Dive Brief:
- Online prices have fallen for the fifth consecutive month, dipping 1% in January year over year, according to Adobe’s Digital Price Index. Compared to December’s holiday discounts, online prices rose by 1.7%
- Flowers and gift-related purchases saw the one of greatest drops in year over year price decreases at 21.6%, followed by computers (-15.8%), electronics (-11.9%), sporting goods (-6.4%), toys (-5.5%) and home and garden prices (-3.5%), the report found.
- By contrast, grocery prices saw the one of the greatest jumps at 12.6% year over year, followed by pet products (10.5%) tools and home improvement (6.9%), per the report. Personal care, office supplies, furniture and bedding, non-prescription drugs, medical equipment and apparel also saw price increases year over year.
Dive Insight:
Other categories are seeing a price rebound following the holiday season. Taking into account month over month price changes, Adobe found jewelry prices rose 5.8% month over month, followed by toys (4.9%), electronics (2.1%), computers (2.1%) and appliances (1.8%), per the report.
“The rising cost of living has made consumers more cautious about discretionary spending, with $72.2 billion spent online in January, a modest increase of 1.7% year-over-year,” Patrick Brown, vice president of growth marketing and insights at Adobe, said in a statement. “Current demand levels are driving retailers to hold prices down and continue to clear out excess inventory. As shoppers become more selective in where they spend their money, e-commerce will be an important battleground this year as brands seek to retain customers and drive experience-led growth.”
In August, Adobe’s Digital Price Index released a report that also detected a dip in prices in July. At that time, online prices also dropped 1% compared to the previous year and 2% compared to the previous month. While electronics, toy prices, books, jewelry and clothing dropped that month, grocery, pet products, tools and home improvement prices and medical supply prices rose.
In light of inflation woes, grocery retailers have had to reduce prices to attract shoppers. A recent Deloitte report found that two-thirds of the retail executives surveyed said they believe prices will be more important to shoppers than loyalty to brands and retailers. However, the recent slowdown in inflation may offer both retailers and shoppers some reprieve.
