Online Shopping Prices Down 1% In January Compared To Previous Year, Adobe Reports

Overall ecommerce prices declined, on an annual comparison, for the fifth consecutive month in January, according to the latest AdobeADBE
Digital Price Index, released February 9.

Prices were down 1% in January, compared to January, 2022, Adobe reported.

Adobe data also shows that even in the categories that remain inflationary, such as food, price increases have been decelerating since September.

The year-over-year price drop in January is a dramatic swing from January 2022, when online prices increased 2.7% on an annual basis.

Today’s report is another sign that the pandemic-driven pattern of consistent year-over-year monthly increases in online prices has ended.

Adobe tracked 25 consecutive months of overall price increases – on a year-over-year basis – between 2020 and mid-2022. The unbroken string of increases ended in July 2022. Prices rose slightly in August, 2022, and then decreased in October, November, and December, compared to the same months in 2022.

Year-over-year comparisons are considered the best measure of price changes because they are less impacted by seasonal fluctuations than month-over-month comparisons.

Compared to December, online prices were up 1.7% in January. Adobe, in its report released today, attributes that increase to deep holiday discounting during December.

Contributing to the lower prices is consumer caution about spending, Patrick Brown, vice president of growth marketing and insights at Adobe, said in a statement released with the report.

“The rising cost of living has made consumers more cautious about discretionary spending,” Brown said. Consumers spent $72.2 billion online in January, up only 1.7% compared to January, 2022, according to Adobe.

“Current demand levels are driving retailers to hold prices down and continue to clear out excess inventory,” Brown said.

Brown expects that “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.”

The categories that saw the steepest year-over-year price drops in January were flowers and related gifts (down 21.6%), electronics (down 11.9%), computers (down 15.8%), sporting goods (down 6.4%),toys (down 5.5%) and home and garden (down 3.5%).

In grocery, pet products, and tools and home improvement, three categories where prices increased on a year-over-year basis in January, the increases were below that of December, and significantly below record spikes earlier in 2022.

Grocery prices were up 12.6% year-over-year, and up 0.4% month-over-month compared to December. January was the fourth consecutive month that year-over-year price increases for groceries have decelerated, according to Adobe. Grocery prices had a record year-over-year spike in September of 14.3%.

The Adobe Digital Price Index uses Adobe Analytics to analyze data drawn from one trillion visits to retail sites covering over 100 million SKUs across 18 product categories.