Inflation update: These items just got more expensive for people shopping online

By Michael Grothaus

August 26, 2021

You’re not imagining it. Online shopping is becoming more expensive. That’s according to the latest Adobe Digital Economy Index (DEI) report. Adobe’s DEI tracks the prices of consumer goods purchased online, much like the Consumer Price Index (CPI) tracks the prices of goods bought in traditional stores. Each index, in other words, tracks inflation.

And for years, the DEI showed that online prices generally became cheaper year after year, thanks in part, to lower overheads, increased competition, and a glut of availability of the products sold online. But COVID-19 changed all that as consumers rushed to switch their shopping habits from the brick-and-mortar world to the digital one. With that change came a surge in demand-and-supply chain constraints, according to Adobe, which leads to either a rise in goods bought online or a deceleration in their trend to become cheaper over time.

Of the 18 categories tracked by Adobes DEI, 12 of them saw increased prices in July 2021 compared to a year earlier. Apparel was the worst hit, with prices rising 15.26% (compared to an average annual 1.08% decrease YOY in years before the pandemic). Nonprescription drugs were another category that saw a massive price hike, rising 5.66% in July 2021. Sporting goods, books, flowers and related gifts also saw price rises of 3.54%, 2.26%, and 1.91%, respectively.

But the news gets worse. While Adobe’s DEI showed that 6 of the 18 categories it tracks did see YOY price decreases in July 2021, those annual decreases didn’t reduce as much in cost as in previous years. For example, while computers saw an average annual decrease in price of 9.24% in the years before the pandemic, that decrease slowed to only 6.97% YOY in July 2021. Likewise, toys bought online historically saw an average annual decline in price of 5.54% in the years before the pandemic, but since then toys’ price declines have slowed to only 4.05%.

When all the categories are taken as a whole, online prices went up 3.1% YOY in July 2021. And unfortunately, Adobe sees this trend continuing. “With online shopping becoming more ubiquitous, and consumers getting more accustomed to ordering everyday staples through e-commerce, we expect online inflation will continue to rise and be in closer sync with offline prices,” Vivek Pandya, lead analyst, Adobe Digital Insights, said.