Adobe: Online prices hit 40-month low in August
A positive e-commerce trend continued for the 12th consecutive month in August 2023.
U.S. online prices in August 2023 fell 3.2% year-over-year (YoY), reaching their lowest point in 40 months. This made August the 12th consecutive month of year-over-year (YoY) price decreases, according to the latest data from the Adobe Digital Price Index (DPI), based on Adobe Analytics,
On a month-over-month (MoM) basis, online prices rose 0.4% in August 2023. However, Adobe attributed this small increase primarily to the July Amazon Prime Day sales event, which causes significant price drops across numerous e-commerce retailers trying to stay competitive with it.
Online prices fell for over half of Adobe’s tracked categories (11 of 18) on an annual basis. The August YoY price decline was driven by notable drops in categories such as sporting goods (down 7% YoY, down 1.4% MoM), appliances (down 7.3% YoY, up 1.3% MoM) and home/garden (down 6.8% YoY, up 0.2% MoM).
Electronics saw a steeper decline, falling 11.6% YoY (down 0.8% MoM),;as well as computers, which fell 14.2% YoY (down 1% MoM).
Although inflation continues to impact grocery prices, Adobe data indicates that YoY increases have now slowed for 11 consecutive months; Online prices were up 5% YoY in August, a smaller jump compared with 6.3% YoY in July 2023 and 7.6% in June 2023.
Grocery prices were down 0.2% MoM, the first monthly decrease in this category since May 2021, a positive sign after 27 consecutive months. Price increases have slowed for pet products as well. Prices were up 5.5% YoY (up 0.1% MoM), compared with an 6.3% YoY increase in July 2023, and an even more substantial 8.1% YoY increase in June 2023.
Notable categories in the Adobe Digital Price Index for August
- Groceries: Prices rose 5% YoY (down 0.2% MoM) but have slowed every month for the past 11 months, having reached a peak in September 2022 when prices increased by 14.3% YoY. Consumers are increasingly buying more of their groceries online, according to Adobe,and this category has generally moved in lock step with the Consumer Price Index.
- Pet products: Prices were up 5.5% YoY (up 0.1% MoM), reflecting slowing price increases since August 2022, when price growth peaked at 12.7% YoY. This category has seen persistent inflation on a long-term basis however, with YoY price increases observed by Adobe in every month since May 2020.
- Appliances: Prices were down 7.3% YoY (up 1.3% MoM) after hitting a record low in June 2023, where prices fell 8.3% YoY. Appliance prices online have now fallen YoY for 11 consecutive months, contrasting with 29 consecutive months of increases that started in May 2020, peaking at 7.1% YoY in December 2020.
- Electronics: Prices have continued to fall sharply in recent months, dropping 11.6% YoY (down 0.8% MoM), 11.7% YoY in July 2023, and 12.9% YoY in June 2023. As a major discretionary category, Adobe says 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.