Online prices continue slow growth trend
Although online inflation increased for the 25th straight month in June, its growth is starting to slow.
Online prices increased 0.3% year-over-year in June while decreasing 1% month-over-month, according to the latest Adobe Digital Price Index. While this marked the 25th month of online inflation year-over-year, June is the third month where online price increases have slowed.
In 2022 so far, consumers have spent a total of $451.7 billion online, up 7.5% year-over-year. In June, consumers spent $74.1 billion online, which represents approximately 1% year-over-year growth. Online spending decreased in June compared to April ($77.8 billion) and May ($78.8 billion) 2022. The Amazon Prime Day event, which historically drives higher levels of overall online spending, occurs July 12-13 this year.
[Read more: Amazon sets official date for Prime Day]
Key categories including online electronics and apparel saw price decreases, driving down online retail inflation overall. In June, 11 of the 18 categories tracked by Adobe saw year-over-year price increases, with groceries rising the most. Price drops were observed in seven categories: electronics, jewelry, books, toys, computers, sporting goods and apparel.
Eleven of the 18 categories saw price increases month-ver-month. Price drops were observed across seven categories including electronics, office supplies, books, appliances, flowers and related gifts, computers and apparel.
Notable categories in the Adobe Digital Price Index for June:
- Apparel: Prices were down 0.1% year-over-year (down 4.06% month-over-month) – standing out as the category with most notable change in June and significantly down compared to its 9.03% YoY increase in May. This is the largest YoY drop for the category since March 2021, when prices were down 3.4% YoY.
- Electronics: Prices continued to decrease 7.28% YoY (down 1.34% MoM). This is the largest YoY decrease for the category since May 2020, when prices were down 6.8% YoY.
- Groceries: Prices in this category continued to surge and rose 12.44% YoY (up 0.7% MoM), setting a new record on an annual basis. This follows a series of record highs: 11.7% YoY increase in May, 10.3% YoY increase in April, 9% YoY increase in March and a 7.6% YoY increase in February. Groceries remains one of the main categories to move in lockstep with the consumer price index (CPI) on a long-term basis, with online prices rising now for 29 consecutive months.
- Pet products: Prices were up 11.35% YoY (up 2.01% MoM), continuing to set record YoY highs for the category. Online inflation for pet products has now been observed for 26 consecutive months as Adobe says consumers continue to bring pets home during the pandemic, boosting demand.
- Tools and home improvement: Prices were up 10.44% YoY (0.60% MoM), the highest increase for the category on an annual basis. June also marks the 19th consecutive month of YoY inflation for the category.
The 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.