How inflation is hitting online prices of apparel to furniture
A driver pushes a dolly of boxes to load onto a FedEx delivery truck in Miami.
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Prices of goods online have now risen for an unprecedented 15 consecutive months, following what was a historical period of declines, according to a new report from Adobe Digital Insights.
According to the report, inflation is affecting pet products and nonprescription drugs as well as apparel, furniture, clothing, and floral arrangements.
Digital sticker prices have increased across all industries, meaning that e-commerce will soon be responsible for $1 out of $5 in American spending. This is an increase from the $1 per $6 Adobe stated in 2017. Adobe Digital Insights’ economy index monitors more than 1 trillion U.S. visits and more 100 million products in 18 categories.
Adobe last month found that online prices rose 3.1% and 0.1% respectively year-over-year. Online prices have fallen 3.9% per year on average between 2015 and 2019. Since 2014, Adobe has tracked its digital economy index.
Adobe noted in their report that price increases are occurring during periods when prices usually drop. In order to get customers’ loyalty, retail stores use intense promotions at the beginning of each summer to remove excess merchandise. This year, not so.
Vivek Pandya, Adobe Digital Insights’ lead analyst, said: “Categories which once were a marginal presence on ecommerce are now staples with unprecedented pricing trends and that no longer lower overall inflation.” We are now entering new territories.
Given this trend, Adobe is forecasting that — before Nov. 1 of this year — Americans will have spent more online than they rang up on the web in all of 2019.
In the eighteen months to 2021, consumers have already spent more than $541 million online. Adobe reports that this is an increase of 9% over the previous year and 58% over the same time in 2019.
On Tuesday, the Labor Department said prices for an array of consumer goods rose less than expected in August, offering one sign that inflation may be starting to cool. These data do not include online price.
“The bulk of the recent upturn in U.S. inflation has been driven primarily by supply chain bottlenecks and low levels of inventories, but higher labor costs are often passed on to consumers and are considered a precursor of broader inflation,” National Retail Federation chief economist Jack Kleinhenz said.