According to data from Adobe’s Digital Price Index, online prices in January 2023 fell 1 percent year-over-year, the fifth consecutive month of year-over-year declines. Half of the 18 categories tracked by Adobe saw falling prices year-over-year.

Online prices in January rose 1.7 percent, following December when holiday discounts lingered past Cyber Monday.

January’s YoY price decline was primarily driven by a sharp decline in electronics (down 11.9 percent YoY, up 2.1 percent MoM) and computers (down 15.8 percent YoY, up 2.1 percent MoM). 

Consumers also saw prices fall YoY for home goods. Appliances were down 2.5 percent YoY (up 1.8 percent MoM), while Home/Garden products fell 3.5 percent YoY (up 1.2 percent MoM). Online prices in both categories fell YoY for three consecutive months. 

Sporting goods hit a record YoY low, falling 6.4 percent (up 0.6 percent MoM), with other notable categories with YoY price drops including Toys (down 5.5 percent YoY, up 4.9 percent MoM), Books (down 3 percent YoY, flat MoM) and Jewelry (down 0.9 percent YoY, up 5.8 percent MoM).

In certain categories with persistent inflation, YoY price increases slowed in recent months. Grocery prices were up 12.6 percent YoY (up 0.4 percent MoM), down from December 2022’s 13.5 percent YoY increase, marking the fourth consecutive month where YoY price increases for Groceries decelerated from September’s record high when prices rose 14.3 percent YoY. 

In the Tools/Home Improvement category, prices rose 6.9 percent YoY (up 0.1 percent MoM), down from December 2022’s 8.3 percent YoY increase. Pet product prices rose 10.5 percent YoY (up 0.8 percent MoM), down from the 11 percent YoY increase in December 2022.

“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 percent year-over-year,” said Patrick Brown, vice president of growth marketing and insights at Adobe. “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.”

Notable categories in the Adobe Digital Price Index for January

Adobe’s Digital Price Index provides the most comprehensive view into how much consumers pay for goods online, complementing the Bureau of Labor Statistics’ Consumer Price Index, which captures offline prices. Powered by Adobe Analytics, the DPI 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.

In January, nine of the DPI’s 18 categories saw YoY price decreases, with the flowers/related gifts category falling the most at 21.6 percent YoY. Nine categories experienced YoY price increases, including personal care, office supplies, furniture/ bedding, pet products, groceries, non-prescription drugs, tools/ home improvement, medical equipment/supplies and apparel. On a MoM basis, only one of the 18 categories in the DPI (flowers/related gifts) saw prices fall, following persistent holiday discounts in December 2022.

Notable categories for January 2023 include:

  • Home and Garden: Prices were down 3.5 percent YoY (up 1.2 percent MoM), marking the third consecutive month where prices fell on an annual basis (down 2.7 percent YoY in December, and down 2.1 percent YoY in November). This comes after prices for the category rose for 14 consecutive months, peaking at 2.7 percent YoY in March 2022.  
  • Sporting Goods: Prices were down 6.4 percent YoY (up 0.6 percent MoM), a record YoY drop for the category since Adobe began tracking online prices in 2014. Prices for the category have now fallen YoY for nine consecutive months, beginning on May 2022; prior to that, prices had risen YoY for more than two consecutive years (28 months). 
  • Groceries: Prices rose 12.6 percent YoY (up 0.4 percent MoM) but have slowed in the past four months, rising 13.5 percent YoY in December, 13.7 percent YoY in November, and 14 percent YoY in October. In September, prices peaked, rising 14.3 percent YoY. Consumers are increasingly buying more of their groceries online, and this category has generally moved in lock step with the Consumer Price Index.
  • Tools and Home Improvement: Prices rose 6.9 percent YoY (up 0.1 percent MoM) but have slowed in the past five months after peaking in August 2022, when prices rose 10.9 percent YoY. The slowing of price increases is welcome news for consumers, as the category has seen persistent inflation for more than two consecutive years (26 months).