U.S. consumers continued to spend online, especially for groceries. Ecommerce sales overall in July rose 55% year-over-year (YoY), hitting a record of $66.3 billion, according to Adobe Digital Economic Index data released Tuesday.
“COVID was an event that forced people to buy certain types of goods online they might not have done in the past,” said Vivek Pandya, senior digital insights manager, Adobe Digital Insights. “We expect some of this online spend to remain net-new, an elevated spend for the future, as the pandemic wears on and hopefully we see better outcomes.”
One of those outcomes for the grocery industry emerged Tuesday when The Kroger Co. announced it would add 50,000 additional items to Kroger Ship this fall with help from the marketplace Mirakl, which supports third-party sellers. The move puts the grocery conglomerate in tighter competition with Amazon and Whole Foods.
Pandya also believes that toward the end of the year during the holiday travel season, consumers who decide not to stay put or not travel in the same way they did in prior years, might have extra disposable income to spend online.
The data released Tuesday is part of the Adobe Digital Economic Index that analyzes online sales and consumer transactions for July 2020 and found that despite record setting sales, this marked a slowdown compared with May when online sales were up 77.8% YoY and in June when sales rose 76% YoY.
July sales surpassed increases in March and April that rose 25% and 49% YoY, respectively.
Since March, COVID-19 has resulted in an estimated $94 billion in “extra” online spend for a total of $434.5 billion from January to July. At current growth levels, online spend will exceed all of 2019 by October 5, according to the estimates of the index, which analyzes more than one trillion online transactions across 100 million product SKUs.
“Some of the offline spend did migrate to online, but we also imagine some new online spend did occur,” he said.
Increases began in March, with the peak occurring in May around Memorial Day weekend. Several factors drove down spend in June and July including the re-opening of stores and people becoming more comfortable entering brick-and-mortar stores.
Analysis shows states that have already re-opened are seeing an 8% smaller YoY increases in online sales in July. Pandya says another factor was people waiting for a second stimulus check.
Rhode Island, New Mexico, Oregon and Vermont saw the highest increase in online spend YoY, while Kansas, Hawaii, Oklahoma, and Iowa saw the lowest YoY increase in e-commerce spending.
Buy online and pick-up in stores continuesto see strong YoY growth, with July increasing slightly in use -- at 23.3% compared with June, amid a second wave of increases in COVID-19 cases across the U.S.
Apparel prices fell 4.6% month-over-month, while the category's YoY growth rose 3.6%.