Online inflation growth slows in April
April 2022 marked the 23rd straight month online prices rose year-over-year – but there is a small silver lining.
According to the latest Adobe Digital Price Index (DPI), online prices increased 2.9% year-over-year (YoY), down from the record 3.6% YoY increase in March, a decrease of 0.5% month-over-month (MoM). While this marks the 23rd consecutive month of online inflation growth YoY, Adobe DPI analysis indicates April shows early signs of online price increases beginning to slow.
Over half of the categories tracked by the DPI (10 out of 18) saw MoM price decreases in April. Prices for electronics were down 5.2% YoY (down 0.9% MoM), a record YoY low for the category recorded by Adobe over the last 12 months.
Prices for apparel increased 12.3% YoY, while decreasing 1.7% MoM. Although this is the highest YoY increase of any category tracked by the Adobe DPI, it is down from recent highs (February 2022 at 16.7% YoY and March 2022 at 16.3% YoY).
Online grocery prices rose 10.3% YoY (up 1.3% MoM); as well as pet products, which rose 8% YoY (up 0.9% MoM). These were record YoY highs for both categories.
Computer prices were down 5.7% YoY (down 0.7% MoM). This is the 16th consecutive month of deflation for the category, after rising 2.9% YoY in December 2020. The price decrease is still below historical levels, however, with computer prices dropping 9.2% YoY on average from 2015 to 2019.
In April 2022, Adobe data shows consumers spent $77.8 billion online, which represents modest growth at 4.5% YoY. Online spending in the U.S. grew at much higher double-digit rates of 12.2% YoY ($71 billion) in January 2022 and 15.5% ($67 billion) in February.
Consumer spending in April is also below the $83.08 billion spent in March, representing a 6.8% decline MoM, or $5.28 billion. With rising interest rates and persistent inflation, consumers have pulled back on spending for durable goods.
In all, 13 of the 18 categories tracked by the DPI saw YoY price increases, with apparel rising the most. Price drops were observed in five categories: electronics, jewelry, books, toys and computers.
Eight of the 18 categories in the DPI saw price increases MoM. Price drops were observed across 10 categories including electronics, office supplies, jewelry, books, furniture/bedding, toys, home/garden, flowers/related gifts, computers and apparel.
“As the cost of borrowing and economic uncertainty rises for consumers, we are beginning to see the early impact on both online inflation and spend,” said Patrick Brown, VP of growth marketing and insights, Adobe. “However, durable demand for e-commerce still drove over $77 billion in spend last month, as consumers continue to embrace the ease of online shopping and more personalized customer experiences in the digital economy.”
Adobe DPI provides a comprehensive view into how much consumers pay for goods online. Powered by Adobe Analytics, it analyzes one trillion visits to retail sites and over 100 million SKUs across 18 product categories: electronics, apparel, appliances, books, toys, computers, groceries, furniture/bedding, tools/home improvement, home/garden, pet products, jewelry, medical equipment/supplies, sporting goods, personal care products, flowers/related gifts, non-prescription drugs and office supplies.
The 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.