Adobe’s Digital Dollar: Mid-Year Holidays Drive Big Online Spending

U.K. Leads the Way for E-Commerce Groceries while Americans Go Organic.

Retailers take note—mid-year holidays are driving more and more of consumers’ online spending. That’s one of the insights from Adobe’s second quarterly Digital Dollar report, just out. The Adobe Digital Insights team creates the report by analyzing anonymous and aggregated real-time online consumer spending data through Adobe Analytics, tracking evolving retail patterns and economic trends.

Adobe unveiled its latest Digital Dollar report today, which shows that e-commerce is continuing to pick up pace in the U.S., with sizable growth in the second quarter of 2018. Year-over-year (YoY) growth for Q2 was 14.5 percent, reaching over $115 billion. Within the quarter, Memorial Day saw the biggest concentration of spending. Typically online sales dip in Q3, but Adobe forecasts a record back-to-school shopping spend surpassing $50B in online sales for the first time, driving strong growth in the third quarter.

“Consumers are becoming more savvy about how to save when they shop online, and one of their favorite strategies is to wait and compare retailers’ sales on holidays,” says Taylor Schreiner, director, Adobe Digital Insights. “Memorial Day is one of the most noteworthy examples. This year we saw Memorial Day sales almost touch $2 billion—a huge YoY leap of 19 percent. It has become the big shopping day for the quarter, and it lifts spending for the whole week.”

Fast-growing holidays shape the e-commerce landscape

While Memorial Day is emerging as a major online shopping day in the U.S., other holidays are also driving spikes in spending. This year, the week before Mother’s Day saw a lift of 21.7 percent in spending over other weeks. However there was only a 0.8 percent spending increase on Father’s Day, which we attribute to people focusing on experiences for their fathers, instead of gifts.

July 4th is another holiday to watch. It hasn’t been a historically big shopping day, but it is picking up steam online. The 4th saw $1.38 billion in spending this year, a 13.1 percent YoY increase, doubling the online spend from two years ago. Among their purchases, shoppers took the opportunity to beat the crowds and prep for barbecues online—the holiday saw the most hot dog sales of the year, passing even Memorial Day 2018 and Labor Day 2017.

Amazon Prime Day (running July 16 through the early hours of July 18 this year) may not be an official holiday, but it’s beginning to look like one when it comes to e-commerce—including spending that extends far beyond Amazon. “Prime Day isn’t just about Amazon anymore. It has a halo effect with other retailers following suit with online sales. To get the best deals, consumers compare prices across sites. So, if they don’t find the sale they want on Amazon, they may decide it’s time to commit at another retailer,” says Taylor. This year, large retailers (over $1B+ in revenue) saw a 54 percent lift in sales on Amazon Prime Day versus an average Tuesday (see CMO.com article for more detail about Amazon Prime Day).

Back-to-school shopping is another major event to watch, expected to culminate in big sales and significant spending on Labor Day. The Digital Dollar team predicts that this year’s back-to-school season will begin on July 23 and drive $58 billion in online spending—the first time it’ll top $50 billion. If past trends hold, Americans will use the season to buy 85 percent of the erasers, 72 percent of the glue, and 66 percent of the backpacks they’ll purchase all year.

For Labor Day itself, the Digital Dollar team forecasts YoY growth of 19 percent, making it the first $2 billion day of 2018, and the only one we’re likely to see outside of the November and December holiday shopping season.

“On Labor Day, consumers take advantage of a little time off from work to wrap up their school shopping and snap up end-of season bargains. We think it’s one of the rising holidays that that savvy retailers can really maximize for sales and building customer loyalty,” says Taylor.

The U.K. isn’t on the holiday bandwagon, but they’re way ahead on groceries

The quarter’s Digital Dollar, which also tracks U.K. spending, found steady ecommerce growth there too, but without the holiday spikes we see in the U.S. In fact, spending was relatively low on Good Friday and took a significant dip on the day of the royal wedding.

The U.K. is ahead on several measures of e-commerce. According to a Digital Dollar survey of more than 1,000 U.S. and U.K. consumers, more than half of U.K. shoppers have gone online for groceries and 40 percent buy most of their groceries online. Among Americans, only one-third report that they’ve shopped online for groceries at all this year.

In the U.S., online grocery shopping is strongest among younger shoppers (half of millennials have shopped online for groceries). Among their shopping trends, the Digital Dollar is tracking a rise in organic grocery purchases, a trend that began before Amazon acquired Whole Foods. Organic grocery shopping is growing fastest in Vermont, Oregon, and Maine. And across the board, there’s a trend toward vegetarian options. Veggie burgers tripled their share of the burger market over the last three years, and alternative milks, especially almond milk, are beginning to increase their share of the overall milk market.

Behind the numbers for Adobe’s Digital Dollar and DPI

Adobe leverages Adobe Sensei, Adobe’s artificial intelligence and machine learning framework, to identify retail insights from trillions of data points that flow through Adobe Analytics, part of Adobe Analytics Cloud in Adobe Experience Cloud. Adobe’s Digital Dollar, the most comprehensive set of insights and predictions of its kind in the industry, is based on an analysis of one trillion visits to over 4,500 retail sites and 55 million SKUs. Adobe Analytics measures online transactions at 80 of the largest 100 U.S. web retailers, based on Internet Retailer’s 2017 Top 500 eGuide, an independent source that measures online commerce technologies.

You can find more data and details from our new Digital Dollar report here.