Online Inflation in November Grew a Record 3.5%. It Still Hasn’t Slowed Spending
‘Tis the season for record high prices on consumer goods.
Online prices in November rose a record 3.5% compared to 2020, according to Adobe data released today. This growth marks the highest price jump recorded by Adobe since 2014, when it started recording digital sales. Prices are down 2% compared to last month as retailers roll out holiday discounts.
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November continued recent inflation trends and marked the 18th consecutive month of price increases online. Apparel was the fastest growing category in terms of price increases, up 17.3% compared to the same period in 2020 but down 0.4% month over month. Online apparel prices have risen by over 9% year over year every month for the last eight months.
The results come as retail prices continue to hit historically high levels. Consumer prices rose by 6.2% in October compared to a year ago, according to the Bureau of Labor Statistics’ monthly report. (The report for November is set to be published on Friday.) October’s numbers represented the highest inflation rate since the 12-month period ending in November 1990.
“Ongoing supply chain constraints and durable consumer demand have underpinned the record high inflation in e-commerce, with apparel seeing high volumes of out-of-stock messages online compared to other categories” said Patrick Brown, VP of growth marketing and insights at Adobe. “With offline prices surging in the Consumer Price Index (CPI) however, it is still cheaper to shop online for categories such as toys, computers, and sporting goods.”
According to the Adobe data, $1 out of every $4 in the 2021 holiday shopping season will be spent online in the U.S. And while online sales on Thanksgiving were essentially flat from 2020 at $5.1 billion, there is still time for sales to pick up through Christmas.
Thanksgiving, Black Friday, and Cyber Monday are in the past, but Super Saturday, the last Saturday before Christmas and often considered the second-busiest shopping day of the year, is right around the corner. For this reason, December is often considered a crucial time for retailers to meet sales targets for the year.
Despite widespread inflation, the National Retail Federation’s (NRF) is expecting sales in November and December to grow as much as 11.5% year over year. This number is higher than NRF’s initial forecast of between 8.5% and 10.5% growth and, if met, would break shopping records.
Abode data also showed that while consumers saw over 3 billion out-of-stock messages online in November, demand did not slow, with $114 billion spent between Nov. 1 and Nov. 30, marking a 13.6% growth year-over-year.
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