Adobe Digital Price Index: Online Prices Drop 2.3% in May 2023

Adobe has released the latest data from the Adobe Digital Price Index (DPI), powered by Adobe Analytics, revealing a significant decrease in online prices in May 2023.

Check Out These Resources

• Do you need a business bank account for your online business? Take a look at our review of the five best bank accounts for sellers, some of which are free with no minimum balance or deposits. ^[sponsored]
• Boost your social media engagement with Publer. Learn how you can save time writing engaging content faster with AI. ^[sponsored]
• Could your online business use capital for growth? Here is a primer on revenue-based loans, and how they work.

Year-over-year (YoY), online prices fell by 2.3%, marking the largest drop since the onset of the Covid-19 pandemic.

This decline continues a trend of YoY price decreases for the ninth consecutive month, with more than half of the tracked categories (11 out of 18) experiencing annual price drops. On a month-over-month (MoM) basis, online prices decreased by 1.2% in May.

The YoY price decline in May was primarily driven by substantial drops in discretionary categories such as computers (down 16.5% YoY and 2.4% MoM), electronics (down 12% YoY and 1.8% MoM), and appliances (down 7.9% YoY and 2.4% MoM).

In recent months, the YoY price increases for consumer staples have slowed down. While grocery prices saw an 8.2% YoY increase (and a 0.3% MoM increase), the rate of inflation was lower compared to the 9.3% YoY increase seen in April 2023.

This marks the eighth consecutive month of decelerating YoY price increases for groceries since the record high of 14.3% YoY in September 2022.

Similarly, in the personal care category, prices increased by 2.7% YoY (with a 0.3% MoM decrease), showing a slowdown compared to the 3% YoY growth seen in April 2023 and the 4.4% YoY growth in March 2023.

In May, 11 out of the 18 DPI categories witnessed YoY price decreases, with the flowers/related gifts category experiencing the most significant drop at 27.8% YoY (and a 0.3% MoM decrease).

On the other hand, seven categories saw YoY price increases in May, including personal care, pet products, groceries, non-prescription drugs, tools/home improvement, medical equipment/supplies, and apparel.

Adobe DPI Category Highlights for May

• Groceries: Prices rose by 8.2% YoY (and 0.3% MoM), but the rate of increase has been steadily slowing over the past eight months. In April, the YoY increase was 9.3%, followed by 10.3% in March, 11.4% in February, 12.6% in January, 13.5% in December, 13.7% in November, and 14% in October. The peak of price growth occurred in September, with a 14.3% YoY increase. The growing trend of consumers purchasing groceries online aligns with the movement of the Consumer Price Index for this category.
• Personal Care Products: Prices increased by 2.7% YoY (with a 0.3% MoM decrease), marking a sequential decrease since February 2023 when the YoY growth reached 6.1%. This category has been experiencing persistent long-term inflation, with only one month, November 2021, showing a YoY price decrease of 0.9% since September 2020.
• Appliances: Prices dropped by 7.9% YoY (and 2.4% MoM), representing the largest decline in this category since Adobe began tracking online prices in 2014. May marked the eighth consecutive month of falling appliance prices.
• Home and Garden: Prices decreased by 6.3% YoY (with a 0.9% MoM decrease), indicating a continued reduction in the cost of home and garden products. This is significantly lower than May 2022 when prices in this category rose by 2.5% YoY.

What Is the Adobe DPI?

The Adobe DPI utilizes the Fisher Price Index to monitor online prices across 18 different categories and is modeled after the structure of the Consumer Price Index (CPI) published by the U.S. Bureau of Labor Statistics.

To determine changes in prices per category, the Fisher Price Index compares the quantities of corresponding products purchased during the current period (month) to those purchased in the previous period (previous month).

Adobe’s analysis is weighted by the real quantities of the products purchased in the two adjacent months.

For the latest updates on online inflation data, follow the Adobe Digital Price Index at this link.