US online retail spending up 7% Jan-April, driven by demand for cheaper products, report says

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US online retail spending: According to a new study by Adobe Analytics, internet retail sales in the US increased by almost 7% between January and April of this year. An increase in the demand for food and other inexpensive consumer goods was the main factor driving this upward trend.

As long-term inflation remains a major worry, consumers have been cutting back on discretionary spending and seeking out more affordable alternatives in a variety of product categories. According to Adobe’s research, there has been a noticeable change in buying habits, with a decrease in the sales share of higher-priced products and an increase in the proportion of cheaper units sold in categories like personal care and groceries. Customers clearly prefer less expensive options, as shown below.

As an illustration of the marked change in consumer preferences towards budget-friendly options, the proportion of the grocery store’s sales that were at the lowest price point increased dramatically from 36% in January 2019 to 48% in April 2024.

In response to this changing shopping pattern, big-box stores like Walmart and Target have revised their annual predictions and introduced new private-label food items priced below $5 and $10, respectively.

In response to rising prices in necessities like food, gas, and housing, customers are adjusting their purchasing patterns, according to Adobe’s Lead Insights Analyst Vivek Pandya. Even if this has helped keep spending in some areas going strong, it also shows how hard it is for consumers to deal with price increases.

Online purchases increased to $331.6 billion from $309.8 billion in the corresponding time last year. It is worth mentioning that the research indicates that grocery expenditure grew at the fastest rate of 15.7 percent.

According to Adobe’s projections, internet spending is expected to surpass $500 billion in the first half of 2024, representing a 6.8% rise from the previous year. The research offers useful insights on altering customer behavior patterns in the digital retail landscape based on direct-to-consumer transactions generated from over 1 trillion visits to U.S. retail websites.

Ethan Sullivan

Ethan's penchant for the pulse of the fashion world extends to covering lifestyle topics, offering readers a seamless blend of the latest style updates and lifestyle trends.

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