Vivek Pandiya watches online spending for a living.
He is the lead analyst at Adobe Digital Insights, which tracks online spending in the United States and elsewhere,.
Online spending is growing, but the how of the spending and even the why of the spending is evolving, he says.
In the first four months of 2024, spending was up 7% to $336 billion from a year earlier. More than half of the spending is now made via a mobile device, and Adobe Analytics expects 52.5% of 2024 holiday shopping to be done via mobile.
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There’s three trends that Adobe and Pandya see going on in retailing.
Consumers, weary of the inflation pressures that erupted from the Covid-19 pandemic, are trading down and happy to do so. Electronics are still the biggest category, followed by apparel, but groceries now constitute more than 10% of online spending.Several online moments during the year have developed into cultural magnets.
The first trend makes sense. Remember the Consumer Price Index in June 2022 was up 9.1% from a year earlier, forcing the Federal Reserve to raise interest rates to rein in price pressure.
The hunt for value
Here’s how Adobe sees it. Since 2019, the company has tracked online sales data from retailers huge and small and divides the sales into 18 categories.
Each, in turn, is broken into four subcategories based on price.
Data shows that shoppers of all demographics are increasingly likely to shop for price. If the price for one product is rising too quickly at one site, the customer may go elsewhere .
There isn’t much difference between the motivations of affluent buyers and less-affluent shoppers, Pandya said.
“They shop and get value wherever they can,” he said in an interview.
This trend has become increasingly intense, Pandya said, partly because of inflation and economic uncertainty.
Amazon’s Prime Day creates an event
Also adding to the intensity is Amazon.com’s annual Prime Day sale that has been launched in early July since 2015.
The two-day Prime Day extravaganza grabs a lot of attention from news outlets, not least because the sales Amazon generates: Some $12.7 billion in sales in the United States alone during the 2023 event.
Amazon holds Prime Day sales in other countries.
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Last year, these included Austria, Australia, Belgium, Brazil, Canada, China, France, Germany, Italy, Japan, Luxembourg, Mexico, the Netherlands, Portugal, Saudi Arabia, Singapore, Spain, the United Kingdom, Sweden and Poland.
More importantly, it forces just about all retailers to adjust what they do, whether you’re talking about Walmart (WMT) , Target (TGT) , Nordstrom (JWN) or the local appliance store.
An Amazon customer in Brazil starts to check out Amazon Prime Day.
The result: Prime Day is now a chief anchor of a giant sale season that runs for a good part of July when retailers sense shoppers are ready to use their credit cards.
Consumers, meanwhile, are interested in deals because, as Pandya notes, they’ve become increasingly price-sensitive. And they now more willing to push the buy buttons on their phones and pay later.
And at the most elemental level, some shoppers simply want to tell their about the steal they got in the sale.
And, so, the retailers are offering as many deals as they can: electronics, footwear, earphones, clothes, books, appliances.
The sales have another benefit: They help retailers move out old inventory and gets them set up for what Pandya says is the next big retailing cultural event: The Holidays.
The next big things starts in the late fall
The back-to-school season, which starts in August, isn’t quite the cultural event where the fun is getting a deal.
The Holiday Shopping Season is, however, and it gets longer and longer. You know it has started if you start seeing Christmas decorations in a Costco Wholesale (COST) store some time after Labor Day.
The big action hits its peak crescendo between the day after Thanksgiving (aka Black Friday) and the following Monday (aka Cyber Monday).
The idea of big seasonal sales is hardly new. Stores in many countries run big January sales after the holidays to clear out their shelves.
Department stores in Paris run a month-long sale — les soldes d’été— every summer. (The earliest version of the sale has been around since the early 19th century.)
You can buy designer clothes, perfume, shoes, home furnishings, the Monopoly game in different languages, and, if you’re lucky, a baseball cap from Louisiana State University.
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