New Index measures the digital economy in real-time; COVID-19 drives surge in e-commerce and Buy Online, Pickup In-Store.
Adobe today unveiled the Adobe Digital Economy Index, the first real-time barometer of the digital economy, which analyzes trillions of online transactions across 100 million product SKUs in 18 product categories. Growing at a faster pace than the economy as a whole, the digital economy has never been more important than during the COVID-19 pandemic as consumers and businesses across the globe grapple with a digital-only reality. More broadly, as the digital economy continues to evolve, the need to accurately track online prices and actual spending to better understand trends and predict changes across industries and countries becomes even more critical.
Powered by Adobe Analytics and based on a new “digital consumer shopping basket” measuring sales of online goods and services, Adobe's Digital Economy Index findings include a 20 per cent increase in digital purchasing power—the amount consumers can buy with a set amount of money over a period of time—since 2014. Sales in certain categories, including groceries, cold medications, fitness equipment and computers have surged as a result of COVID-19. Buy Online, Pickup In-Store (BOPIS) shopping has increased 62 per cent.
Additional insights include:
· Digital is driving new shopping behavior: Some product categories have taken a bigger share of the digital basket while others have fallen off. The grocery category has increased its share of the basket from 6 per cent to 8 per cent in three years. Apparel retailers made the pivot to digital early and have seen their share of total online transactions increase from 21per cent to 23 per cent over the last five years. Conversely, computers have decreased from 21per cent to 8 per cent in the wake of the mobile computing boom.
· Digital purchasing power continues to rise: Consumers continue to get more for the dollars they spend online. The digital purchasing power of consumers is up 3 per cent year-over-year and has increased 20 per cent since 2014, with $1 buying today what it would have taken $1.20 to buy in 2014. Over that same time, $1 spent buying a similar set of goods offline lost value, with $1 in 2020 buying what would have only cost 88 cents in 2014. However, the expectation is that as more of people’s lives move online, the offline and online economies will continue to converge and so will their prices.
· COVID-19 drives surge in eCommerce: Between January 1, 2020 and March 11, 2020, purchases of several products have seen a significant jump in sales: 807 per cent for hand sanitizers, gloves, masks and anti-bacterial sprays; 217 per cent for over-the-counter drug purchases (cold, flu and pain relievers); 231per cent for toilet paper; and 87 per cent for canned goods and shelf-stable items. Additionally, with many U.S. consumers confined to their homes starting in March, orders for fitness equipment (kettlebells, dumbbells, stationary bikes and treadmills) and computers (desktops and laptops) have seen 55 per cent and 40 per cent boosts in online sales respectively. The online grocery shopping category overall has seen a 100 per cent increase in daily online sales between March 13 and March 15, while BOPIS has seen a surge with a 62 per cent year-over-year increase between February 24 and March 21.
· Innovation pushes online prices down: Categories with the most product updates (new SKUs) released in a year (Electronics, Computers, TVs) have seen online prices decrease, digital purchasing power increase, and have kept U.S. inflation down overall. Online electronics prices, for example, have decreased over 40 per cent over a five-year period. From January 2014 to July 2017, online deflation drove digital purchasing power up by an average of 3.9 per cent per year, but as people started buying more goods and services where innovation was less common—like groceries and furniture—online deflation and digital purchasing power slowed to 2 per cent growth year-over-year. As online shopping begins to represent all that people buy, not just the most innovative goods, the price advantage to shopping online will diminish.
New Digital Consumer Basket
The total online purchase share in the U.S. includes Apparel (23 per cent share), Electronics (16 per cent), Home and Garden (12 per cent), Computers (8 per cent), Groceries (8 per cent), Home Improvement Tools (5 per cent), Home Appliances (4 per cent), Personal Care Products (4 per cent), Flowers and Related Gifts (3 per cent), Office Supplies (3 per cent), Sporting Goods (2 per cent), Books (2 per cent), Jewelry (2 per cent), Furniture and Bedding (2 per cent), Pet Supplies and Products (2 per cent), and Toys and Games (2 per cent). Goods in the Non-Prescription Drugs and Medical Equipment and Supplies categories make up 1per cent each.
The Adobe Digital Economy Index offers the most comprehensive set of insights of its kind, based on the analysis of over one trillion visits to sites and over 100 million SKUs. Adobe Analytics measures transactions from 80 of the top 100 U.S. online retailers—more than any other technology company. Analysis is significantly more in-depth and accurate compared to survey-based assessments, because only Adobe has access to this volume of real-time, transactional consumer data. Several government bodies and industry trade organizations including the U.S. Bureau of Labor Statistics, the Federal Reserve andthe U.S. Census Bureau agreed to work with Adobe to get an instant read on the digital economy and access to data.