Adobe reported that online prices in March 2023, as tracked via the Adobe Digital Price Index (DPI)*, powered by Adobe Analytics, fell 1.7 percent year-over-year (YoY), marking the seventh consecutive month of YoY price decreases with over half of the categories (10 of 18) tracked by Adobe seeing falling prices on an annual basis. On a monthly basis, online prices in March remained flat (up 0.03 percent) versus February. Eight categories experienced YoY price increases, including personal care, office supplies, pet products, groceries, non-prescription drugs, tools/home improvement, medical equipment/supplies and apparel.
On a month-over-month (MoM) basis, 10 of the 18 categories in the DPI saw prices fall. Price increases were observed in eight categories including office supplies, jewelry, pet products, groceries, non-prescription drugs, appliances, medical equipment/supplies and apparel.
March’s YoY price decline was driven by steep drops in discretionary categories, including electronics (down 12.9 percent YoY, down 1.3 percent MoM) and toys (down 6.6 percent YoY, down 1.2 percent MoM). Prices also fell YoY for home goods—Appliances were down 4.9 percent YoY (up 0.8 percent MoM), Home/Garden products fell 4.9 percent YoY (down 0.3 percent MoM) and the Furniture/Bedding category fell 0.9 percent YoY (down 0.3 percent MoM).
In certain categories with persistent inflation, YoY price increases slowed in recent months. Grocery prices were up 10.3 percent YoY (up 0.4 percent MoM), down from February 2023’s 11.4 percent YoY increase, marking the sixth consecutive month where YoY price increases for groceries had decelerated from September’s record high when prices rose 14.3 percent YoY.
In the personal care category, prices were up 4.4 percent YoY (down 1.5 percent MoM), contrast this with February 2023 when personal care prices were up 6.1 percent YoY. In apparel, prices rose 6.6 percent YoY (up 1.8 percent MoM), an uptick from February 2023’s 5.1 percent YoY increase, but down from February 2022, when apparel prices were up 16.7 percent YoY.
Notable categories for March 2023 include:
- Apparel: Prices were up 6.6 percent YoY (up 1.8 percent MoM). Although this is an uptick from the month prior—when prices rose 5.1 percent YoY in February 2023, price increases for the category cooled in recent months, rising 5.1 percent YoY in January and 0.9 percent YoY in December. Compare this to a year ago, when prices rose 15.8 percent YoY in January 2022 and 16.6 percent YoY in December 2021.
- Groceries: Prices rose 10.3 percent YoY (up 0.4 percent MoM) but have slowed in the past six months, rising 11.4 percent YoY in February, 12.6 percent YoY in January, 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.
- Personal Care: Prices were up 4.4 percent YoY (down 1.5 percent MoM), a smaller increase than the month prior when prices rose 6.1 percent YoY (February 2023). The category has seen persistent inflation online, with prices rising for 16 consecutive months after dropping 0.9 percent YoY in November 2021.
- Furniture and Bedding: Prices were down 0.9 percent YoY (down 0.3 percent MoM), marking the second consecutive month where prices have fallen on an annual basis (down 0.1 percent YoY in February 2023). Prior to this, prices for the category had risen for 33 consecutive months, peaking in March 2021 (up 5.7 percent YoY). Consumers have become increasingly comfortable buying furniture online, after a pandemic where many wanted to spruce up their living spaces and had no choice but to tap e-commerce.
- Electronics: Prices fell sharply in recent months, dropping 12.9 percent YoY in March (down 1.3 percent MoM) and 12.6 percent YoY in February. Contrast this with a year ago, in February 2022, when prices were down 3.2 percent YoY. As a major discretionary category, electronics prices continue to see sharp drops even after the holiday shopping season, where prices fell 12 percent YoY in December and 13.4 percent YoY in November due to heavy promotions.
*Adobe’s 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.
Photo courtesy Lululemon