With public schools and colleges debating on whether or not students will return to school in the fall, retailers and brands might struggle a little more when it comes to back-to-school sales.
The National Retail Federation, the retail industry's trade group, estimates that back-to-school and college spending will reach $101.6 billion, topping last year's $80.7 billion and surpassing $100 billion for the first time, the NRF reported Wednesday.
Consumers, however, may be paying a lot more for goods, from clothing to computers, as they search online for the best buys. While online retail prices “plummeted” during the first six months of 2020 as brands tried to use discounts to put consumers in the shopping mood, the prices for many items online are on the rise.
Prices are fluctuating as brands and retailers try to recoup some losses. Adobe’s June Digital Economic Index (DEI) shows consumers are getting far less for their online dollars for the first time since the company began tracking digital purchasing power (DPP).
Vivek Pandya, digital insights manager at Adobe, believes prices are rising during a time when they usually fall. And inflation in other major shopping categories has depressed how much shoppers can get for their money online.
COVID-19 shelter-in-place mandates and store shutdowns are likely behind the unseasonal pricing ups and downs.
While total online spending of $73 billion in June marked a 76.2% increase year-over-year, it was down from May — $82.5 million — a decline typical at this time of the year, according to Pandya.
Meanwhile, although prices for online groceries increased by only a half-percentage point in June, they are still high for this time of year, according to the Adobe DEI -- which, powered by Adobe Analytics, is based on an analysis of aggregated and anonymized data from 1 trillion visits to retail sites and over 100 million SKUs from 80 of the top 100 U.S. retailers.
Grocery prices typically increase more in the second half of the year around the holidays, but COVID-19-related factors forced prices up -- 4.2% from January through June -- a 500% increase compared with the average cumulative inflation levels for the same time period.
Online groceries only increased a half-percentage point in June, but that’s still high for the month, according to Adobe DEI.
Computer prices rose 6.2% since March and wiped out any decrease in price, but that increase is now slowing.
In the apparel category, deflation in prices for the first half of a typical year is between 4% and 6%, but this year prices dropped much more, down 13%.
Buy online and pick-up in-store orders also have declined. June saw a 21% decrease in BOPIS orders compared with May, although it’s still a 130% increase year-over-year.