Adobe Digital Economy Index: Tracking the State of Ecommerce During COVID-19 and Beyond
In an interconnected and increasingly digital world, online commerce might actually be the largest global “economy” on the planet. And this is especially evident over the last couple of weeks as consumers increasingly shopped online due to COVID-19.
As part of our Adobe Summit 2020 digital on-demand experience, today we announced the Adobe Digital Economy Index, (DEI) powered by Adobe Analytics, to provide consumers, companies and policy makers a dynamic look at the state of the global online economy.
Through DEI, consumers can get a better understanding of the best times to buy as well as what to buy. Companies will get insight into local and global trends that can help them better manage their multi-national businesses. And, policy makers can get a much-needed, consistently updated rapid read on the digital economy, with key data that can be used to anticipate broader economic trends. Currently, the DEI looks at the U.K. and the U.S., but will soon expand to every country that has a significant digital economy.
“What makes the DEI special is that it’s able to quickly and accurately report figures in just days, and uniquely includes data on what people actually buy and what they pay for their products, rather than just scrape prices from websites or rely entirely on survey data,” said John Copeland, vice president of marketing and customer insights, Adobe. “With the DEI, we’re excited to work in lockstep with businesses, governments and policy makers, and researchers to better understand and capture the effects of the world’s digital economy.”
The DEI analysis is currently based on trillions of anonymized and aggregated visits to retail sites and tens of millions of product SKUs from 80 of the top 100 retailers in the United States. We’ll also add data from other global economies over time. The DEI was developed by our Adobe Digital Insights team, in collaboration with two world-renowned economists: Austan Goolsbee, professor of economics at The University of Chicago’s Booth School of Business, and former chairman of the Council of Economic Advisers for President Obama, as well as Pete Klenow, professor, department of economics at Stanford University.
Ecommerce trends amid COVID-19
The key finding for March 2020: The digital economy has been growing faster than the economy as a whole in March. In fact, ecommerce has grown 25% from March 13 – 15 compared to baseline period of March 1 – 11, driven primarily by online grocery shopping due to the ongoing situation with COVID-19. States like California, New Hampshire and Oregon saw the highest lift in online sales. Additionally, daily online grocery sales have doubled YoY for the two-week period.
“Seeing the incredible upswing in ecommerce spending in light of the COVID-19 outbreak suggests that there’s a strong need for an understanding of how pricing trends and inflation in online sales compares to and impacts those same trends in overall sales,” Copeland said.
The DEI finds that what people buy online is expanding as one-day delivery, buy online pickup in-store, and other fulfillment innovations make more products digitally accessible. And, price pressures in areas such as apparel, TVs and other categories is keeping overall online prices down. However, as more price-stable and thinner margin goods such as online groceries are being bought online, the overall descent of online prices is also flattening.
COVID-19, the analysis found, is further pushing overall online inflation down. A primary driver: reductions in flights and the decrease of flight prices because of mandates for social distancing and travel restrictions. Additionally, consumers are seeing significantly more “out of stock” pages, according the DEI, as supply chains are impacted by COVID-19 online shopping sprees.
COVID-19 concerns increased online purchases January through February 2020 as well, according to the analysis. Virus protection category products such as hand sanitizer, gloves, masks and antibacterial sprays surged 817%. During these two months, over-the-counter drug purchases increased by 198% for cold and flu medications and 152% for pain relievers. Toilet paper online sales have spikes by 186%, while nonperishable canned foods and shelf-stable food sales have increased 69%.
“Companies need to pay extra special attention to their digital and eCommerce experiences right now,” advised Adobe’s Copeland. “Consumers are less forgiving during a time like this, and the companies that meet and exceed their needs will build loyalty and life-time value.”