Record levels of discounting during Cyber Week promotions caused online prices to fall by the largest year-over-year drop in 31 months, according to the Adobe
The index, released today, shows that online prices fell 1.9%, on an annual basis, in November. Prices were down 3.2% compared to October.
November was the third consecutive month that online prices have decreased on an annual basis.
The report is another indication that retail is returning to pre-pandemic norms. High demand and supply chain shortages in 2020 and 2021 kept online prices high and deep discounting unnecessary.
After years in which online prices typically declined year-over-year, Adobe began tracking consistent price increases, and saw a loss of online purchasing power during the pandemic.
Overall online spending rose 1.7% year-over-year in November, to $116.5 billion, showing strong demand, according to Adobe. Online sales were up 62.5% compared to October, showing that the deep discounting worked to drive purchases.
Adobe’s figures are not adjusted for inflation, but it said the higher spending reflected increased demand, not inflation.
“It is clear that strong consumer spending has been driven by net-new demand – and not simply higher prices,” Adobe reported.
Heavy discounting during the five-day Cyber Week period, between Thanksgiving and Cyber Monday, led to the sharp decline in prices on promotional items. Electronics and computers had their largest year-over-year price declines since 2014.
Electronics prices were down 13.4% year-over-year. “As the top ecommerce category by share of spend (18.6% share in 2021), price movements in electronics have a significant impact on overall inflation online,” Adobe reported.
Computer prices were down 18% year-over-year. Computer prices have declined for 23 consecutive months, after increasing 2.9% year-over-year in December, 2020, driven by the pandemic-related surge in working from home.
Holiday discounting also drove down toy prices, according to Adobe. Toy prices were down 7.7% year-over-year and 4.2% month-over-month. Sporting goods were down 5.7% year-over-year and down 4.3% from October.
Prices of essential, non-promotional items continued to rise in November, according the the Adobe Analytics data.
Groceries were up 13.7% year-over-year. Inflation in that category, however, is slowing, Adobe reported. Online grocery prices saw record increases every month this year from January to September. But in October and November the rate of increase was lover than the previous month.
Pet products prices also were up year-over-year in November, rising 11%. That category was down 0.2% month-over-month compared to October.
Those slowing growth rates in grocery and pet products are “signs of overall ecommerce inflation cooling,” Patrick Brown, vice president of growth marketing and insights at Adobe, said in releasing the report. “In categories such as groceries and personal care, which are not promotional in nature, we are seeing price increases come down from their heights in late summer and early fall,” Brown said.
Nine of the 18 price categories tracked by the Digital Price index had year-over-year decreases in November. In addition to grocery and pet products, the other seven categories that had year-over-year increases were apparel, personal care, office supplies, furniture/bedding, non-prescription drugs, medical equipment/supplies, and tools/home improvement.
The Digital Price Index is based on Adobe Analytics data culled from one trillion visits to retail sites, covering over 100 million SKUs in 18 product categories.