Adobe: Online electronics prices see historic decline in October
For the second straight month, U.S. consumers paid a little less for their online purchases, and a lot less in a few key categories.
Online prices decreased 0.7% year-over-year (YoY) and rose 0.3% month-over-month (MoM) in October 2022, according to the latest Adobe Digital Price Index (DPI). E-commerce inflation has been sporadic the past few months, increasing 0.4% YoY in August 2022 but falling 0.2% in September. Online prices also dropped 1% YoY in July 2022, following 25 previous straight months of online inflation.
According to Adobe data, the October decline in online prices was driven by categories including electronics, computers, toys and sporting goods. In the largest category in e-commerce by share of spend, electronics, online prices fell sharply as many retailers launched early holiday discounts, resulting in a 12.9% YoY decline (down 2.4% MoM). This is the largest recorded YoY decline for the electronics category since Adobe began tracking online prices in 2014.
Pre-holiday deals also drove down prices for toys, which fell 7.1% YoY (down 3.5% MoM). Food costs remained stubbornly high, however, as online grocery prices rose 14% YoY (up 0.7% MoM). This jump follows September’s record high – up 14.3% YoY – but is the first month of 2022 where the food category’s inflationary price increases have slowed.
During October, 10 of the Adobe DPI’s 18 tracked categories saw YoY price increases, led by groceries, and seven of the 18 categories saw MoM price increases. Year-over-year price drops were observed in eight categories including electronics, jewelry, books, toys, appliances, flowers/related gifts, computers and sporting goods, with monthly price drops across 11 categories – electronics, office supplies, jewelry, books, furniture/bedding, toys, home/garden, non-prescription drugs, appliances, flowers/related gifts and computers.
Notable categories in the Adobe Digital Price Index for October:
Electronics: Prices were down 12.9% YoY (down 2.4% MoM), a record YoY low for the category. October marks the fourth consecutive month where electronics prices have fallen faster than pre-pandemic levels, which averaged 9.1% YoY drop between 2015 and 2019. Electronics prices began falling consistently in December 2021 (down 2.6% YoY), and have accelerated in recent months, dropping by 10% YoY in August and 11.3% YoY in September.
Groceries: Prices remain elevated and rose 14% YoY (up 0.7% MoM), but have begun to slow. Every month from Jan. 2022 (up 5.8% YoY) to Sept. 2022 (up 14.3% YoY) had marked a record YoY high for the category, with the exception of the latest month (Oct. 2022). Grocery prices have now risen for 33 consecutive months, and it remains the only category to move in lockstep with the Consumer Price Index on a long-term basis.
Computers: Prices fell sharply and were down 16.4% YoY (down 2.6% MoM), the biggest drop since the beginning of the COVID-19 pandemic in March 2020. October marks the fourth consecutive month where prices have fallen faster than pre-pandemic levels, which saw an average 9.2% YoY drop between 2015 and 2019.
Toys: Prices were down 7.1% YoY (down 3.5% MoM), marking the 19th consecutive month where prices have fallen on a YoY basis. Driven by early holiday deals, price decreases in October were greater than the months prior (down 5.3% YoY in September, down 4.5% YoY in August).
Sporting Goods: Prices were down 4% YoY (up 0.3% MoM), a record YoY low for the category this year. October marks the sixth consecutive month where prices have fallen on a YoY basis, after rising substantially in the early days of the COVID-19 pandemic, and reaching a record high in Sept. 2020 (up 15.8% YoY).
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.