Adobe: Online prices fall for fourth straight month in December
Holiday discounting produced a year-over-year decline in overall U.S. online prices during December 2022.
Online prices decreased 1.6% year-over-year (YoY) while rising 1.1% month-over-month (MoM) in December 2022, according to the latest Adobe Digital Price Index (DPI) figures, based on Adobe Analytics. This marks the fourth consecutive month when online prices have decreased on a YoY basis.
Nine of the 18 product categories tracked in the DPI experienced YoY online price decreases. Following record discounts around Cyber Week, the five-day period between Thanksgiving (Nov. 24) and Cyber Monday (Nov. 28), that helped cut e-commerce inflation in November, online prices rose 1.1% MoM.
[Read more: Adobe: Toys, Cyber Week, discounts helped drive record online holiday sales]
According to Adobe analysis, the YoY December online price decline was driven by holiday discounting, including strong deals that lingered past Cyber Week. Online prices fell substantially for computers, with prices dropping 16.2% YoY (up 2% MoM), and electronics, which fell 12% YoY (up 1.9% MoM).
Holiday deals also drove down prices for appliances (down 2.1% YoY and up 3.8% MoM), toys (down 7.1% YoY and flat MoM) and sporting goods (down 5.9% YoY and up 1% MoM).
Adobe also tracked falling online prices as generating $95.1 billion for e-commerce, up 5.8% YoY. Adobe’s figures are not adjusted for inflation, but as December online prices dropped 1.6%, its analysis suggests that net-new demand was a major driver of increased consumer spending.
Online grocery price growth slows
Some non-promotional categories, meaning products that typically lack heavy discounting, saw continued slowing of price increases in December. Online grocery prices were up 13.5% YoY, while modestly increasing by 0.5% MoM.
This performance marks the third consecutive month when YoY online price increases have decelerated from record high growth rates reported in September 2022, when prices rose 14.3% YoY. October prices were up 14% YoY, and November prices rose 13.7% YoY.
In personal care, another non-promotional category, prices rose 1.6% YoY in December (up 2% MoM), a smaller increase than November and October, when prices rose 1.8% YoY and 3% YoY, respectively. Medical equipment and supplies similarly saw prices rise 4.1% YoY in December, a smaller increase than in November (5.3% YoY) or October (6.6% YoY).
Notable categories in the Adobe Digital Price Index for December
- Flowers/related gifts: Prices fell the most out of any category tracked by Adobe DPI, dropping 20.5% YoY. Nine categories experienced YoY price increases, including personal care, office supplies, furniture/bedding, pet products, groceries, non-prescription drugs, tools/home improvement, medical equipment/supplies and apparel.
- Appliances: Prices were down 2.1% YoY (up 3.8% MoM), marking the second consecutive month where YoY appliance prices fell after being down 2.9% YoY in November). This two-month drop comes after online prices for appliances increased for 30 consecutive months, peaking at 7.1% YoY in December 2020.
- Electronics: Prices were down 12% YoY (up 1.9% MoM), after dropping a record 13.4% YoY in November. As the top e-commerce category by share of spending (18.6% share in 2021), Adobe advises that electronics price movements have a significant impact on overall inflation online.
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.