Rising prices online, particularly in clothing and groceries, cost Americans $2.8 billion in March, according to the latest Adobe Digital Economy Index report, released today.
Consumers continued to spend vigorously, despite higher prices and 3.1 billion out-of-stock messages in March. Online spending was $83.1 billion in March, more than $16 billion more than the $67 billion that US shoppers spent online in February.
Adobe attributes $2.8 billion of that extra spending in March to inflation. “Consumers paid $2.8 billion more for the same amount of merchandise,” due to higher costs, Adobe reported.
Compared to March 2021, e-commerce spending was up 7% year over year. The strong growth in March from a year ago was particularly significant, Adobe reported, because in March 2021, a second round of stimulus checks helped generate a record $77.7 billion in spending this month, a jump of 48.7% year-over-year.
Although consumers are noticing higher online prices, that doesn’t force them to give up the convenience of shopping online, said Patrick Brown, vice president of growth marketing and insights at Adobe.
“Consumers are feeling a greater impact on their wallets, with consistently high levels of online inflation in categories such as groceries and pet products,” Brown said. But, he said, “sustained demand shows consumers are embracing the convenience of online shopping, especially for growing categories like groceries.”
Adobe started reporting inflation online after its analysts found that online prices, which had always fallen due to competition, had started to rise every month. Adobe has reported 22 consecutive months of inflation online, starting in June 2020.
Apparel posted the strongest year-over-year price increases in March among the 18 categories tracked by the Adobe Digital Economy Index, up 16.3% from March 2021. Product prices food increased by 7% year-on-year.
Fourteen of the 18 categories tracked by Adobe recorded year-over-year price increases in March. The four categories where prices were lower than in March 2021 were electronics, jewelry, toys and computers.
Price increases are accelerating in the pet category, Adobe reported, with prices up 7% year-over-year in March, compared to 5.6% in February and 4.7% in January. The increase in demand caused by the surge in pet adoptions during the pandemic has contributed to these price increases. During the 2021 holiday season, online sales of pet products increased 63% from pre-season levels, Adobe reported.
Tools and home improvement, another category that has seen demand rise during the pandemic, saw prices increase year-over-year for the 16th month in a row, with prices up 8 .5% in March compared to March 2021.
The Adobe Digital Economy Index is based on Adobe Analytics data collected from over one trillion visits to US e-commerce sites.