Online inflation slows for third consecutive month

As "real world" inflation hits a four decade peak, prices online continue to drop.

Chat with MarTechBot

As U.S. inflation hit a 40 year peak, topping 9%, online inflation slowed for the third consecutive month. The overall inflation figure is driven by rising “real world” costs, such as gas, food and rent. Online inflation reflects the price of digital purchases and is tracked by the Adobe Digital Price Index across 18 product categories.

The main takeaways. Figures for June showed the growing value of the digital commerce space, with spending up 7.5% YoY. While online prices were up a modest 0.3% YoY, they dropped 1% month over month, the third consecutive month of decline.

The cost of digital grocery shopping reflected the experience of brick-and-mortar grocery shopping, up 7.1% on last month and 12.4% YoY.

Get MarTech! Daily. Free. In your inbox.

Performance by category. Groceries surged in cost more than any other category. Although the majority of the eighteen categories tracked showed price increases, these were outweighed by price drops across electronics, office supplies, books, appliances, flowers and related gifts, computers and apparel.

The findings are based on analysis of one trillion visits to retail sites and over 100 million SKUs across the product categories studied.

Dig deeper: Amazon Prime Day returns while retail and ecommerce rivals face inventory challenges

Why we care. With rising inflation dominating the news cycles (and there’s some competition for that), it’s counter-intuitive to find a story about inflation dropping, if only a little. It’s a reminder that there are significant differences between the digital and physical worlds, the obvious overlap being groceries with many consumers becoming habituated to ordering even fresh produce online during the lockdown.

It shows what happens when you take fuel and rent out of the equation. People don’t buy gas online, right?

About the author

Kim Davis
Kim Davis is currently editor at large at MarTech. Born in London, but a New Yorker for almost three decades, Kim started covering enterprise software ten years ago. His experience encompasses SaaS for the enterprise, digital- ad data-driven urban planning, and applications of SaaS, digital technology, and data in the marketing space. He first wrote about marketing technology as editor of Haymarket’s The Hub, a dedicated marketing tech website, which subsequently became a channel on the established direct marketing brand DMN. Kim joined DMN proper in 2016, as a senior editor, becoming Executive Editor, then Editor-in-Chief a position he held until January 2020. Shortly thereafter he joined Third Door Media as Editorial Director at MarTech.

Kim was Associate Editor at a New York Times hyper-local news site, The Local: East Village, and has previously worked as an editor of an academic publication, and as a music journalist. He has written hundreds of New York restaurant reviews for a personal blog, and has been an occasional guest contributor to Eater.

Get the must-read newsletter for marketers.