Adobe has released its UK online retail insights report for the 2022 calendar year. The research is based on Adobe Analytics data. The data analyses sales transactions online to provide the most comprehensive view into UK eCommerce. Adobe Analytics is part of Adobe Experience Cloud, relied upon by retailers to deliver, measure, and personalise shopping experiences online.
The total amount spent online by consumers decreased by 8.6% compared to 2021, falling to £110.6 billion last year. The decline in annual spending was primarily driven by heavy discounting from retailers. In addition to consumers seeking out deals in response to the cost-of-living crisis. However, basket sizes grew. The average number of items in each online order increased from 3.3 in 2021 to 3.4 in 2022. This points to a growing consumer preference for shopping online, particularly during a year when physical retail rebounded strongly after extended COVID restrictions. Online spending increased by 42.3% compared with 2019, the last year with no restrictions on retailers.
The digital economy remains strong
While online spending was lower across 2022 compared with 2021, December figures showed more positive signs of spending acceleration. The data indicates a lower year-over-year (YoY) decrease of just 7.4% compared with October and November. A period when inflation and rising energy costs influenced a pronounced 11.3% drop relative to the same period in 2021. During the Christmas shopping period (November 1st – December 31st), consumers spent a total of £22.4 billion online, a 10.1% YoY drop. Compared with December 2019’s pre-COVID figures, December 2022 online spending grew by 17%.
According to Suzanne Steele, Vice President and Managing Director for Adobe in the UK, “UK consumers spent less in 2022. Our data shows they bought more items, as they took advantage of discounts offered by retailers and hunted down bargains.
“The digital economy remains strong. But to weather the cost-of-living crisis in 2023, businesses must be mindful of how they price and promote products and services to increasingly cost-conscious consumers.”
Additional Adobe analytics insights
Other key trends highlighted in the report are:
- Mobile was the most dominant online shopping channel in 2022. More than half (56.8%) of purchases take place on smartphones – a 10.9% YoY increase in share.
- Overall, consumers spent £62.8 billion from the palms of their hands during the year. £13.2 billion of which was spent in November and December.
Adobe provides a comprehensive view into UK eCommerce by analysing direct consumer transactions online. The analysis covers tens of billions of visits to UK retail sites, 100 million SKUs and 18 product categories. Adobe says this is more than any other technology company or research organisation. Adobe Analytics is part of Adobe Experience Cloud, which retailers rely upon to deliver, measure, and personalise shopping experiences online. The 2022 data covers the period from January 1st 2022 to December 31st 2022.
Enterprise Times: What this means for business
The main headline from Adobe’s retail insight report is that eCommerce remains a growth channel in the UK. Shoppers actually bought more items but spent less–the result of heavy retailer discounting. The data suggests the UK digital economy greatly expanded during the pandemic. The 2022 online spending rose by a significant 42.3% compared to pre-COVID 2019 figures. However, rising energy and food costs have created a more price-conscious UK consumer, who spent £110.6 Billion online in 2022. This was 8.6% less than the year prior. Going into 2023 will be interesting. Economists continue to forecast economic slow-down and recessions in many of the world’s major economies. Relatively high levels of inflation and post covid issues in the supply chain are expected to continue to impact consumer spending. In the UK, strikes by Royal Mail postal workers will inevitably impact eCommerce spending, particularly for small-medium sized brands and retailers. As a result, enterprises should review their price models and product promotions to increasingly price-conscious online consumers.