As Q1 of 2021 comes to a close, analysts are trying to project what consumer habits will be. With the coronavirus vaccine's rollout, some experts expect consumer spending habits to return to "normal" with brick and mortar picking back up. Still, the numbers might tell us otherwise.
Growth in a Pandemic
According to a new report by Adobe's e-commerce division, due to the COVID-19 pandemic, consumers in the US spent $844 billion online. That is between March 2020, when the pandemic began in the US, through February 2021. Though experts expected continued growth in consumer e-commerce spending, Adobe projected that the pandemic boosted online shopping by $183 billion.
TechCrunch noted about the report, "The pandemic has served as an accelerant to many industries, pushing them years ahead of where their natural growth would have otherwise taken them." TechCrunch is correct. E-commerce, initially before the pandemic, projected a slow, 5-6% growth annually. Adobe notes that the pandemic caused what is equivalent to a 20% boost in e-commerce revenue. Analysts aren't surprised by the increase since we automatically saw consumers turning online at the beginning of the pandemic.
Are These Numbers Here to Stay?
Adobe's analysts say, "Yes, they're not only here to stay, but to grow!" The company's analysts noted that the first two months of 2021 have already seen online consumer spending of $121 billion in the US. That is a 34% year-over-year increase. Despite overall record-high unemployment in multiple states, consumers continue to spend online. Adobe projects that what is driving this spending is the increase in buy now pay later systems. Buy-now-pay-later services increased 215% year-over-year.
Adobe also said that both in-store and curbside pickup services have grown by 67% year over year as of Feb. 2021. They conducted a survey, finding that consumers like this hybrid way of shopping. 30% of Americans prefer pickup over standard delivery.
Keeping Up With Demands
Companies are still having trouble keeping up with demands. In 2020, consumers saw the peak of "out of stock" messages in July, with 3x times higher than average. January 2021, consumers saw 4x higher than average out-of-stock messaging. Though this sign might be upsetting for consumers, it does represent an uptick in consumer spending. This higher than average "out of stock" message might also be due to freight problems from overseas. The pandemic has caused freight to be stock at either side of the hemisphere with no work on site. Essentially, companies are trying to catch up as the world starts to open up with the rollout of the vaccine.
The Future of E-commerce and Consumer Spending
Adobe experts say that the US will reach $1 trillion spent on e-commerce by 2022, easily. Other experts agree. PYMNTS recently did a "Pandenomics" report, saying even consumers who plan to get vaccinated are "very" or "extremely" unlikely to go back to shopping in stores. They found that around 75% of those surveyed believe that they will keep up their online activities at least somewhat as often even after the pandemic subsides.
Though only time will tell, it seems like e-commerce isn't slowing down anytime soon. Companies are investing more and more in e-commerce that helps with consumer experience. Thanks to new companies focusing on headless e-commerce, faster delivery, and social e-commerce, it will only become more convenient for consumers to shop online.
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