In a silver lining for inflation-weary consumers, online prices fell in December as retailers resorted to deep discounts to lure shoppers, according to a Tuesday report from Adobe Analytics.
According to Adobe, e-commerce prices are 1.6% lower than last year, marking the fourth straight month of annual price declines.
For many years, e-commerce was immune to inflationary pressures, so online prices only fell. Things changed after the Covid-19 pandemic started as online prices rose due to strong demand and supply chain issues.
Vivek Pandya, lead analyst for Adobe Digital Insights, told CNN that lower prices would be a big win for consumers.
“When online prices started to fall towards the summer, we thought that one month might be a fluke, but two months could be a trend,” said Pandya. “In his fourth straight month of online deflation, price gains have also cooled in non-promotional categories, an encouraging sign for consumers worried about high inflation.”
The report comes at a time when government data show inflation continues to cool. The Bureau of Labor Statistics is due to announce Thursday that consumer prices rose 6.5% year-on-year in December, marking the sixth straight month of easing inflation.
Holiday season promotions helped push prices down in December. According to Adobe, the categories whose prices have fallen the most include computers (-16.2% year-on-year), electronics (-12%), toys (-7.1%) and sports equipment (-5.9%).
“Retailers who were dealing with excess inventories or grappling with a softening spending environment have accepted deep discounts this year to boost sales volumes,” said Pandya.
Prices for products that typically don’t have significant discounts, such as personal care (+1.6%) and medical devices (+4.1%), continue to rise.
Grocery prices rose 13.5% year-on-year in December, marking the third straight month of easing inflation in the category after hitting a record high of 14.3% in September.
Online prices have been declining over the years, but Adobe said they rose 1.1% from November to December.
Pandya said the month-over-month increase was due to the fact that many retailers offered record discounts around Black Friday and Cyber Monday in November, which eventually disappeared. .
“It would have been insane if the price hadn’t gone up month to month,” he said.
Asked if online prices were returning to their normal pre-corona trends, Pandya said prices in some categories, such as groceries and apparel, remained high, while others, such as electronics, remained consistent. He said that prices are dropping.
“We’re not out of the woods yet, but we’re heading in that direction,” he said.
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
THE-CNN-WIRE ™ & © 2023 CABLE NEWS NETWORK, INC., A TIME WARNER COMPANY. ALL RIGHTS RESERVED.