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Grocery comes of age as ‘major’ online retail category

Adobe Digital Economy Index pegs 2021 sales at more than $79 billion

Russell Redman

March 15, 2022

4 Min Read
Adobe Digital Economy Index-grocery major online category_1.png
Grocery accounted for 8.9% of the $885 billion in overall U.S. online retail spending in 2021, Adobe Analytics data show.Adobe

Though somewhat late to the online game, grocery has quickly grown into a “major e-commerce category,” fueled in the past two years by the COVID-19 pandemic, according to Adobe Analytics.

Grocery accounted for 8.9% of the $885 billion in U.S. online retail spending for 2021, up from 6.3% in 2019 and down slightly from 9.1% in 2020, which San Jose, Calif.-based Adobe called a “breakout year for the category” as consumer demand for online grocery shopping exploded with the onset of the pandemic.

The Adobe Digital Economy Index tracked e-grocery spending at $79.2 billion last year, up 7.2% from $73.7 billion in 2020, when the category saw sales jump 103%. Currently, consumers spend an average of $6.7 billion monthly online to buy groceries, more than double the $3.1 billion spent pre-pandemic. 

Looking ahead, Adobe expects grocery to surpass $85 billion in online spending for 2022 and become a top e-commerce category over the long term, exceeding $100 billion in annual online sales.

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“E-commerce is being reshaped by grocery shopping, a category with minimal discounting compared to legacy categories like electronics and apparel,” Patrick Brown, vice president of growth marketing and insights at Adobe, said in a statement. “It highlights a shift in the digital economy, where speed and convenience are becoming just as important as cost savings.” 

Related:Regular online grocery users drive supermarket e-commerce sales

Over the first two years of the pandemic — March 2020 to February 2022 — U.S. consumers spent $1.7 trillion online, $609 billion more than the previous two years, Adobe noted. The $885 billion spent online in 2021 marked an 8.9% gain from $812.8 billion in 2020, when U.S. total e-commerce spending had surged 41.4% from $574.9 billion in 2019. This year, Adobe projects the U.S. annual online spend to top $1 trillion for the first time.

Grocery joined electronics and apparel as three categories that represented 41.8% of U.S. online spending in 2021, the Adobe Digital Economy Index showed. 

The largest e-commerce category was electronics, which drove $165 billion in online spend last year — up 8% after a 26.8% jump in 2020 — and accounted for 18.6% of overall online sales. While the COVID surge curtailed demand for apparel in 2020, modest growth in 2021 lifted the category’s online spend by 8% to $126.2 billion, a 14.3% share of total e-commerce spending. Adobe forecasts online expenditures at more than $174 billion for electronics and over $130 billion for apparel in 2022.

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Higher prices drove $32 billion of the $1.7 trillion in consumer e-commerce spending over the pandemic’s first two years, Adobe reported, adding that online price inflation was first observed in June 2020 and has lingered for 21 straight months. Consumers especially felt the impact last year, when elevated prices accounted for $22 billion in online sales growth versus only $4.7 billion in 2020. 

Related:Online grocery shopping activity projected to climb

Through February 2022, $3.8 billion in e-commerce growth stemmed from inflation, Adobe estimated. Price hikes haven’t blunted demand, however, as the $138 billion in online spend through 2022’s first two months marks a 13.8% year-over-year increase.  Overall for 2022, Adobe projects that inflation could account for consumers paying as much as $27 billion more online for the same amount of goods. 

Supply chain disruptions triggered by COVID led to 60 billion out-of-stock (OOS) messages between March 2020 and February 2022, raising consumers’ odds of encountering an OOS message 235% to one in 59 pages from one in 200 pages pre-pandemic, according to Adobe. From November 2021 through February 2022, online customers saw more than 12 billion OOS messages, a trend expected to continue this year. 

Increased consumer health and safety concerns amid the pandemic boosted already strong adoption of curbside pickup, Adobe added. So far in 2022, curbside pickup represented 20% of all online orders among retailers offering the service and has become a major fulfillment method with durable demand, driven by its speed and convenience, Adobe said.

The Adobe Digital Economy Index is based on analysis through Adobe Analytics that covers over 1 trillion visits to U.S. retail sites and more than 100 million SKUs in 18 product categories.

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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