Adobe Digital Price Index: Online Prices Fell 1.9% November 2022 – Largest Drop in 31 Months

Adobe released its latest online inflation data from the Adobe Digital Price Index (DPI) for November 2022, showing that online prices fell 1.9% year-over-year (YoY) and 3.2% month-over-month (MoM).

Why does it matter? Adobe’s DPI provides a broad view of eCommerce sales online in the United States and enables online merchants and marketplace sellers to understand market conditions.

But more importantly, the November data showed again that online inflation continues to ease, resulting in the largest drop in 31 months with consumers snapping up holiday gifts as heavy discounting drove sales.

What is the DPI? Using the Fisher Price Index, the DPI tracks eCommerce prices in 18 categories and is modeled after the Consumer Price Index (CPI), published by the US Bureau of Labor Statistics.

The Fisher Price Index uses quantities of matched products purchased in the current period (month) and a previous period (previous month) to calculate the price changes by category.

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

Adobe DPI Category Highlights for November

Electronics: Prices were down 13.4% YoY (down 4.5% MoM), the largest YoY drop on record since 2014. The second largest was in December 2019, when prices fell 12.8% YoY. As the top eCommerce category by share of spend (18.6% share in 2021), price movements in electronics significantly impact overall inflation online.

Computers: Prices were down 18% YoY (down 5.1% MoM), the largest YoY drop on record since 2014. The second largest was in December 2019, when prices fell 16.9% YoY. Computer prices online have fallen for 23 consecutive months, after rising 2.9% YoY in December 2020 when the stay-at-home trend drove up demand.

Groceries: Prices rose 13.7% YoY (up 0.3% MoM) but have begun to slow in the past two months. From January (prices up 5.8% YoY) through September (prices up 14.3% YoY), every month in 2022 had marked a record YoY high for grocery prices. In October 2022, however, prices rose 14% YoY, less than the month prior.

Pet Products: Prices rose 11% YoY (down 0.2% MoM), after hitting a record YoY high in August 2022 (up 12.7% YoY). Price increases in November have also slowed compared to the two months prior, including October (up 11.9% YoY) and September (up 11.8% YoY).

What they said: “While the November drop in online prices was driven by major discounting on days including Cyber Monday and Black Friday, we also see signs of overall eCommerce inflation cooling,” said Patrick Brown, vice president of growth marketing and insights at Adobe.

“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.”

What else is important to know: The decline in online prices for November was driven by heavy discounting during Cyber Week, the five-day period between Thanksgiving (November 24) and Cyber Monday (November 28).

Also, falling prices in categories such as toys and electronics accelerated demand in November, generating $116.5 billion for eCommerce, growing 1.7% YoY and a significant 62.5% (MoM).

Adobe’s figures are not adjusted for inflation. But with the November DPI down 1.9%, offering a clear indicator that strong consumer spending has been driven by net-new demand — and not simply higher prices.

Where can I get more information? To stay on top of the latest online inflation data, follow the Adobe Digital Price Index here.