Adobe Digital Price Index: Online Inflation Continues to Slow in May at 2.0%
09 June 2022 - 10:00PM
Business Wire
- Prices dropped 0.7% month-over-month; majority of product
categories saw price decreases
- Consumers spent $78.8 billion online in May, over $1 billion
more than the prior month
- Food costs remain high, with groceries overtaking apparel as
top category for rising prices
Adobe (Nasdaq:ADBE) today announced the latest online inflation
data from the Adobe Digital Price Index (DPI), powered by Adobe
Analytics. In May 2022, online prices increased 2% year-over-year
(YoY)—down from 2.9% YoY in April and the record 3.6% YoY increase
in March—while decreasing 0.7% month-over-month (MoM). While this
marks two full years of inflation online YoY, May is the second
month where online price increases have slowed. The majority of
categories tracked by the DPI (10 out of 18) saw MoM price
decreases in May.
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Prices for electronics and apparel, major categories that made
up 33% of e-commerce spend in 2021, have continued to draw down.
Electronics prices were down 6.5% YoY (down 1.4% MoM), a greater
decrease than April (down 5.2% YoY), and a record YoY low for the
category over the last 24 months. Prices for apparel increased 9%
YoY (down 1.5% MoM), down from the 12.3% YoY increase in April.
Toys are down 6.5% YoY (down 1.3% MoM), a record low for the
category over the last 24 months. Prices have not eased for
groceries, rising 11.7% YoY (up 1.3% MoM), a record YoY high for
the category. This is the first month where prices for groceries
have risen the most of any category, overtaking apparel.
In May, consumers spent $78.8 billion online, which represents
7.1% YoY growth. It is over $1 billion more than the month prior,
when consumers spent $77.8 billion online (4.5% YoY growth), and
below the $83.1 billion (7% YoY growth) that was spent in March. In
2022 so far, consumers have spent a total of $377.6 billion online,
growing 8.9% YoY.
“Despite the modest increase in consumer spending online, an
uncertain economic climate and rising costs in core areas like
groceries are putting a hamper on overall demand,” said Patrick
Brown, vice president of growth marketing and insights, Adobe.
“Slower consumer spending on discretionary items has driven slower,
single digit e-commerce growth since March, and this pullback
mirrors the easing in online inflation.”
“E-commerce data has become an important input for measuring
inflation as daily activities, including shopping, become more and
more digital,” said economist Marshall Reinsdorf, former senior
economist at International Monetary Fund. “In an uncertain economic
environment, Adobe’s Digital Price Index is a timely indicator that
often mirrors inflation movements happening offline while
highlighting the tendency for inflation to be lower in the digital
economy.”
The DPI provides the most comprehensive view into how much
consumers pay for goods online, as e-commerce expands to new
categories and as brands focus on making the digital economy
personal. Powered by Adobe Analytics, it analyzes one trillion
visits to retail sites 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 drug and office supplies.
In May, 12 of the 18 categories tracked by the DPI saw YoY price
increases, with groceries rising the most. Price drops were
observed in six categories: electronics, jewelry, books, toys,
computers and sporting goods.
Eight of the 18 categories in the DPI saw price increases MoM.
Price drops were observed across 10 categories including
electronics, personal care products, jewelry, books, toys,
home/garden, appliances, computers, sporting goods and apparel.
Notable categories in the Adobe Digital Price Index for
May:
- Electronics: Prices were down 6.5% YoY (down 1.4% MoM).
This is the largest YoY drop for the category since May 2020, when
prices were down 6.8% YoY. As the biggest category in e-commerce by
share of spend, price movements have an outsized impact on overall
inflation online.
- Apparel: Prices were up 9% YoY (down 1.5% MoM). While
the category has now seen 14 months of online inflation, reversing
a predictable pattern of heavy discounting periods, there are
continued signs that prices are beginning to ease; prices increased
12.3% YoY in April, 16.3% YoY in March and 16.7% YoY in
February.
- Toys: Prices were down 6.5% YoY (down 1.3% MoM), the
largest YoY drop for the category since December 2019 before the
COVID-19 pandemic, when prices were down 10% YoY during the holiday
shopping season. This is also the 14th consecutive month of
deflation for the category as prices rose 0.2% YoY in March
2021.
- Groceries: Prices continued to surge and rose 11.7% YoY
(up 1.3% MoM), setting another new record on an annual basis. This
follows a 10.3% YoY increase in April, a 9% YoY increase in March
and a 7.6% YoY increase in February—all record highs. This makes
the first month where groceries have risen more than apparel, which
had consistently been the top category for over a year. Groceries
remains the only category to move in lockstep with the CPI on a
long-term basis, with online prices rising now for 28 consecutive
months.
Methodology
The DPI is modeled after the Consumer Price Index (CPI),
published by the U.S. Bureau of Labor Statistics and uses the
Fisher Price Index to track online prices. The Fisher Price Index
uses quantities of matched products purchased in the current period
(month) and a previous period (previous month) to calculate the
price changes by category. Adobe’s analysis is weighted by the real
quantities of the products purchased in the two adjacent
months.
Powered by Adobe Analytics, Adobe uses a combination of Adobe
Sensei, Adobe’s AI and machine learning framework, and manual
effort to segment the products into the categories defined by the
CPI manual. The methodology was first developed alongside renowned
economists Austan Goolsbee and Pete Klenow.
About Adobe
Adobe is changing the world through digital experiences. For
more information, visit www.adobe.com.
© 2022 Adobe. All rights reserved. Adobe and the Adobe logo are
either registered trademarks or trademarks of Adobe in the United
States and/or other countries. All other trademarks are the
property of their respective owners.
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version on businesswire.com: https://www.businesswire.com/news/home/20220609005263/en/
Kevin Fu Adobe kfu@adobe.com
Bassil Elkadi Adobe belkadi@adobe.com
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