Digital commerce jumped 49% in April and e-commerce companies experienced Black-Friday-like sales boosts as Coronavirus drove traditionally offline economic activity online, says Adobe.
Briefly, here are the highlights:
Shopping bags
But prices are also up in some categories, like groceries and electronics.
“As online is absorbing the offline retail economy, some inflation is being observed for the first time in years, especially in categories that have consistently experience online deflation, such as electronics,” Taylor Schreiner, a director at Adobe Digital Insights, said in a statement. “Americans are used to things getting cheaper online, but that trend may be ending, and online commerce may never be the same. It appears that COVID-19 has accelerated that process.”
Adobe released its Digital Economy Index today, which analyzes over a trillion online transactions from 80 of the top 100 U.S digital retailers.
The upshot: the economy is changing faster than ever before.
While e-commerce has been eating traditional bricks and mortar for years, it’s still only a fraction of the full retail landscape: about 12%. That’s changing fast as COVID-19 shifted economic activity online. 50% month-over-month is literally unprecedented. And while the pendulum is likely to rebound somewhat as states like Texas, Georgia and Arizona re-open, some of that consumer behavior shift is likely never reversing.
And digital-native practices like buy-online and pick-up in-store more than doubled in just 20 days.
BOPIS, or buy online and pick up in store, more than doubled in less than 20 days, Adobe says.
“BOPIS orders surged to 208% year-over-year growth in between April 1 – 20 as people continued applying social distancing to shopping to limit their exposure,” Adobe says.
All of this shift is impacting pricing in key retail categories:
In addition, consumer buying behavior is changing as people are staying home more and going to work in an office less:
It’s not just that the digital economy is growing faster than the economy as a whole, as has happened in the past. It’s that the economy as a whole is shrinking while the digital economy is growing. And that’s changing everything.
“Online shopping has become the primary means of commerce [for] populations around the world as purchases previously made in person are shifted online,” Adobe says.
Companies that are built for e-commerce are doing well. Retailers that have not invested in digital transformation and digital commerce, or in digital-physical hybrid models, are in deep trouble. Amazon’s stock price is near a five-year high as the company valuation is over $1.2 trillion.
Meanwhile, Macy’s, Pier 1, and GameStop are shutting down locations that are underperforming. Nordstrom, Sears, Walgreens and Forever 21 as also looking at store closures. But Walmart has navigated digital fairly well in the past few years after a slow start, and its stock price is also near a five-year high, valuing the company at $350 billion.
One thing is clear: constant and rapid change is the new normal in retail.
“Companies are adjusting to daily changes in demand, supply, and labor availability,” says Adobe.