Online Shopping During COVID-19 Exceeds 2019 Holiday Season Levels

Consumers in the United States have shifted a significant part of their shopping online because of the COVID-19 pandemic, according to our May 2020 Digital Economy Index (DEI), which tracks the state of e-commerce.

The key finding in the May analysis is that e-commerce shopping levels during COVID-19 (April to May) were higher than what retailers saw during the 2019 holiday season (November to December). Indeed, consumers spent over $153 billion online in the last two months ($70.2 billion in April and $82.5 billion in May), which is 7% higher than the $142.5 billion spent online during November and December 2019. Additionally, the recorded online spend is $52 billion more than what retailers typically see during April and May.

“COVID-19 has changed business forever,” says John Copeland, VP of customer and marketing insights at Adobe. “We think that over the next couple of months we will see an even bigger focus on experience-driven e-commerce, as the competition heats up where consumers are now putting so much of their attention online.”

According to the analysis, U.S. digital purchasing power was up 1.4% YoY in May 2020, which means consumers can now purchase goods for $1.00 that were worth $1.01 in May 2019.

The Adobe DEI, powered by Adobe Analytics, is based on over a trillion anonymized and aggregated visits to retail websites and tens of millions of product SKUs from 80 of the top 100 U.S. retailers. With such an accelerated push to online shopping since the advent of COVID-19, the DEI is measuring all commerce transactions in the United States and able to accurately reflect the full state of consumer spending. Below we take a deep dive into May’s findings and what they mean for the future of commerce.

People are still using their mobile devices to shop—even at home

Despite the fact that people generally spent more time at home in May, smartphone adoption continued to accelerate. In fact, the share of online sales driven by smartphones actually increased with the spike in e-commerce activity due to the pandemic.

“When our team began digging into the May numbers, a lot of us expected that we’d be seeing a massive surge in desktop-driven commerce, since stay at home orders across the United States meant less people on the go,” Copeland says. “But we’re actually seeing that as consumers remain away from their office desks, they still opt to shop through their smartphones.”

Share of products purchased through smartphones increased by 10% in May compared with January (pre-COVID-19). And new consumers who were shopping online for the first time were doing so from their smartphones.

The BOPIS curve is flattening

BOPIS (buy online/pickup in store) maintained a YoY growth of 195% in May, leveling off after the sharp upward trajectory seen in March and early April. “We’ll likely see this growth draw down further as stores reopen,” Copeland forecasts.

According to our companion survey of 1,000 consumers, conducted in parallel with this analysis, 23% of online shoppers said they prefer buying online and picking up in store or curbside over in-home delivery.

Memorial Day broke a new milestone

After barely surpassing $2 billion in spend last year, Memorial Day 2020 sales reached $3.5 billion this year, a 63% YoY growth. Interestingly, 2019 Memorial Day revenue was 1.5x above the average day in May, while this year it was only 1.3x larger despite the fact that discounts were better by an average of 3% YoY.

After sizable online sales and discount increases in both March and April, May brought more muted increases and some decreases for some of the major online categories as reopening phases began in many states across the country.

U.S. online grocery daily sales saw a 14% decrease in May, while consumer electronics daily sales were up 11%. Daily online apparel sales increased by 12% in May as prices remained low after dropping heavily in April.

Also of note: Computer prices increased by 2.6% in May compared with April, leading to the third month in a row of price increases the category has seen this year.

“Supply chain factors and shortages have likely contributed to the reversal in deflationary pricing the category experienced through much of last year,” Copeland explains. “The recent COVID-19-related impact resulted in flat YoY change for computer prices in May.”

Flight bookings up, as are prices

Flight bookings, the analysis shows, are growing, tripling from April to May. No region was immune from travel impact, but the Northeast showed the biggest decline in both departures (-78%) and arrivals (-79%) between January and mid-May.

As a destination, the southern states in the U.S. show better recovery since April 1 than other regions.

To make up for losses in sales, airlines appear to be increasing flight prices after having experienced significant deflation in March and April, but overall airline pricing is still down 28%. Additionally, bookings from the Northeast (where places like New York City and New Jersey saw some of the highest numbers of COVID-19 cases) are seeing the slowest growth compared with the rest of the country, suggesting people are still nervous about traveling in this area.

See more insights from Adobe’s Digital Economy Index (DEI) report.