Ecommerce sites have become contributors to the rise in inflation, opposing a multi-year trend and heralding the prospect of higher prices and lesser discounts on a wide range of products this holiday season.
Online retailers like Amazon have been driving prices down for years, defying traditional rivals to follow. That trend has reversed in the past 15 months, according to a report released Wednesday by Adobe, the software company, which tracks data from billions of online transactions.
“You had this thing that had a deflationary influence,” said Taylor Schreiner, director of Adobe Digital Insights. “Suddenly, it is a cause of inflation rather than mitigating it.
Prices on retail websites in the United States rose 3.3% year-on-year in September, unlike the 2-5% annual declines seen at this point in most previous years.
That is still lower than the 5.4% increase in the U.S. Consumer Price Index in September, but Schreiner said buyers should expect prices to be 9% higher in September. This year’s “Cyber Week”, which begins the Monday following the Thanksgiving holiday in late November.
Schreiner said online shoppers have gotten used to comparable computer prices falling about 9% a year “like clockwork,” for example, but this year they are expected to pay the same price as they did. 2020 for comparable devices.
Some economists see the growth of online retailing as the key to unraveling the mystery of why prices and wages rose more slowly during the decade following the global financial crisis than most policymakers did. ‘had planned.
Adobe’s Digital Economy Index shows that since 2014, prices for groceries in the United States have fallen by 5%, furniture by 11% and electronics by 45%. Austan Goolsbee, former chairman of Barack Obama’s Council of Economic Advisers, and Peter Klenow, professor of economics at Stanford, calculated from Adobe data in 2018 that online price inflation was 1.5 lower. to 2.5 percentage points at the levels shown in the consumer price. index.
Jay Powell, Chairman of the Federal Reserve, told the Senate Banking Committee the same year that an “Amazon effect” may have contributed to low inflation since the financial crisis.
While title prices are expected to remain high, Adobe also predicts that retailers will offer discounts of between 5% and 25% this season, below the historical average range of 10% to 30%.
For consumers, according to Schreiner, “This means we’re entering the holiday season where, on average, things are about 3% (or) 3 1/2% more expensive than they were in October of this year. ‘last year or at the beginning (of) November of last year’.
Tensions in global supply chains have driven up prices for containers, trucking, warehousing and labor, prompting retailers to pass the extra costs on to consumers to defend their margins.
Last week, drugstore chain Walgreens said it was adjusting some of its prices due to inflation. On Monday, the Albertsons supermarket group said it was also taking a close look at its pricing models to balance inflationary pressures and supply chain challenges.
In its report, Adobe said out-of-stock messages were up 172% from the pre-pandemic period in January of last year. Clothing has the highest levels of out-of-stock, followed by sporting goods, baby products, and electronics.
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