Online inflation not slowing, prices up 3.1% in July, Adobe says

Ecommerce inflation continued in July, with online prices rising more year-over-year than in June, according to the latest Adobe Digital Economy Index report, released today.

Online prices rose 3.1% in July from July 2020, surpassing the 2.3% year-over-year increase in June.

Adobe began reporting on price trends online last month, after noting that they were seeing a dramatic reversal of a five-year annual price decline pattern. The increase in online shopping, increased demand and supply chain shortages have now made online price increases the new normal.

“Online inflation remains high and shows no signs of slowing down,” Adobe concluded in its July report.

With the massive growth in online shopping since the start of the pandemic, online price tracking has become more important for measuring inflation, according to Vivek Pandya, senior analyst, Adobe Digital Insights.

“As the digital economy grows, online pricing trends will have a greater impact on how we measure and understand inflation as a whole. Consider that in the first seven months of 2021, consumers have already spent over $ 481 billion online, a staggering 61% increase from the same period in 2019, ”Pandya said.

The 3.1% year-over-year increase in July is more striking when you consider that between 2015 and 2019, online prices fell at an average rate of 3.9% each year. . The Adobe index tracks 18 product categories, and in July saw price increases in nine categories that in the past have typically seen annual declines.

On a monthly basis, online prices fell 0.7% in July compared to June. Adobe considers year-to-year comparisons to be a better indicator, as greater online price volatility versus offline prices results in more monthly online fluctuations.

In electronics and computers, where prices fell further year over year, the declines were much smaller than average declines in the past.

Electronics fell 2.04%, compared to an average decline of 9.06%, while computers fell 6.97%, compared to an average annual decline of 9.24%.

One of the biggest changes Adobe has tracked has been in the non-prescription drug category, where prices rose 5.66% year-on-year in July, compared to a stable price trend, with an average increase. over five years of only 0.01%.

Pet products increased 1.37% year-over-year, groceries increased 1.28%, and personal care items increased 1.23%.

Clothing once again posted a double-digit increase, up 15.26% compared to July 2020.

One category where prices fell below the five-year average was office supplies, down 2.51%.