Adobe recently announced the latest data from its Digital Price Index (DPI). Adobe’s DPI tracks online inflation, and the latest findings reveal a significant 2.3% year-over-year (YoY) decrease in online prices for May 2023. This decrease, the largest since the onset of the COVID-19 pandemic, marks the ninth consecutive month of YoY price reductions.
Notable Findings
The DPI tracks 18 categories, and over half (11 of 18) experienced falling prices on an annual basis. On a month-over-month (MoM) basis, online prices decreased by 1.2% in May.
Notably, discretionary categories witnessed steep YoY price drops. These include computers (down 16.5% YoY and 2.4% MoM), electronics (down 12% YoY and 1.8% MoM), and appliances (down 7.9% YoY and 2.4% MoM).
On the other hand, YoY price increases for consumer staples have been slowing in recent months. While grocery prices were up 8.2% YoY (and 0.3% MoM), this increase is slower compared to April 2023’s YoY increase of 9.3%. In the personal care category, prices were up 2.7% YoY (down 0.3% MoM), again marking a deceleration compared to the 3% YoY growth in April 2023 and 4.4% YoY growth in March 2023.
Other Key Categories
In May, the largest drop was seen in the flowers/related gifts category, down 27.8% YoY (and 0.3% MoM). On the flip side, seven categories witnessed YoY price increases, namely personal care, pet products, groceries, non-prescription drugs, tools/home improvement, medical equipment/supplies, and apparel.
Importance of the Adobe Digital Price Index
Adobe’s DPI offers an insightful view into the prices consumers pay for goods online, thus supplementing the Bureau of Labor Statistics’ Consumer Price Index that tracks offline prices. Powered by Adobe Analytics, the DPI analyzes one trillion visits to retail sites and over 100 million SKUs across 18 product categories. This data is invaluable to small businesses as it provides a better understanding of online price trends, which can significantly impact their bottom line.
The recent data from Adobe’s DPI serves as a vital resource for small businesses operating in the e-commerce sphere. With online prices hitting a 36-month low, businesses need to consider these changing market dynamics in their pricing strategies. As online prices continue to fluctuate, tracking these changes and adjusting business strategies accordingly will be critical to maintaining competitiveness and profitability.
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