Online grocery shopping surges amid coronavirus, data reveals

Vice President of Marketing and Customer Insights at Adobe John Copeland joins Yahoo Finance’s Zack Guzman to discuss Adobe's data that shows U.S. consumers are turning to online grocery shopping amid the coronavirus pandemic.

Video transcript

ZACK GUZMAN: The state of the US consumer is in focus today, and we got the latest reading in regards to consumer sentiment out of the University of Michigan Consumer Sentiment Index-- that falling from 89.1 in March to 71 in the preliminary April report. That also disappointed forecasts, as bleak as they were, heading into the reading that we got today. Keep in mind that that drop month-over-month is the largest drop on record. It's also the lowest figure that we've got in terms of sentiment since late 2011.

It's raising a lot of questions about how the consumer is shopping in times of uncertainty. And of course, a big piece of that has been a surge in the way that they've been shopping online. And Adobe has been tracking that through its Adobe Digital Economy Index. That's the real-time barometer of the digital economy, analyzing trillions of online transactions across 100 million products, SKUs, in 18 product categories. For more on that, I want to bring on John Copeland. He's vice president of marketing and consumer insights at Adobe. John, thank you for taking the time here, man. When we look at the numbers specifically, though, what's jumping out to you in the shift in the way that Americans are shopping online and maybe some products that they might not have figured would be something you'd want to buy online?

JOHN COPELAND: Hi, Zack. Thanks for having me on. I really appreciate the opportunity to talk about what we're seeing consumers doing digitally. And as you might imagine, right, with stores dramatically shut down, with all the social distancing going on, consumers are really turning online to try and make up for a lot of what they might otherwise be buying offline. I mean, we've seen, even in the past two weeks of March, for example, a 38% increase in totality of online shopping in the US relative to the first half of the month.

So it's growing over time. It's actually a really important time for companies to have a strong digital foundation as consumers are looking to reach out through these channels. One of the things that we're seeing, as you might imagine, is a huge increase in what we call buy online, pickup in store. So people still want to be able to go to the nearby store to pick up the goods, but they want to basically purchase it online, know that the inventory's there, know that it's going to be available.

And you see a lot of retailers actually also offering things like curbside pickup and other kinds of customer experiences to reinforce, you know, the essence of safety, disinfecting, cleanliness, et cetera. So you see a lot of that going on right now.

ZACK GUZMAN: Yeah, I guess that would kind of support some of these stores that had put in the efforts ahead of time to make sure that they did have a buy online, pickup in-store option. And we've talked about that so much when you compare Target and Walmart and the efforts they've done there to maybe some of the other big box stores-- because we saw a surge for those warehouses, even store visits, not just buy online, pickup in-store, but just straight up visits to a Costco or a BJs Wholesale. So I mean, how does that kind of impact the way that some of these stores might be thinking about boosting offerings to consumers, maybe whether or not they should be focusing on key categories since groceries, cold medications, and computers continue to be some of those products that consumers are looking for right now?

JOHN COPELAND: Yeah. It's a great question. And I think not only big box retailers but even specialty retailers whose offerings are particularly relevant right now with people stuck at home-- so you know, you mentioned computers, and they were up 40% in the last two weeks in March. But we're also seeing things like even fitness equipment. People are buying more fitness equipment online to have at home-- you can't get into the gym, so you might as well have that equipment ready for you in the house.

So the last part of March, we saw a 55% increase in orders for fitness equipment online. Some of the categories that perhaps aren't performing as well, we're seeing sort of the average online apparel store decrease by 13% in sales over the past few weeks-- the last two weeks of March. But as you were saying, right, categories like virus protection up over 800%. You know, it's crazy-- if you can even find. So you know, a good option might be thinking about supply chain, right, for these retailers. How do they make sure these really hot products right now are in stock and readily available?

ZACK GUZMAN: Yeah. And the last point too that I just want to raise from you guys' report was looking at the digital purchasing power for a lot of consumers out there-- how much farther their dollar is going in relation to what we've seen in the past and how that kind of maybe is a key piece of why, obviously, there are reasons why they would be shopping online, but why it could make even more sense now.

JOHN COPELAND: Yeah, absolutely. I'm glad you asked the question. You know, we created the Digital Economy Index almost as a counterpart to the Consumer Price Index, which looks at things more kind of holistically across online and offline. But the Digital Economy Index that we have at Adobe is the only thing that's actually looking at actual purchases, right, because we have visibility into those trillions of visits over the hundreds of millions of products and the thousands of retailers across the US.

And we're increasingly adding more countries to this so we can give consumers, companies, and policy makers real time information on what's moving. And specifically to your question-- year-over-year, there's been a 3% increase in consumer purchasing power online. But if you go as far back as we have data-- which is basically six years ago-- there's been a 20% increase in consumer purchasing power online across the last six years at a total category level. Some categories a lot more-- so electronics and apparel, the purchasing power has actually increased even more. Other categories, like grocery, right, there's fewer product innovations, it's a thin margin business-- there hasn't been necessarily that same level of increase. But on a weighted basis, 20% over the last six years, 3% over the last year.

ZACK GUZMAN: Yeah-- even more reasons to be shopping online. You can get some good deals out there. But John Copeland, vice president of marketing and consumer insights at Adobe, thank you so much for bringing us that.

JOHN COPELAND: Yeah, my pleasure. Thank you.