Dive Brief:
- Amid a period of record inflation, Adobe’s Digital Price Index found that online prices dipped down 1% year over year in July and 2% on a month-to-month basis, the first time in 25 consecutive months in which prices have declined instead of grown.
- Electronics prices saw one of the greatest decreases at 9.3% year-over-year, as did toys (8.2%). Book prices dropped 3.5%, followed by jewelry (3.1%) and apparel (1%). Grocery prices, however, rose 13.4% year-over-year, followed by increases in pet products (12.6%), tools and home improvement (10.8%) and medical supplies (6.9%), according to the report.
- Shoppers spent $73.7 billion online in July, a drop from the $74.1 billion they spent in June. Spending was also lower compared to May ($78.8 billion) and April ($77.8 billion). However, compared to July 2021, e-commerce spending increased 20.9%, the report found.
Dive Insight:
At least online, there may be some relief in sight for high inflation that has rattled both consumers and retailers in recent months.
“Wavering consumer confidence and a pullback in spending, coupled with oversupply for some retailers, is driving prices down in major online categories like electronics and apparel,” Patrick Brown, vice president of growth marketing and insights at Adobe, said in a statement. “It provides a bit of relief for consumers, as the cost of food continues to rise both online and in stores.”
Adobe noted in its report that grocery prices have increased for 30 consecutive months, and set a new year-over-year price hike record in July. A recent report by Brick Meets Click and Mercatus found that online grocery sales in the U.S. rose by 17% last month compared to July 2021, an increase the report attributed to inflation and COVID-19 concerns. In June, food-at-home prices saw a 12.2% jump over the prior year, and they increased 1% from May, according to the Consumer Price Index.
While prices dropped in July, year-over-year e-commerce spending was still up. Adobe attributed the year-over-year growth in online shopping to Amazon Prime Day sales, which boosted sales for the retail industry overall. Its Digital Price Index found that consumers have spent $525.4 billion online this year so far, a 9.2% increase compared to last year.
In March 2021, Adobe predicted that e-commerce spending would reach $1 trillion this year. More recent projections from FTI Consulting and Forrester also indicate that e-commerce sales will exceed $1 trillion in 2022.
