Want to know how to spend your next $1?
Don’t waste another dime on bloated channel reporting and vanity metrics.
Don’t waste another dime on bloated channel reporting and vanity metrics.
Adobe's Digital Price Index reading for November recorded the steepest drop in online inflation in 31 months.
Discounts to kick off the heart of the holiday shopping season helped drive online prices to their steepest drop in more than two-and-a-half years, according to the November online inflation reading from Adobe Analytics.
Adobe’s Digital Price Index for November shared the following:
It’s a move toward complete deceleration, after a mixed bag in October that showed prices falling on an annual basis, but ticking up from a monthly level.
The falling prices were driven by heavy discounting for Cyber Weekend, which ushers in holiday shopping from Thanksgiving-Cyber Monday. With shoppers looking for deals as a result of inflation across the economy, this season is being touted by retail executives as one that is exceptionally promotional. Electronics and computers saw the largest annual drops on record on month when electronics discounts peaked at 25% on Cyber Monday. Meanwhile, toys and sporting goods also saw significant price decreases.
The lower prices helped to keep demand high for cyber week, despite concerns about shoppers cutting back for the season as a whole due to inflation and a darkening economic forecast for 2023. Adobe previously reported that Cyber Monday alone drove a record $11.3 billion in ecommerce spending, while the week as a whole drove $35.3 billion. The discount rate was elevated across categories, with toys peaking at 34% off, and appliances ticking up to 16% off.
It comes as prices across the economy begin to come down. The overall deflation was on view across categories.
“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 a statement. “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.”
(Courtesy photo)
Here’s a closer look at the category trends on display, according to Adobe:
Electronics: Prices were down 13.4% year-over-year, and 4.5% month-over-month. The annual decrease was the largest drop on record since 2014, and well above the second-largest of drop of 12.8% observed in December 2019. The second largest was in December 2019, when prices fell 12.8% YoY. Electronics is the largest commerce category by share of spend, accounting for 18.6% of online dollars spent in 2021.
Computers: Prices were down 18% year-over-year, and 5.1% month-over-month. This was also the largest year-over-year drop on record since 2014. This also well outpaced the second largest fall of 16.9% year-over-year in 2019. Computer prices online have fallen for 23 straight months, since December 2020.
Groceries: Prices rose 13.7% year-over-year, and 0.3% month-over-month. Mirroring overall food price increases, this category continues to have stubbornly high digital inflation. But it has continued to slow in the last two months. But prices have begun to slow in the past two months. Through September, every month in 2022 marked a year-over-year high in grocery prices. However, a fall began in October, as prices increased 14%.
Pet Products: Prices rose 11% year-over-year, and were down 0.2% month-over-month. This category has also slowed down after reaching a record high of 12.7% in August. after hitting a record YoY high in August 2022 (up 12.7% YoY). Price increases in November also slowed when compared to the prior two months.
(Photo courtesy of Adobe)
Will this DPI reading and the forthcoming data for December be an outlier due to the holidays, or will this this data be a leading indicator that inflation across the economy is starting to cool?
For the wider economy, the Fed-preferred Personal Consumption Expenditures Index showed that inflation for all goods and services cooled to 6% in October, which was its lowest level since December 2021.
While the Digital Price Index hasn’t always moved in line with the overall economy, today’s report will surely raise hopes that the more widely-measured inflation measure of the Consumer Price Index, and the wholesale reading from the Producer Price Index will show further cooling of broad-based inflation when November data is released next week.
The cuts amount to 4% of the ecommerce platform's workforce.
On ebay's campus. (Photo by Flickr user Kazuhisa OTSUBO, used under a Creative Commons license)
eBay is set to become the latest ecommerce platform to conduct layoffs.
The company announced plans on Tuesday to lay off 500 employees, which amounts to about 4% of its workforce. Layoffs were set to take place over the next 24 hours, the company said Tuesday evening.
In an SEC filing, CEO Jamie Iannone said the decision to make layoffs came after consideration of the macroeconomic environment and where the company could best invest for the long-term.
Iannone said the moves “are designed to strengthen our ability to deliver better end-to-end experiences for our customers and to support more innovation and scale across our platform.”
“Importantly, this shift gives us additional space to invest and create new roles in high-potential areas — new technologies, customer innovations and key markets — and to continue to adapt and flex with the changing macro, ecommerce and technology landscape,” Iannone wrote. “We’re also simplifying our structure to make decisions more effectively and with more speed.”
eBay is one of the oldest ecommerce platforms, and remains an active marketplace for both new and resale items. The San Francisco-based company has yet to report results for the fourth quarter of 2022. In the third quarter, the company said gross merchandise volume was down 11%, and revenue was down 5% year-over-year.
Yet the company has also continued to invest. In 2022, it acquired collectibles platform TCGPlayer and myFitment, which provides parts and accessories for automotive and powersports. It also opened a secure vault for trading cards, and launched livestreaming.
eBay is also seeing a boost from advertising, with revenue driven by promoted listings up 19% in the third quarter.
With the layoffs, eBay joins other tech companies that provide the infrastructure of ecommerce in making layoffs. Amazon, Shopify, Salesforce, BigCommerce and Wayfair have all recently announced layoffs. Technology giants like Meta, Google and Microsoft have also made job cuts.
It comes as inflation is weighing on consumers’ discretionary spending, and the return to more in-person shopping throughout 2022 led to a correction following aggressive hiring during the pandemic.