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On today’s Business Beat, Jeff discusses the recent increase in e-commerce prices, and what that could mean for the economy as a whole.
Tune in to the Business Beat, below, to learn more about today’s trend in e-commerce inflation:
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Good morning, Paul!
E-commerce inflation continues to heat up as online prices continue to rise. According to the latest Adobe digital economy index report, online prices were up 3.1% in July of this year, compared to July of last year. And to put this in perspective, the 3.1% year over year increase in July is more striking when you consider that between 2015 and 2019 online pricing actually fell an average of 3.9% each year.
The Adobe index tracks 18 product categories, and in July saw prices increase in nine of those categories. Now with all the focus being paid today to online selling as a primary way to conduct business and as a primary way for consumers to buy things these days, Adobe began reporting on online pricing trends last month, after noticing that they were seeing a dramatic reversal on this five-year pattern of annual price decreases.
Why are prices increasing? Increased online shopping, surging demand and supply chain shortages have now made it the online price increases part of this new normal we fear, Paul. And according to a lead analyst at Adobe Digital Insights, says that as the digital economy expands online pricing trends will have a greater impact on how we measure and understand overall inflation. He reminds us that we should consider that just in the first seven months of 2021, consumers have already spent over $481 billion online. That’s a staggering 61% increase over the same period in 2019.
What are some categories driving the increase? Well, non-prescription drug category? That’s up 6% year-over-year in July and pet products up about one and a half percent. How about groceries? Up nearly one and a half percent as well. Categories seeing price decreases? Electronics down 2% and computers down about 7%.
So there you have it, Paul. Again, why is this relevant and why is this important? With so much consumer spending happening online today, as online inflation goes, so could go the overall economy.
I’m Jeff Sloan, founder and CEO of StartupNation.com, and that’s today’s Business Beat, on the Great Voice of the Great Lakes, WJR.