Adobe: TikTok traffic to retailers soars amid early signs of recovery for online spending

UK consumers spent a total of £7.8 billion online in May 2023, down 2.5% from the previous month, and down 1.3% YoY, according to the latest Adobe Digital Economy Index.

Considering the impact of the additional Coronation bank holiday, which saw spending drop by 20.4% compared with the same weekend in 2022, May's improving figures show early signs of consumer confidence and online spending power returning.

UK consumers racked up another £1.3 billion pounds of buy now pay later debt last month(equivalent to 16.5% of total online spending for the month), taking total spending on these services to £6.2 billion for the first five months of 2023. 

Adobe’s analysis also revealed a 6.5% increase in average order values using BNPL compared with April, and an acceleration in the amount spent using BNPL from 18th May onwards, indicating consumers are more reliant on these services in the run up to payday.

For the first time, the Adobe Digital Economy Index has taken an in-depth look at how social media platforms drive traffic to e-commerce websites, and in particular, how newer platforms like TikTok continue to eat away at the share of social media traffic of established players, like Facebook and Instagram.

In May 2023, Adobe’s analysis identified a significant rise in e-commerce traffic from TikTok content, growing 378% since January of 2022. While TikTok’s overall visits share is relatively small (less than 5%), it is growing at an impressive rate with 164% year-over-year growth in May.

In contrast, Instagram’s share of traffic was down 2% year-over-year and Facebook was down 18%, suggesting a growing capacity for TikTok to influence e-commerce sales.

“While the prices of essential items like groceries continue to increase in price both online and offline, the year-over-year decrease of just 1.3% in online spend for May shows that spending power and consumer confidence is starting to return,” says Suzanne Steele, Vice President and Managing Director for Adobe in the UK.

The online price of essential items continued to grow in May, with groceries costing 1.2% more than the previous month (9.7% more than last year). The prices of pet products also grew by 0.7% compared with the previous month.

In contrast, non-essential items such as electronics and apparel saw another month of falling prices as retailers seek to stimulate demand.

With temperatures continuing to rise, products such as camping equipment, patio furniture and covers, fire pits, swimsuits, sunscreen, beach towels, and picnic baskets all proved popular in May, with data showing that spending on these items accelerated in the lead up to the bank holidays.

The trend towards mobile shopping is continuing, with May seeing even more spending coming from the palm of consumers’ hands – with 59% of purchases taking place on smartphones, representing a 13.9% YoY increase in share. Overall, consumers spent £4.6 billion with their mobile devices in May this year.  

Click and Collect, meanwhile, remains stable. This fulfilment method was used in 9.0% of online orders in May (for retailers who offered the service), down slightly from 9.1% the previous month, and from 8.4% in the year prior.