Adobe Digital Economy Index | Adobe Analytics | Q1 2021

Key insights from the Digital Economy Index

The Digital Economy Index measures inflation in what people are buying in the digital world in the US, UK, and Japan.

As part of that measurement, we’ve seen that the purchasing power of the US online dollar has increased by nearly 23% over the past seven years in the US, and 5% within a year in the UK.

US online purchase power since 2014, UK since 2020 (Data updated monthly):

Despite large base, US ecommerce sees impressive growth in March: +49% YoY, at $78B

• US consumers spent $78 billion in March, showing a strong YoY growth of 49%, the highest growth since July last year.
• While the YoY e-commerce growth started to trend down as stores reopened and consumers became more comfortable visiting them, March saw a significant rebound.
• This growth presented itself despite the large base in 2020, marked by the sharp increase in e-commerce activity at the start of the pandemic.

What the Digital Economy Index Measures

• The DEI calculates digital purchasing power (DPP) by country.
• DPP measures how much more people can buy with a dollar, euro, real, pound, yen, etc. online now versus a year ago.
• For example, if DEI for the US is up by 2 %, then $1.00 spent online now will buy you what $1.02 would have bought you a year ago.
• The DEI is always weighted by what people actually spendonline.
• As computers become less expensive, total online purchasing power will go up quickly because a good portion of what people buy online is computers.
• But a rise in the price of pet products wouldn’t affect purchasing power much, because people spend relatively little on pet products online.
• Economies with fast-growing DEIs are making more and better goods available to their online consumers more cheaply.
• Because Adobe’s DEI looks at what people actually buy, it allows reasonable comparisons between global economies.