Adobe Report: Online Inflation Slowing; Consumer Spending Retreats
Signs of inflation slowing are surfacing, but that’s little relief to U.S. shoppers reeling from the nation’s persistent price hiking and rising interest rates.
In its latest report on what’s happening with prices on the internet, Adobe reported Wednesday that in April, online prices increased 2.9 percent year-over-year, down from the record 3.6 percent year-over-year increase in March.
More from WWD
“While this marks the 23rd consecutive month of year-over-year online inflation, April shows early signs of online price increases beginning to slow,” Adobe reported.
The software giant also reported that 10 of the 18 categories — apparel, electronics, office supplies, jewelry, books, furniture/bedding, toys, home/garden, flowers/related gifts, and computers — tracked saw month-over-month price decreases in April.
“As the cost of borrowing and economic uncertainty rises for consumers, we are beginning to see the early impact on both online inflation and spend,” Patrick Brown, vice president of growth marketing and insights at Adobe, said in a statement. “However, durable demand for e-commerce still drove over $77 billion dollars in spend last month, as consumers continue to embrace the ease of online shopping and more personalized customer experiences in the digital economy.”
In April, consumers spent $77.8 billion online, which represents “modest growth at 4.5 percent year-over-year,” Adobe reported. Online spending in the U.S. grew double digits at 12.2 percent year-over-year to $71 billion in January, and 15.5 percent year-over-year to $67 billion in February.
Consumer spending in April is also below the $83.08 billion spent in March, representing a 6.8 percent decline month-over-month or $5.28 billion less.
According to the Adobe Digital Price Index, apparel prices increased 12.3 percent year-over-year, while decreasing 1.7 percent month-over-month. Although, according to Adobe, this is the highest year-over-year increase of any merchandise category, it is down from recent highs in February when apparel prices rose 16.7 percent year-over-year, and March when apparel prices rose 16.3 percent year-over-year.
On groceries, prices have not eased, Adobe reported. They rose 10.3 percent year-over-year and 1.3 percent month-over-month. Pet products rose 8 percent year-over-year and 0.9 percent, month-over-month. Adobe said these were record year-over-year highs for both categories.
Prices for electronics were down 5.2 percent year-over-year and down 0.9 percent month-over-month. Adobe said that was a record year-over-year low for the category over the last 12 months.
In April, 13 of the 18 categories tracked saw year-over-year price increases, with apparel rising the most. Price drops were also seen in electronics, jewelry, books, toys and computers.
The DPI saw price drops across 10 categories, including electronics, office supplies, jewelry, books, furniture/bedding, toys, home/garden, flowers/related gifts, computers and apparel.
The Adobe Digital Price Index, powered by Adobe Analytics, analyzes one trillion visits to retail sites and more than 100 million skus across 18 product categories, including 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.
The DPI is modeled after the Consumer Price Index, 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 month and a 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.
Sign up for WWD's Newsletter. For the latest news, follow us on Twitter, Facebook, and Instagram.
