Ecommerce sales grew steadily during the first four months of this year, but Adobe
Adobe
Analytics data shows U.S. consumers increasingly are seeking out cheaper options when shopping online.
Adobe, in a report released today, found that consumers are trading down, particularly in the categories of personal care, electronics, apparel, home and garden, and furniture and bedding.
Categories such as sporting goods, appliances, tools and home improvement, and toys showed less price sensitivity, although those products also showed increased purchases of lower-priced items.
“We still seem to be having resilient levels of consumer demand but we do have a more cautious spender and a more strategic spender of goods,” said Vivek Pandya, lead analyst, Adobe Digital Insights, in an interview.
Consumers spent $331.6 billion online between January 1 and April 30, a 7% increase over the same period in 2023, Adobe reported. Adobe is forecasting that online spending for the first half of this year will exceed $500 billion, up 6.8% year-over-year.
The data, Pandya said, shows that much of the growth thus far in 2024 “is being really propped up by grocery and a couple of other categories.”
Grocery is up about 16%, while major categories such as electronics, apparel, and furniture are seeing growth in the range of 1 to 3%, he said.
Less Money for Discretionary Spending
“I think what we’re seeing emerge here, in a really clear way, is consumers are having to spend more on things like grocery, gas, housing and that’s limiting their ability to spend freely and heavily on these discretionary goods categories,” Pandya said.
Adobe is expecting the growth in online grocery spending to continue, and is forecasting that by 2027 it will be on par with electronics and apparel as one of the dominant ecommerce categories, he said.
However, even in the grocery catgory the data showed that consumers are price conscious, Pandya said. Food products with low inflation saw revenue grow by 13.5%, while products experiencing high inflation currently showed a revenue drop of 15.6%.
Another strong growth category is cosmetics, up 8% for the period. Adobe is breaking out cosmetics performance for the first time with this report. In 2023, cosmetics generated $35 billion in online sales, up 15.6% over the previous year.
To quantify the extent to which consumers are trading down, Adobe separated each product category into four quartiles ranging from lowest to highest prices, and tracked the share of sales in the most expensive and least expensive quartiles between January 2019 and April 2024.
Share of cheapest goods was up most sharply in personal care, up 96%, followed by electronics, up 64%, and apparel, up 47%. Home and garden and furniture and bedding sales in the cheapest quartile were each up 42 percent.
Pay-Later Purchases Continue to Rise
The Adobe report also found that buy now, pay later (BNPL) financing continues to grow for online purchases. BNPL was used for $25.9 billion in purchases, up 11.8% over the same period in 2023. Adobe expects BNPL will be used for between $81 billion and $84.8 billion in online spending this year, for year-over-year growth of between 8% and 13%.
The trend towards mobile shopping continued, with purchases made on mobile devices up 9.8% in January through April.
The past holiday season was the first time revenue from mobile shopping overtook desktop spending, with mobile purchases accounting for 51% of online spending. Adobe expects that figure to rise to 52.5% in the 2024 holiday season.
Adobe’s data is based on analysis of over one trillion visits to U.S. retail sites, covering 100 million SKUs and 18 product categories.
