February 29, 2024

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Grocery, Home Furnishings Continue To Drive Ecommerce Growth

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Online purchases of groceries and home furnishings surged during the first years of the pandemic, and those categories have continued to show the strongest ecommerce growth into this year, according to data released today by Adobe Analytics.

Grocery and furniture and home furnishings had the biggest growth in 2022 of the four top ecommerce categories, Adobe reported. Online spending on grocery rose 10.8% in 2022, to $86.8 billion. Home furnishing spending rose 10.2% to $126 billion.

That growth has continued this year. In February, the grocery category was up 26.7% year-over-year, and the home furnishings category was up 12.9% year-over-year.

The convenience in shopping online for groceries and home furnishings that consumers discovered during the pandemic has caused them to continue to shop online in those categories, Vivek Pandya, lead analyst, Adobe Digital Insights, said in an interview. Inflation also has encouraged consumers to look for price comparisons online, he said.

Apparel and electronics, the other two categories in the top four, had significantly weaker results in 2022. Electronics, the largest category in terms of dollars spent, had 4% growth in 2022, to $202 billion. Apparel sales fell 3.8%, to $171.6 billion in 2022.

The report, released at Adobe Summit, the tech conference being held this week in Las Vegas, also found that rising prices are causing consumers to seek out cheaper goods online. The Adobe Digital Price Index, which tracks monthly and yearly fluctuations in online prices, shows that from January 2019 through February 2023 sales in the cheapest tier of grocery pricing rose 35.6%, and in electronics sales of cheaper products were up 57.1%.

“This is really indicative of a very price-sensitive and price-conscious consumer who is shifting away from buying the higher ticket items, and more willing and open to settling for lower-cost goods,” Pandya said.

Cost pressure also is driving increased use of buy now, pay later (BNPL) options for grocery and home furnishing purchases, according to the Adobe report. In January and February of this year, the grocery share of BNPL orders was up 40%. The share for home furnishings was up 38% during the same period.

Consumers “are dealing with grocery orders that can easily get into the $200 and above range,” Pandya said. “That puts them in a position where they’re having to stretch their budget and figure out ways to finance their orders,” he said.

Adobe also reported that based on the growth in mobile purchases made in 2022, it expects mobile shopping will pass desktop this year. During Cyber Week 2022, the majority of sales were made on smartphones for the first time ever, according to Adobe.

The growth of mobile shopping makes it increasingly essential that retailers make mobile purchasing easy. “The large billion-dollar-plus retailers that have invested in that are seeing the gains. They’re seeing higher growth than retailers that haven’t put as much effort there,” Pandya said.

The Adobe report is based on Adobe analytics data covering over one trillion visits to U.S. retail sites, encompassing 100 million SKUs and 18 product categories.

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