Inflation Spreads to Online Retail, Once a Haven of Discounts
Inflation Spreads to Online Retail, Once a Haven of Discounts
(Bloomberg) -- E-commerce, once the land of discounts and cheaper goods, has become a steady source of inflation in the pandemic recovery.
Online prices rose 1.9% in October from a year earlier and 0.9% from the previous month, according to data from software company Adobe Inc. It marks the 17th straight month of increases after more than six years of declines in the Adobe Digital Price Index.
Rising prices at the start of the holiday shopping season -- a time when retailers normally begin to push deals -- is another sign of how broad-based inflation has become in the country. E-commerce is even more ubiquitous in the pandemic era, when Americans stuck at home got used to ordering everything from their phones or computers.
Adobe expects $1 in every $4 to be spent online this holiday season.
“As e-commerce takes on a greater share of overall retail, the pricing trends have become a more important indicator of net impact to consumers,” Vivek Pandya, an analyst at Adobe, said in a report.
The silver lining for consumers -- and policy makers -- is that online price increases remain far below overall inflation, which rose 6.2% last month, the fastest annual pace since 1990.
The annual growth in Adobe’s price index in October was also slower than in September, a sign that some retailers did offer discounts to entice consumers to shop for gifts early amid supply-chain snarls.
Prices of some categories such as electronics, jewelry and toys are still falling online year over year, Adobe data show.
But tight inventories mean that retailers will have less of a need for markdowns this holiday season, too. Last month, consumers saw over 2 billion out-of-stock messages online, according to the Adobe report. Ongoing supply-chain disruptions and strong demand will probably keep pushing prices up, according to Pandya.
Among the 18 product categories tracked by Adobe, only books had lower annual inflation last month compared with the 2015-2019 historical average.
Adobe analyzes 1 trillion visits to retail sites and over 100 million products.
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