Price Sensitivity Shaping Online Spending Patterns Amid Inflation and Economic Uncertainty

In a recent interview, Vivek Pandiya, the lead analyst at Adobe Digital Insights, discussed the evolution of consumer spending patterns in the face of inflation and economic uncertainty. While online spending continues to grow, consumers are becoming increasingly price-sensitive and are trading down rather than splurging on luxury items. Electronic goods remain the largest category for online spending, followed by apparel, but grocery expenses now account for over 10% of online transactions. This trend has intensified due to the COVID-19 pandemic and economic uncertainty, leading to heightened competition among retailers as they strive to offer the best deals possible. As a result, Prime Day, originally launched by Amazon in 2015, has transformed into a massive sale season that takes place in July. Retailers are now offering a wide array of products, ranging from electronics and clothing to books and appliances, in order to move out old inventory and prepare for the upcoming holiday shopping season. Consumers have become increasingly reliant on mobile devices for online purchases, with Adobe predicting that 52.5% of 2024 holiday shopping will take place via smartphone or tablet. Overall, the trend of price sensitivity is affecting consumers across all demographics, regardless of income levels.