March 2022 marked the 22nd consecutive month with increasing online inflation — but consumers continued to spend.
Online prices increased 3.6%year-over-year (YoY) and 0.3% month-over-month (MoM) during March 2022, matching the record YoY high set in February 2022, according to the latest Adobe Digital Price Index (DPI) figures.
Consumers spent $83.1 billion in March 2022 (up 7% YoY), a significant increase from $67.0 billion spent in February. Of the $83.1 billion, a total $2.8 billion was driven by higher prices. In other words, consumers paid $2.8 billion more for the same amount of goods.
The March growth is impressive, Adobe noted, considering that a year ago (March 202), a round of stimulus payments helped drive a record $77.7 billion in consumer spending online—an unanticipated 48.7% growth YoY.
During the month, prices for apparel increased 16.3% YoY (up 0.3% MoM), more than any other category. Apparel also rose the most, up 16.7%, in February. The category has now seen a full year of online inflation (12 consecutive months), and Adobe has noted it is a departure from a predictable pattern pre-pandemic, where seasonal discounting drove peaks and valleys in apparel prices online.
Grocery prices continued to surge and rose 9% YoY (up 1.4% MoM), setting a new record. February marked the 26th consecutive month where online prices have risen for groceries, making it the only category that has moved in lockstep with the Consumer Price Index.
Prices for everyday staples including pet products increased 7% YoY (up 1.5% MoM), and personal care items increased 1.4% YoY (up 0.1% MoM). Despite higher prices and supply chain challenges that drove 3.1 billion out-of-stock messages in March, demand for e-commerce remained strong. Consumers spent $83.1 billion (up 7% YoY), a significant increase from $67 billion in February.
In March, 14 of the 18 categories tracked by the DPI saw YoY price increases, with price drops observed in four categories: electronics, jewelry, toys and computers. On a MoM basis, 12 of the 18 categories saw March price increases, with price drops observed in categories including electronics, books, toys, flowers/related gifts, computers and sporting goods.
Here is a recap of other notable categories tracked by the Adobe DPI:
Pet Products: Online inflation is accelerating for the category as prices rose 7% YoY (up 1.5% MoM). This follows a 5.6% YoY increase in February and 4.7% YoY increase in January. Prices for pet products have risen for nearly two years (23 consecutive months).
Personal Care Products: Prices were up 1.4% YoY (up 0.1% MoM), marking the fourth consecutive month of online inflation after prices decreased 0.9% YoY in November 2021. Prior to the pandemic (before March 2020), online price increases were unusual for the category, with only two months seeing YoY online inflation over 1% (November 2017 up 2.4% YoY and December 2017 up 1.2% YoY).
Tools and Home Improvement: Prices were up 8.5% YoY (up 1.1% MoM), the highest increase for the category on an annual basis. In February, prices were up 7.8% YoY. March also marks the 16th consecutive month of YoY inflation for the category, as Adobe analysis indicates consumers continue to invest in the upkeep and maintenance of their homes.
“Consumers are feeling a greater hit to their pocketbooks, with consistently high levels of online inflation in categories such as groceries and pet products,” said Patrick Brown, VP of growth marketing and insights, Adobe. “But while e-commerce prices have risen more than years past, durable demand shows that consumers are embracing more personalized experiences in the digital economy as well as the conveniences of online shopping, particularly for growing categories like groceries.”
The Adobe DPI provides a comprehensive view into how much consumers pay for goods online. Powered by Adobe Analytics, it analyzes one trillion visits to retail sites and over 100 million SKUs across 18 product categories: electronics, apparel, appliances, books, toys, computers, groceries, furniture/bedding, tools/home improvement, home/garden, pet products, jewelry, medical equipment/supplies, sporting goods, personal care products, flowers/related gifts, non-prescription drugs and office supplies.
The DPI is modeled after the Consumer Price Index (CPI), published by the U.S. Bureau of Labor Statistics, and uses the Fisher Price Index to track online prices. 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.