Adobe announced the latest inflation data from the Adobe Digital Price Index (DPI), noting a significant decline in online prices. This deflation is a relief for small business owners, especially those involved in procuring electronics, computers, and appliances.
According to the DPI, powered by Adobe Analytics, online prices dropped by 2.6% year-over-year (YoY) in June 2023, the most substantial decrease since May 2020, when prices fell 1.5% YoY. This marked the 10th consecutive month of YoY price decreases, with 11 out of 18 Adobe-tracked categories seeing prices fall on a YoY basis. In a month-over-month (MoM) comparison, online prices fell 1.3% in June.
Sharp declines in certain categories have primarily fueled these price drops. Electronics saw a 12.9% YoY and 2.3% MoM decrease, computers declined by 16.9% YoY and 2.5% MoM, and appliances dropped by 8.3% YoY and 1.3% MoM. This presents an opportune moment for small businesses to invest in these sectors, as lower prices could lead to cost savings and potential business expansion.
The DPI also noted a slowing down in price increases for staple categories like groceries and pet products. For instance, June 2023’s 7.6% YoY increase in grocery prices is down from May 2023’s 8.2% YoY rise, signaling some relief to consumers as the high cost of food items starts to decline. This trend was also noticed in the pet products category, where online price hikes slowed to 8.1% YoY in June 2023, down from May’s 10.2% YoY increase.
Adobe’s DPI provides an extensive perspective on online prices, complementing the Bureau of Labor Statistics’ Consumer Price Index, which captures offline prices. The DPI analyzed 1 trillion visits to retail sites and over 100 million SKUs across 18 product categories.
In June, the largest price drop was noticed in the flowers and related gifts category, which fell 29.7% YoY and 6.1% MoM. By contrast, seven categories saw YoY price increases, including personal care, pet products, groceries, non-prescription drugs, tools/home improvement, medical equipment/supplies, and apparel.
For small businesses, particularly those operating online, this data could be pivotal. Price trends can significantly impact a company’s purchasing decisions, and thus its profitability. Businesses can leverage these insights to negotiate better deals with suppliers, optimize inventory, and anticipate future trends, which could prove critical in navigating an ever-evolving marketplace.
Small Business Deals
The declining trend in online prices, as per Adobe’s DPI, offers small businesses an unexpected respite, helping them make more cost-effective decisions. As small businesses continue to navigate the challenges posed by a fluctuating economy, such data-driven insights can guide strategic planning and successful operations.