People have chosen lower-cost items they buy online: report

Adobe identified personal care, apparel, grocery as categories where online shoppers are trading down

Shoppers have been trading down in online purchases.

That was what Adobe Analytics said Thursday in a report that also showed online spending in the fourth-month period spanning January to April hit $331.6 billion in what represented a 7% year-over-year increase.

Its data indicated goods on the lower-cost end in categories like personal care, electronics, apparel, home/garden, furniture/bedding and grocery have been increasingly favored by online shoppers.

Online shopping using smartphone

Some retail experts and financial lending providers are saying "buy now, pay later" programs are the new layaway. (iStock)

Adobe said its findings about trade-downs came from it monitoring the "shares of units sold in the most expensive and least expensive quartiles" for prices of big e-commerce categories from January 2019 to April 2024. 

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The personal care category saw a 96% jump in the share of the least-expensive goods, while electronics and apparel posted increases of 64% and 47%, respectively, in theirs, according to the company.

Adobe pegged the share of the cheapest goods for grocery as rising 33%. Meanwhile, there was an increase of 42% in the share of the cheapest goods for both home/garden and furniture/bedding.

There has also been trading down in sporting goods, appliances, home improvement and toys bought online, but to a lesser extent, according to Adobe.

online shopping

Adobe Analytics says shoppers have been trading down in online purchases. (iStock)

"Months of persistent inflation has led shoppers to embrace cheaper goods across major e-commerce categories," the company said in its report.

BLACK FRIDAY ONLINE SALES REACH RECORD LEVEL, ACCORDING TO ADOBE ANALYTICS

In March, the consumer price index showed a 0.4% month-over-month increase and a 3.5% year-over-year increase. That index reached a peak of 9.1% in 2022, as FOX Business previously reported.

Nonetheless, Adobe’s report said growth in online spending "remains resilient," pointing to "stable spend" in electronics and apparel and more spending in grocery from January through April of this year.

In that time frame, those categories notched $61.8 billion, $52.5 billion and $38.8 billion in online shopping sales, respectively, according to the company. The categories’ figures also represented increases of varying degrees.

Buying online

"Months of persistent inflation has led shoppers to embrace cheaper goods across major e-commerce categories," Adobe Analytics said in its report. (iStock)

"In an unpredictable economic environment, the latest data from Adobe Analytics shows continued resilience in the digital economy, as consumers embrace new categories online," Vivek Pandya, Adobe Analytics Digital Insights lead analyst, said in a statement. "Groceries is a standout, and Adobe expects that in the next three years the category will be a dominant force in e-commerce that is on par with electronics and apparel in revenue share."

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Overall, purchases by online shoppers will wind up amounting to more than $500 billion for 2024’s first six months, the company said.

It noted the online sales seen this year were thanks to "net-new demand" instead of higher prices.