Online Spending Continues at Record Pace, and Includes Price Inflation
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Online sales continue to set new records in June, but price points are ticking up across categories — including apparel.
According to Adobe Analytics’ Digital Economy Index (Adobe DEI), which includes data from more than 1 trillion online visits and across over 100 million product stockkeeping units, “consumers continued to move more of their shopping online with June generating a record $73.2 billion in total spend.”
This represents a 76.2 percent year-over-year increase. But the gains are coming with price point inflation in apparel, grocery and electronics. Adobe said in the report that prices have “started to go up” as “fast, easy-to-use online shopping experiences are more important than ever for retailers to drive online sales.”
The Adobe DEI revealed a “turnabout” in June for apparel prices. “After months of significant price decreases, online apparel prices were up 2.7 percent [month-to-month] and 4.3 percent [year-over-year] in June.”
“The first six months of 2020 drove more than twice the deflation online apparel typically experiences during the first half of the year as retailers offered heavy discounts to move inventory and increase demand,” Adobe said. “Retailers are slowly raising prices to improve their margins, on their latest offerings, and to better capitalize on the online apparel landscape that has become a much more significant marketplace for transacting.”
Vivek Pandya, digital insights manager at Adobe, said as online apparel prices “start to increase and inflation continues to occur across categories, digital purchasing power turned negative for the first time.”
“Although just a slight dip of [negative] 1 percent, consumers are essentially now paying more for the online shopping basket they purchased a year ago,” Pandya said. “With physical stores reopening and slightly higher prices online, retailers will need to offer exceptional online customer experiences to attract and retain customers.”
Other categories seeing price inflation include grocery and computers. “As more consumers turn to e-commerce, online grocery prices have increased 4.2 percent over the past six months, representing a five-times higher increase compared to 2019 and average inflation levels, for the same period,” Adobe said in the report. “In June, grocery prices crept up slightly from May levels.”
With computers, consumers who are continuing to work from home as well as students attending online classes in June, “prices have increased by 6.2 percent since March,” authors of the report said, adding that prior to March, “computer prices had been continually declining over the past six years.”
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