US consumers spend USD $331.6 billion online in first quarter 2024

Adobe has released new data revealing that consumers in the United States spent USD $331.6 billion online between January 1 and April 30, 2024, marking a 7% year-over-year growth. The findings, based on Adobe Analytics data, offer a comprehensive look into U.S. e-commerce by analysing over one trillion visits to retail sites, 100 million distinct stock-keeping units (SKUs), and 18 different product categories.

The rise in online spending was significantly bolstered by stable expenditures in discretionary categories such as electronics and apparel, alongside a continued uptick in grocery shopping online. Consumers spent USD $61.8 billion on electronics, up 3.1% year-over-year, and USD $52.5 billion on apparel, reflecting a 2.6% increase. In the grocery segment, spending grew by a substantial 15.7%, amounting to USD $38.8 billion for the first four months of the year. Adobe predicts that the first half of 2024 will see over USD $500 billion in online expenditure, illustrating a 6.8% year-over-year growth.

The findings also indicated a surge in the cosmetics category, which Adobe has profiled for the first time. Online spending in this category reached USD $13.2 billion during the same period, registering an 8% year-over-year growth. Vivek Pandya, lead analyst at Adobe Digital Insights, highlighted the sustained resilience of the digital economy, stating that groceries are expected to become a dominant force in e-commerce revenue, rivaling that of electronics and apparel in the next three years.

However, the data also underscored a shift towards more affordable goods across various e-commerce categories due to persistent inflation. Adobe's analysis segmented prices into four quartiles, tracking the shares of units sold in the most and least expensive quartiles from January 2019 to April 2024. The share of the cheapest goods saw a notable increase in categories including personal care (96%), electronics (64%), apparel (47%), home and garden (42%), furniture and bedding (42%), and grocery (33%).

In the context of this trend, the revenue impact was also analysed. For instance, within the grocery category, products with lower inflation experienced a revenue growth of 13.4%, whereas those with higher inflation saw a 15.6% decline. In comparison, the cosmetics category showed a smaller disparity, with revenue from low-inflation goods rising by 3.06% and falling by just 0.34% for high-inflation items, indicating stronger consumer loyalty to brands.

The popularity of the Buy Now Pay Later (BNPL) model has continued to climb, with consumers spending USD $25.9 billion via this method from January to April 2024, an 11.8% increase from the same period last year. Adobe anticipates the continued growth of BNPL, projecting it will account for between USD $81 billion and USD $84.8 billion in spending for 2024, implying a year-over-year growth range of 8% to 13%.

Other key insights from Adobe Analytics showed a shift towards mobile-first shopping, with mobile devices driving USD $156.9 billion in online spending in the first four months of 2024, an impressive 9.8% up from the previous year. During the 2023 holiday shopping season, mobile shopping surpassed desktop for the first time, capturing 51% of revenue share, a trend expected to persist in the coming year.

Marketing investments by retailers saw paid search as the most substantial driver of online sales, responsible for 28.2% of sales so far in 2024. Direct web visits, affiliate partnerships, organic search, and email also played significant roles, with revenue from social media climbing by 5.2% year-over-year but still accounting for less than 5% of total sales. Conversely, organic search contributions dropped by 5.6% year-over-year. Despite fluctuations, strong consumer spending has largely been driven by net-new demand rather than higher prices. According to the Adobe Digital Price Index, e-commerce prices have been declining for over a year, with a 5.6% year-over-year drop recorded in April 2024.