E-Commerce Growth Slowed in July, But Still Totals $435 Billion for the Year So Far
After months of consistent, sharp growth, e-commerce sales have begun to slow down, according to Adobe’s Digital Economy Index for July. While reported figures are still substantially higher than July 2019, the rate of increase has begun to fall as retail stores reopen around the country and consumers return to multichannel purchasing.
The index, which uses Adobe Analytics to track online sales, found that online shopping reached $66.3 billion last month — a 55% increase year-over-year. Despite these high figures, previous months have reported considerably higher growth, with June accounting for a 76% increase.
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Vivek Pandya, senior digital insights manager at Adobe Digital Insights, suggested that this may be partially because “spending levels dropped as households tightened their belts due to falling employment levels and looming cutbacks in unemployment benefits.”
However, experts also suggest that the decline is a sign that digital purchasing has started to reach market saturation, rather than an indication that people are less interested in e-commerce now.
The timing also coincides with the reopening of stores in many states, allowing shoppers to settle into their preferred mix of on- and offline sales. In previous months, e-commerce was the only method for many people to access goods. With these increased options, Adobe predicts that some consumers will resume in-store shopping, but the shift toward online could be permanent.
“It’s important to note that while the growth in e-commerce is down from June, 55% growth in July YoY is still really strong,” said John Copeland, VP of marketing and customer insights at Adobe. “The fact that even while states are starting to open up, the numbers remain so much higher than typical proves that things will never really go back to ‘normal.’ E-commerce is more embedded into our lives than it has ever been before, and that is irreversible.”
The change in digital sales is not evenly split among states in the U.S. — states that had already reopened before the start of July reported an 8% smaller increase YoY than those that still had shelter-in-place orders at the start of the month. Overall, Adobe reported that the total online spend during the pandemic has increased by $94 billion, amounting to $434.5 billion spent in the first seven months of this year.
Looking specifically at fashion categories, apparel reported a month-over-month price decrease of 4.6%, but its year-over-year online sales growth remained a positive 3.6%. Footwear reported a strong pandemic performance, experiencing a 33% increase year over year since March.
“Online shopping has seen massive growth through 2020 as households have adjusted to new ways of shopping during the pandemic,” said Pandya. “July e-commerce growth backed off its record highs. Despite this, e-commerce remains strong, with sales expected to surpass the total for 2019 by Oct. 5 of this year, well before holiday season sales begin to ramp up.”
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