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.
New data from the Adobe Digital Economy Index has revealed that UK consumers spent a total of £18.6 billion across June and July, representing 1.6% year-on-year growth as summer spending surged.
£8.85 billion was spent online in June, up 13.8% on the previous month, and up 1% compared with June 2022. In July, the total online spend 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. The Amazon Prime Day period, July 11th to 12th, accounted for £1.2 billion in spending alone.
“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.
He added: “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.”
Cheaper online prices
Data from Adobe Analytics found that online prices of goods across all categories in July decreased by 3.2% year-on-year. 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, the report said.
According to the Adobe research, Buy Now Pay Later usage continues to increase. These services account for 15.35% of total monthly online spend, with £1.35 billion spent using Buy Now Pay Later in June and a 2023 high of £1.5 billion in July.
“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. 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,” Pandya said.
How is social media traffic to retail sites is changing?
Meanwhile, TikTok traffic to retail sites has increased at the expense of Facebook and Instagram referrals. Adobe Analytics identified a massive 378% rise in e-commerce traffic from TikTok content, between January 2022 and May 2023. While TikTok’s overall share of visits remains small, its share of traffic has risen a further 17% since May.
In addition, 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%.
Pandya concluded: “While overall traffic from social media platforms to e-commerce 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.
“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.”
