Media Alert: Adobe Digital Price Index: Online Inflation Rises in August to 0.4%

SAN JOSE, Calif. — Today, Adobe (Nasdaq:ADBE) announced the latest online inflation data from the Adobe Digital Price Index (DPI), powered by Adobe Analytics. In August 2022, online prices increased 0.4% year-over-year (YoY) and 2.1% month-over-month (MoM), with grocery prices seeing their highest annual increase (14.1% YoY) and electronics prices continuing to drop (10% YoY). Consumer spending online in August reached $64.6 billion, an increase of 6.5% YoY, attesting to the strength of the digital economy overall. In the month prior (July 2022), e-commerce entered deflation after 25 consecutive months of rising prices, dropping 1% YoY.

Online inflation in August was driven by groceries, where prices rose 14.1% YoY (up 1.1% MoM), another record YoY high for the category. Apparel prices have also contributed, rising 4.9% YoY (up 8.7% MoM) as seasonal promotions fade. Prices for apparel had fallen 1% YoY in the month prior (July), driven in part by back-to-school discounts and oversupply for certain retailers. Personal care products also saw a notable uptick in August, with prices rising 2.7% YoY (up 1.1% MoM), the highest YoY increase since March 2021, when prices hit a record high at 3.6% YoY. Categories such as electronics have kept topline inflation (up 0.4% YoY) below 1%, with prices falling significantly at 10% YoY in August (down 0.9% MoM). Computers have also contributed, with prices falling 12.6% YoY (down 2.3% MoM).

“The modest uptick we see in online prices for August was driven in large part by rising food costs that show no signs of abating, just as seasonal discounts in a category like apparel phased out through the end of Summer,” said Patrick Brown, vice president of growth marketing and insights, Adobe. “Consumer demand for e-commerce also remains steady and will keep prices elevated, especially for growing categories such as groceries, pet products and other consumer staples.”

In August, consumers spent $64.6 billion online, up 6.5% YoY. In the month prior (July), $73.7 billion was spent online, up 20.9% YoY on account of Prime Day discounts that drove record sales for the retail industry overall. For 2022 thus far, consumers have spent $590 billion online, growing 8.9% YoY and showing resiliency in e-commerce demand.

The DPI provides the most comprehensive view into how much consumers pay for goods online, as e-commerce expands to new categories and brands focus on making the digital economy personal. Powered by Adobe Analytics, it 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 August, 12 of the 18 categories tracked by the DPI saw YoY price increases, with groceries rising the most. Price drops were observed in six categories: electronics, jewelry, books, toys, computers and sporting goods.

Fourteen of the 18 categories in the DPI saw price increases MoM, following a prior month (July) where Prime Day and oversupply produced more substantial discounting. Price drops were observed across four categories including electronics, flowers and related gifts, computers and sporting goods.

Notable categories in the Adobe Digital Price Index for August:

The 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.

Powered by Adobe Analytics, Adobe uses a combination of Adobe Sensei, Adobe’s AI and machine learning framework, and manual effort to segment the products into the categories defined by the CPI manual. The methodology was first developed alongside renowned economists Austan Goolsbee and Pete Klenow.

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