Online prices have increased for the 24e consecutive month in May, but shows a promising trend.
Online prices increased by 2% year-on-year (YoY) in May, compared to 2.9% YoY in April and the record 3.6% year-over-year increase in March – while declining 0.7% month-over-month (MoM), aaccording to the latest Adobe Digital Price Index (DPI).
Although these results mark two full years of online inflation year on year, May is the second month that online price increases have slowed. The majority of categories tracked by the DPI (10 out of 18) saw MoM price declines in May.
In May, consumers spent $78.8 billion online, representing year-over-year growth of 7.1% and more than $1 billion in additional spending from the previous month, when consumers spent $77.8 billion online (4.5% year-on-year growth), and under $83.1 billion (7% year-on-year growth). ) which was spent in March. In 2022 so far, consumers spent a total of $377.6 billion online, growing 8.9% year-on-year.
Price trends vary
Price performance during the month varied by product category. In electronics and apparel, broad categories that accounted for 33% of e-commerce spending in 2021, prices continued to fall. Electronics prices fell 6.5% year-on-year and 1.4% month-on-month, a larger year-on-year decline than in April (5.2% year-on-year decline) and a one-year record for the category in the last 24 months.
Meanwhile, clothing prices rose 9% year-on-year but fell 1.5% month-on-month, down from April’s 12.3% year-on-year increase. Toys are down 6.5% year-on-year and 1.3% month-on-month, a record low for the category over the past 24 months. Prices did not fall for groceries, which climbed 11.7% year-over-year and 1.3% month-on-month, a year-over-year record for the category.
This is the first month that Adobe has tracked grocery prices as rising the most of any category, overtaking clothing. Grocery remains the only category to move in line with the CPI over the long term, with online prices now rising for 28 consecutive months.
Overall, during the month of May, 12 of the 18 categories tracked by the DPI saw year-over-year price increases, with groceries rising the most. Price declines were seen in six categories: electronics, jewelry, books, toys, computers and sporting goods.
Eight of the 18 categories of the DPI saw their prices increase MoM. Price declines were seen in 10 categories, including electronics, personal care products, jewelry, books, toys, home/garden, appliances, computers, sporting goods and clothes.
[Read more: Precision pricing: How retailers should act on inflation data]
“Despite the modest increase in online consumer spending, an uncertain economic climate and rising costs in key areas like groceries are hampering overall demand,” said Patrick Brown, vice president of growth and insight marketing. at Adobe. “The slowdown in consumer spending on discretionary items has slowed single-digit e-commerce growth since March, and the pullback reflects slowing online inflation.”
DPI provides the most comprehensive view of the price consumers pay for goods online, as e-commerce expands into new categories and brands focus on personalization in the digital economy. 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.
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.