New data from the Adobe Digital Economy Index, powered by Adobe Analytics, revealed that UK consumers spent more online in June and July 2023 than in the same period last year – the first year-on-year spending increase since January 2022.
UK consumers spent a total of £18.6 billion across June and July representing 1.6% YoY growth when compared with the same period in 2022.
Looking at each month in detail:
- £8.85 billion was spent online in June 2023, up 13.8% on the previous month, and up 1% compared with June 2022, equivalent to an increase of £90.3 million.
- Total online spend for July reached £9.75 billion – the most spent in a single month in 2023 so far and an increase of 2.2% compared with July 2022. £1.2 billion was spent during the Amazon Prime Day period alone (11th and 12th July).
- Total online spend year-to-date has reached £59bn, compared with £60.6bn for the same period in 2022 (Jan – July).
“With year-on-year spending up for the first time in over a year, consumers look to be taking advantage of mid-year discounts and shopping events like Amazon Prime Day,” said Vivek Pandya, Lead Analyst at Adobe Digital Insights. “Online price inflation for essential items is showing signs of slowing and prices for non-essential items like technology, toys and apparel are lower than they were this time last year, encouraging spend across these categories.”
Online price inflation of essential items slows, as price of non-essentials fall again
Data from Adobe Analytics found that online price of goods across all categories in July decreased by 3.2% year-on-year, and by 2.1% when compared with June 2023. Cheaper online prices were primarily across non-essential items such as electronics, toys, apparel and sporting goods which also saw discounting over the Amazon Prime Day period.
Prices of essential items, including groceries and pet products, continued to increase on an annual basis, albeit at a slower pace than earlier in the year. July’s data showed year-on-year price growth for groceries slowing for the third consecutive month, with grocery prices 0.6% cheaper in July compared to June.
Adobe Analytics data on price changes across product categories in July 2023 found:
- Groceries: Online prices for groceries rose by 6.7% when compared with July 2022, falling from previous annual price increases of 8.1% in June, 9.7% in May, and 9.1% in April. Online inflation of grocery prices peaked in February when they were up 14.2% year-on-year compared with the previous month (June 2023), the online price of groceries fell by 0.6%.
- Pet Products: Online prices for pet products rose by 9.6% when compared with July 2022, again falling from previous annual price increases of 13% in June, 14.6% in May and 12.4% in April. Compared with the previous month, the online price of pet products fell by 1.5%.
- Electronics: Prices have fallen sharply in recent months and did so again in July, in part due to additional discounting over the Prime Day period which resulted in prices 2.1% cheaper when compared with June. Year-on-year prices were down 11% in July and down 10% in June.
- Toys: Prices were down 11.8% year-on-year in July, impacted by large discounts seen over the Prime Day period. Prices were also 2.3% cheaper when compared with the previous month.
- Sporting goods: Prices were down 10.3% year-on-year in July, again aided by Prime Day sales. Prices were also 2.9% cheaper when compared with the previous month.
Buy Now Pay Later usage continues to increase
UK consumers continued to make use of Buy Now Pay Later services to manage their outgoings, spending £2.85 billion in June and July. These services account for 15.35% of total monthly online spend, with £1.35 billion spent using Buy Now Pay Later in June (15.3% of total monthly spend), and a 2023 high of £1.5 billion in July (15.4% of total monthly spend). This takes total spending on these services to £8.8 billion year-to-date.
“Buy Now Pay Later usage has increased in the first half of this year, being used to finance more than £1 in every £7 spent online,” said Vivek Pandya, Lead Analyst at Adobe Digital Insights. “Consumers are becoming increasingly comfortable using buy now pay later services as a way to take advantage of deals without taking an immediate hit to their household budgets.”
TikTok traffic to retail sites increases at the expense of Facebook and Instagram referrals
Adobe Analytics identified a massive 378% rise in ecommerce traffic from TikTok content, between January 2022 and May 2023. While TikTok’s overall share of visits remains small (less than 5%), its share of traffic has risen a further 17% since May.
The share of traffic from Facebook and Instagram continued to fall in July, with referrals down 9% and 14% year-on-year, respectively. Since the start of 2023, referrals to retail sites from Facebook are down 16% and referrals from Instagram are down 7%. .
“While overall traffic from social media platforms to ecommerce sites has grown steadily in recent months as online retailers invest more in ads and influencer partnerships – the volume mix is starting to shift away from established players like Facebook and Instagram, and towards newer platforms like TikTok,” said Vivek Pandya, Lead Analyst at Adobe Digital Insights. “The increase in referrals from social platforms shows that whether they are reading the news, streaming content or browsing social media, consumers are almost always ready to shop. The right content at the right time can drive them to a retail site.”
Shoppers stocked up on summer essentials as temperatures rose in June
Adobe’s data showed spikes in sales of fans, parasols and air conditioners in June. Despite the downpours across the UK in July, shoppers remained optimistic with top selling products including sunglasses, cool boxes/bags, BBQs, swimsuits, beach towels, and portable speakers.
About the Adobe Digital Economy Index
The Adobe Digital Economy Index (DEI) used Adobe Analytics to analyse tens-of-billions of visits to retail sites from UK consumers, 100 million SKUs, and 18 product categories in the period June 1st to July 31st 2023, to provide the most comprehensive view of the UK digital economy. Adobe Analytics is part of Adobe Experience Cloud, relied upon by major retailers to deliver, measure, and personalise shopping experiences online.
Global figures are based on analysis of over a trillion visits to ecommerce sites and direct transaction data of consumers from over 80 countries – more than any other technology company or research firm.
