Adobe Predicts Holiday Roller Coaster For Prices Online

Wholesale inflation rose more than expected for the second month in a row, mirroring a trend in the Consumer Price Index report, the Bureau of Labor Statistics reported Thursday -- something search marketers may need to consider when crafting campaign messages for the holiday season.

The U.S. Department of Labor said its Producer Price Index, which measures inflation, climbed 0.7% in August vs. the previous month. On an annual basis, prices are up 1.6%.

Monthly core inflation, which measures how quickly prices rise across the U.S. economy, rose 0.3% in August — up significantly for the first time since February, according to reports.

Adobe Digital Price Index (DPI) earlier this week released this week the latest online inflation data, reporting that online prices in August 2023 fell 3.2% year-over-year (YoY), hitting a 40-month low — and marking 12 consecutive months of YoY price decreases.



Online prices fell for more than half of Adobe’s tracked 11 of 18 categories on an annual basis, but on a month-over-month (MoM) basis, online prices rose 0.4% in August following the Prime Day event in July.

August’s YoY price decline was driven by notable drops in categories such as sporting goods — down 7% YoY. Appliances fell 7.3% YoY, but rose 1.3% MoM.

Home and garden products fell 6.8% YoY, but rose 0.2% MoM. Electronics saw a steeper decline, falling 11.6% YoY and 0.8% MoM. Computers fell 14.2% YoY and 1% MoM.

Inflation continues to impact grocery prices, but YoY increases have slowed for 11 consecutive months. Online prices rose 5% YoY in August, a smaller jump compared with increases in July at 6.3% and June at 7.6%.

Grocery prices fell 0.2% MoM, the first monthly decrease in this category since May 2021, a positive sign after 27 consecutive months.

Search & Performance Insider (S&PI) caught up with Vivek Pandya, group manager at Adobe Digital Insights, to ask how these numbers may affect the holiday shopping season.

S&PI:  Do you think the drop in prices will have any effect on shopping, specifically online?

Pandya:  Price decreases have continued to drive consumer demand for online purchases. With back-to-school shopping discounts in August, we saw favorable pricing on goods and how these discounts have been critical for sustaining the growth of online spend in the current economic environment. 

S&PI:  Do you think the price drop will continue through the end of the year?

Pandya:  For certain online categories, such as electronics, apparel, and toys, we should continue to see gradual price decreases month-over-month until November. Then we anticipate the drops in these categories will become more significant as we approach major discount days like Black Friday and Cyber Monday.

Yet once we hit mid-to-late December, we are likely to see prices start to tick back up.

S&PI:  How might this affect how advertisers buying media for the holidays?

Pandya:  With more consumers looking for discounts, advertisers will need to be conscientious about their audiences’ needs.

Creating highly personalized that reach target customers in the moments that matter on the right platforms will be critical for sustaining discretionary spending on goods throughout the holiday shopping season. This will drive purchases and help build relationships with customers for many years to come.

Next story loading loading..