 20% of all online orders among retailers offering the service and has become a major fulfillment method with enduring demand, driven by its speed and convenience, said Adobe.

The Adobe Digital Economy Index is based on Adobe Analytics analysis that covers over 1 trillion visits to US retail sites and over 100 million SKUs across 18 product categories.

Share.

Comments are closed.