US E-commerce to Hit $1 Trillion in 2022 | Pandemic Impact

Significant Surge in U.S. Online Shopping Driven by the COVID-19 Pandemic

A recently published report from Adobe’s e-commerce division reveals that U.S. online shopping experienced a substantial increase of $183 billion as a direct result of the COVID-19 pandemic. This growth was measured from March 2020, coinciding with the onset of the pandemic in the U.S., through February 2021.

During this period, total online consumer spending reached $844 billion nationwide. Furthermore, the calendar year 2020 alone witnessed $813 billion in online sales, representing a 42% increase compared to the figures from 2019.

Perspective on the Growth

Adobe highlights that the $183 billion increase nearly matches the total online spending during the 2020 holiday season, which amounted to $188.2 billion between November and December. The firm anticipates continued expansion in the coming years, projecting to surpass $1 trillion in online sales by 2022.

The pandemic acted as a catalyst for numerous industries, accelerating their growth trajectory beyond what would have been naturally expected.

Factors Contributing to E-commerce Expansion

E-commerce specifically benefited from the circumstances created by the pandemic. Stay-at-home directives, the temporary closure of nonessential retail establishments, and a widespread shift from in-person shopping to online commerce all played significant roles.

Adobe asserts that the pandemic triggered a “rare step change in online spending,” equivalent to a 20% boost, and predicts these effects will persist even as the pandemic subsides.

Recent Spending Trends

Analysis indicates that the first two months of 2021 (January-February) already saw $121 billion in consumer spending within the U.S., a 34% increase year-over-year.

The “buy-now-pay-later” payment option for online purchases has also seen a dramatic rise, increasing by 215% year over year. Orders utilizing this method are, on average, 18% larger, further contributing to the overall sales growth.

Future Projections and Lasting Changes

Adobe forecasts that current growth rates will continue, resulting in calendar year 2021 sales ranging from $850 billion to $930 billion. The expectation is that 2022 will mark the first year U.S. e-commerce reaches $1 trillion in sales.

Beyond the increase in sales volume, the pandemic may have instigated enduring changes in consumer shopping habits and purchasing preferences.

Hybrid Shopping Models

Adoption of both in-store and curbside pickup services grew by 67% year over year as of February 2021. A recent Adobe survey revealed that 30% of U.S. consumers now actually prefer pickup to standard delivery, demonstrating a strong receptiveness to this hybrid shopping model.

Impact on Traditional Sales Events

The increased prevalence of online shopping may have implications for traditional “sales holidays.” For example, Memorial Day 2020 commerce experienced 20% less growth than other days that week, resulting in $32 million less revenue. Similar trends were observed during Labor Day and Presidents Day.

The period between Thanksgiving and Cyber Monday 2020 also contributed 9% less to overall holiday revenue share, equating to a loss of $600 million.

Supply Chain Challenges

Some indications suggest that retailers were initially unprepared for the surge in online shoppers. “Out of stock” messages became increasingly common, peaking in July 2020, with stockouts being three times higher than pre-pandemic levels. Elevated stockout rates, four times pre-pandemic levels, persisted into January 2021, particularly for groceries, pet products, and medical supplies.

Growth in Online Grocery

Online grocery shopping has also experienced significant growth and shows no signs of slowing down. In February 2021, this category was up 230% compared to January 2020, prior to the pandemic.

Data Source and Methodology

Adobe’s data is based on trends observed directly within Adobe Analytics, which tracks over 1 trillion visits to U.S. retail sites and more than 100 million SKUs. This provides a comprehensive and real-time view of the U.S. e-commerce landscape and consumer spending patterns.

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