Adobe: Online prices drop in September

For at least one month, U.S. consumers got some relief in their e-commerce spending.

Online prices decreased 0.2% year-over-year (YoY) and rose 0.8% month-over-month (MoM) in September 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 and dropping 1% YoY in July 2022, following 25 previous straight months of online inflation.

During September 2022, prices for electronics, the largest category in e-commerce with 18.6% share of spend recorded by Adobe in 2021, fell sharply and decreased 11.3% YoY (down 1.2% MoM). This is a greater YoY decrease than August (down 10% YoY) and July (down 9.3% YoY).

Prices for computers also fell significantly, according to the DPI, decreasing 14.1% YoY (down 1.9% MoM), greater than the month prior when prices fell 12.6% YoY. The September price decreases for electronics and computers are both record lows in 2022.

Prices for food have remained high, with grocery prices rising 14.3% YoY (up 0.8% MoM), another record YoY high and the largest increase of any category. Prices for pet products also remained elevated, increasing 11.8% YoY (up 0.01% MoM). Other categories that saw prices jump in September include tools/home improvement (up 10.5% YoY, up 0.3% MoM) and apparel (up 4.7% YoY, up 6.6% MoM)—another major category in e-commerce, second only to electronics.

During September 2022, 11 of the 18 categories tracked by the DPI saw YoY price increases, with groceries rising the most. Adobe saw price drops in seven categories: electronics, jewelry, books, toys, flowers/related gifts, computers and sporting goods.

Eight of the 18 categories in the DPI saw MoM price increases. Adobe observed price drops observed across ten categories including electronics, personal care products, jewelry, books, furniture/bedding, toys, home/garden, appliances, computers and sporting goods.

Notable categories in the Adobe Digital Price Index for September 2022

• Electronics: Prices were down 11.3% YoY (down 1.2% MoM), falling faster than pre-pandemic levels when electronic prices fell 9.1% YoY on average between 2015 and 2019. Prices have fallen consistently since Dec. 2021 (down 2.6% YoY) and accelerated in recent months (down 10% YoY in August, down 9.3% YoY in July).
• Computers: Prices were down 14.1% YoY (down 1.9% MoM), the biggest drop since the beginning of the COVID-19 pandemic in March 2020. Computer prices have fallen online for 21 consecutive months, and now outpace pre-pandemic levels when prices fell 9.2% on average between 2015 and 2019.
• Groceries: Prices continued to surge and rose 14.3% YoY (up 0.8% MoM), more than any other category. It is a new record on an annual basis, following a series of record highs: 14.1% YoY increase in August, 13.4% YoY increase in July, 12.4% YoY increase in June. Grocery prices have risen for 32 consecutive months, and it remains the only Adobe DPI category to move in lockstep with the Consumer Price Index on a long-term basis.
• Pet Products: Prices were up 11.8% YoY (up 0.01% MoM), slightly below the record YoY high in the month prior (up 12.7% YoY in August). Online inflation for pet products has now been observed for 29 consecutive months, as pet ownership surged during the COVID-19 pandemic and demand for related goods remains high.

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.