Adobe Analytics — buy now, pay later usage driven by home furnishings and groceries

Adobe Analytics — buy now, pay later usage driven by home furnishings and groceries

At Adobe Summit — the world’s largest digital experience conference — Adobe released new US ecommerce insights into recent changes in the digital economy. The report reveals resilient online shopping demand for groceries and home furnishings, categories that previously struggled to gain traction, and reflects the lasting impacts of pandemic-related habits. Yet at the same time, continued economic uncertainty is driving many shoppers to delay payment for purchases by using buy now, pay later (BNPL) options online.

Based on Adobe Analytics data, the report provides the most comprehensive view into US ecommerce by analyzing commerce transactions online, covering over 1 trillion visits to US retail sites, 100 million SKUs, and 18 product categories. Adobe Analytics is part of Adobe Experience Cloud, relied upon by over 85% of the top 100 internet retailers in the US to deliver, measure, and personalize shopping experiences online.

Home furnishings and groceries driving growth online

In 2022, consumers spent over $126 billion on home furnishings, a 10.2% increase year-over-year (YoY), as well as $86.8 billion on groceries, a 10.8% increase YoY. This strong growth contrasts with electronics, which remains the top category by total spending ($202 billion), but only grew 4% YoY. Similarly, though apparel was another major category and drove $171.8 billion in 2022 spending, the number actually fell by 3.8% YoY.

These trends have persisted in recent weeks. In February 2023, the home furnishings category grew 12.9% YoY, driving $9.4 billion in spending for the month. Groceries grew even more substantially at 26.7% YoY, driving $8.4 billion in spending. Demand for electronics slowed following a record holiday shopping season, falling 5.4% YoY to $13.6 billion, while apparel fell 0.6% YoY, driving $11.3 billion in February spending.

“Ecommerce demand has remained resilient in an uncertain economic environment, driven in part by lasting pandemic habits where consumers had no choice but to leverage online food and home furnishing shopping services,” said Vivek Pandya, lead analyst of Adobe Digital Insights. “Now consumers have embraced the rich ecommerce experiences that made them feel comfortable getting these necessities delivered to their doorsteps, making these categories new growth drivers in the digital economy.”

Buy now, pay later continues to grow

Rising costs of living have pushed consumers toward buy now, pay later services that allow them to pay for purchases over time. In 2022, the share of online purchases using BNPL grew by 14% YoY, with revenue from BNPL growing 27% YoY. In the first two months of 2023, BNPL order share was up by 10% YoY, though revenue fell by 19% YoY, indicating that consumers are using this payment method for smaller purchases.

To understand the types of goods that shoppers want to delay payment for, Adobe also looked at BNPL usage across major categories, including groceries, home furnishings, apparel, and electronics. In the first two months of 2023, groceries’ share of BNPL orders grew a staggering 40%, while home furnishings grew by 38%. By contrast, apparel only grew by 8%, and electronics fell by 14%.

“The rise of buy now, pay later usage for groceries tells us that consumers are likely making bigger purchases online to take advantage of special promotions and stock up on staples, thus managing living expenses in more flexible ways,” explained Pandya. “The strong online growth of home furnishing purchasing is expected to bolster buy now, pay later adoption, given the higher ticket prices in this category.”

Additional insights from Adobe Analytics

Online inflation is pushing consumers toward cheaper goods

Adobe also released new insights today via our Digital Price Index (DPI), looking at how elevated prices online impact the types of products consumers are drawn to. Adobe’s DPI provides the most comprehensive view into how much consumers pay for goods online, complementing the Bureau of Labor Statistics’ Consumer Price Index, which captures offline prices.

Across major categories, Adobe separated goods into four pricing tiers and observed changes from January 2019 through February 2023. The DPI shows that over this time, the cheapest pricing tier grew its share of sales significantly across categories including groceries (up 35.6%), electronics (up 57.1%), apparel (up 36.1%), and home furnishings (up 42.8%). It shows that in an uncertain economic environment, consumers are willing to either forego name brand foods, or to buy a more basic version of an electronics product such as speakers or televisions.

Learn more about Adobe Analytics, the engine behind this research, and how it can help you uncover insights to help your business.