Adobe: Cyber Week discounts drive down online prices

Holiday deals at the end of the month helped reduce online inflation for U.S. consumers in November.

Online prices decreased 1.9 year-over-year (YoY) and 3.2% month-over-month (MoM) in November 2022, according to the latest Adobe Digital Price Index (DPI) figures, based on Adobe Analytics. This marks the third consecutive month when online prices have decreased on a YoY basis, and the largest YoY drop reported by Adobe in the past 31 months, since May 2020.

Additionally, 15 of the 18 categories tracked in the DPI (15 of 18) saw price decreases on a MoM basis. According to Adobe analysis, heavy discounting during Cyber Week, the five-day period between Thanksgiving (Nov. 24) and Cyber Monday (Nov.28) drove the overall decline in online prices for the month.

[Read more: Three surprises from Cyber Week 2022]

Adobe data indicates that online prices fell sharply for computers in November, dropping 18% YoY and 5.1% MoM; and electronics, which fell 13.4% YoY and 4.5% MoM. Both categories saw the largest YoY drops on record, since Adobe began tracking online prices in 2014.

Holiday deals also drove down prices for toys (down 7.7% YoY and 4.2% MoM) and sporting goods (down 5.7% YoY and 4.3% MoM), according to Adobe.

Holiday discounting helped generated $116.5 billion for e-commerce in November, growing 1.7% YoY and a significant 62.5% MoM. DPI figures are not adjusted for inflation, but with November prices down 1.9%, Adobe says that strong consumer spending has been driven by net-new demand, rather than simply resulting from higher prices.

Product categories that were not heavily discounted during Cyber Week saw price increases slow in November. In groceries, prices were up 13.7% YoY, while modestly increasing 0.3% MoM. This is the second consecutive month where YoY online price increases for groceries have come down from record highs. October prices were up 14% YoY, down from September (up 14.3% YoY) and August (up 14.1% YoY).

In pet products, after online prices hit a record high in August (up 12.7% YoY), inflation also slowed. Prices were up 11% YoY in November (down 0.2% MoM). Personal care, another non-promotional category, saw prices rise 1.8% YoY in November (down 3.4% MoM), a smaller increase than October when prices rose 3% YoY.

Notable categories in the Adobe Digital Price Index for November:

• Electronics: Prices were down 13.4% YoY (down 4.5% MoM), the largest YoY drop recorded by Adobe since 2014. As electronics is the top e-commerce category by share of spend (18.6% share in 2021), Adobe says its price movements have a significant impact on overall inflation online.  
• Computers: Prices were down 18% YoY (down 5.1% MoM), also the largest YoY drop observed by Adobe since 2014. Computer prices online have fallen for 23 consecutive months, after rising 2.9% YoY in December 2020 when the stay-at-home COVID-19 pandemic trend drove up demand. 
• Groceries: Prices rose 13.7% YoY (up 0.3% MoM) but have begun to slow in the past two months. From January (prices up 5.8% YoY) through September (prices up 14.3% YoY), every month in 2022 had marked a record YoY high for grocery prices. In October 2022, however, prices rose 14% YoY, less than the month prior. 
• Pet Products: Prices rose 11% YoY (down 0.2% MoM), a declining rate of growth after YoY increases hit a record YoY growth high of 12.7% in August 2022. Price increases in November have also slowed compared to the two months prior, including October (up 11.9% YoY) and September (up 11.8% YoY). 

“While the November drop in online prices was driven by major discounting on days including Cyber Monday and Black Friday, we also see signs of overall e-commerce inflation cooling,” said Patrick Brown, VP of growth marketing and insights, Adobe. “In categories such as groceries and personal care, which are not promotional in nature, we are seeing price increases come down from their heights in late summer and early fall.”

The Adobe 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.