April 2022 marked the 23rd consecutive month online prices have increased year over year – but there is a little silver lining.
According to the latest Adobe Digital Price Index (DPI), online prices have increased by 2.9% year-on-year (YoY), down from a record 3.6% year-on-year increase in March, down 0.5% month-on-month (MoM ). Although this marks the 23rd consecutive month of year-on-year growth in online inflation, Adobe DPI analysis indicates that April is showing the first signs of a slowdown in online price growth.
More than half of the categories tracked by the DPI (10 out of 18) saw MoM price declines in April. Electronics prices were down 5.2% year-over-year (down 0.9% month-on-month), a year-over-year high for the category recorded by Adobe over the past 12 months.
Clothing prices rose 12.3% year-on-year, while falling 1.7% month-on-month. While this is the largest year-over-year increase of any category tracked by Adobe DPI, it is down from recent highs (February 2022 at 16.7% YoY and March 2022 at 16.7% YoY and March 2022 at 16.7% YoY). 3% YoY).
Online grocery prices were up 10.3% YoY (up 1.3% MoM); as well as pet products, which increased by 8% over one year (+0.9% over one month). These were annual records for both categories.
Computer prices fell by 5.7% over one year (-0.7% over one month). It’s the 16thand consecutive month of deflation for the category, following a 2.9% year-on-year rise in December 2020. The price decline, however, remains below historical levels, with computer prices falling 9.2% year-on-year on average from 2015 to 2019.
In April 2022, data from Adobe shows that consumers spent $77.8 billion online, representing modest year-over-year growth of 4.5%. U.S. online spending grew at much higher double-digit rates of 12.2% yoy ($71 billion) in January 2022 and 15.5% ($67 billion) in February .
Consumer spending in April was also lower than the $83.08 billion spent in March, down 6.8% month on month, or $5.28 billion. With rising interest rates and persistent inflation, consumers have reduced their spending on durable goods.
A total of 13 of the 18 categories tracked by the DPI saw year-on-year price increases, with clothing rising the most. Price declines were observed in five categories: electronics, jewelry, books, toys and computers.
Eight of the 18 categories of the DPI saw their prices increase MoM. Price drops were seen in 10 categories, including electronics, office supplies, jewelry, books, furniture/bedding, toys, home/garden, flowers/related gifts, computers and the clothes.
“As the cost of borrowing and economic uncertainty rise for consumers, we are starting to see the early impact on inflation and online spending,” said Patrick Brown, vice president of growth marketing and information at Adobe. “However, sustainable e-commerce demand still drove more than $77 billion in spending last month, as consumers continue to embrace the ease of online shopping and more personalized customer experiences in the digital economy. “
Adobe DPI provides a comprehensive view of the price consumers pay for goods online. Powered by Adobe Analytics, it analyzes one trillion retail site visits and over 100 million SKUs across 18 product categories: electronics, apparel, appliances, books, toys, computers, groceries, furniture /bedding, tools/home improvement, home/garden, pet products, jewelry, medical equipment/supplies, sporting goods, personal care products, flowers/related gifts, non-prescription drugs and office supplies.
The DPI is modeled after the Consumer Price Index (CPI), published by the US Bureau of Labor Statistics, and uses the Fisher Price Index to track prices online. The Fisher Price Index uses the quantities of matched products purchased during the current period (month) and a previous period (previous month) to calculate price changes by category. Adobe’s analysis is weighted by the actual quantities of products purchased in the adjacent two months.