Online prices in January 2023 fell 1% year over year — the fifth consecutive month of year-over-year declines, according to data from the Adobe Digital Price Index .

Half of the 18 categories Adobe tracks dropped in prices on an annual basis. On a monthly basis, online prices in January rose 1.7% following December, when strong holiday discounts lingered past Cyber Monday.

Sharp drops in electronics and computers were primary drivers of January’s year-over-year price decline.

• Electronics: down 11.9% year over year, up 2.1% month over month
• Computers: down 15.8% year over year, up 2.1% month over month

Consumers also saw prices fall year over year for home goods. Appliances were down 2.5% year over year (up 1.8% month over month). Meanwhile, home/garden products fell 3.5% year over year (up 1.2% month over month). Online prices in both categories have now fallen year over year for three consecutive months.

Sporting goods hit a record year-over-year low, falling 6.4% (up 0.6% month over month), with other notable categories with year-over-year price drops including toys (down 5.5% YoY, up 4.9% MoM), books (down 3% YoY, flat MoM) and jewelry (down 0.9% YoY, up 5.8% MoM).

Falling prices are obviously good news for shoppers. But retailers stand to benefit as well. A Digital Commerce 360 and Bizate Insights survey of 1,060 online shoppers earlier this month showed that lower prices are a major factor in driving conversions.

Online prices for food rose

Not all prices fell, however. Grocery prices were up 12.6% YoY (also up 0.4% MoM), down from December 2022’s 13.5% YoY increase. This marks the fourth consecutive month where YoY price increases for groceries have decelerated from September’s record high, when prices rose 14.3% YoY.

In the tools/home improvement category, prices rose 6.9% YoY (up 0.1% MoM), down from December 2022’s 8.3% YoY increase. Pet product prices rose 10.5% YoY (up 0.8% MoM), down from the 11% YoY increase in December 2022.

“The rising cost of living has made consumers more cautious about discretionary spending, with $72.2 billion spent online in January, a modest increase of 1.7% year-over-year,” Patrick Brown, vice president of growth marketing and insights at Adobe, said in a written statement. “Current demand levels are driving retailers to hold prices down and continue to clear out excess inventory.”

Methodology

Adobe’s Digital Price Index,  powered by Adobe Analytics, analyzes 1 trillion visits to retail sites and over 100 million SKUs across 18 product categories:

• Apparel
• Appliances
• Books
• Computers
• Electronics
• Flowers/related gifts
• Furniture/bedding
• Groceries
• Home/garden
• Jewelry
• Medical equipment/supplies
• Non-prescription drugs
• Office supplies
• Personal care products
• Pet products
• Sporting goods
• Tools/home improvement
• Toys

In January, nine of the DPI’s 18 categories saw YoY price decreases. Flowers/related gifts category fell the most at 21.6% YoY. Personal care, office supplies, furniture/bedding, pet products, groceries, non-prescription drugs, tools/home improvement, medical equipment/supplies and apparel had YoY price increases.

Adobe’s DPI is modeled after the Consumer Price Index (CPI), which the U.S. Bureau of Labor Statistics publishes, and uses the Fisher Price Index to track online prices. The Fisher Price Index uses quantities of matched products purchased in the current and prior month to calculate price changes.

Adobe Analytics is part of Adobe Experience Cloud, which is more than 85% of the retailers in the Digital Commerce 360 Top 1000 use.

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