Higher online prices, particularly in apparel and grocery, cost Americans $2.8 billion in March, according to the latest Adobe Digital Economy Index report, released today.
Consumers still spent robustly, despite higher prices and 3.1 billion out of stock messages in March. Online spending was $83.1 billion in March, over $16 billion more than the $67 billion U.S. shoppers spent online in February.
Adobe attributes $2.8 billion of that additional spending in March to inflation. “Consumers paid $2.8 billion more for the same amount of goods,” as a result of rising costs, Adobe reported.
Compared to March, 2021, e-commerce spending was up 7% on a year-over-year basis. The strong growth this March compared to a year ago was particularly significant, Adobe reported, because in March, 2021 a second round of stimulus checks helped drive a record $77.7 billion in spending that month, a year-over-year jump of 48.7%.
While consumers are noticing higher online prices, it isn’t causing them to give up the convenience of online shopping, Patrick Brown, vice president of growth marketing and insights at Adobe, said.
“Consumers are feeling a greater hit to their pocketbooks, with consistently high levels of online inflation in categories such as groceries and pet products,” Brown said. But, he said, “durable demand shows that consumers are embracing the convenience of online shopping, particularly for growing categories like groceries.”
Adobe began reporting on online inflation after its analysts saw that online prices, which historically decreased consistently due to competition, had begun to increase every month. Adobe has reported 22 consecutive months of online inflation, beginning in June 2020.
Apparel showed the steepest year-over-year price increases in March of the 18 categories tracked by the Adobe Digital Economy Index, up 16.3% over March 2021. Grocery prices were up 7% year-over-year.
Fourteen of the 18 categories tracked by Adobe had year-over-year price increases in March. The four categories where prices were lower than 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. Increased demand caused by the surge in pet adoptions during the pandemic has contributed to those price hikes. During the 2021 holiday season, online sales for pet products were up 63% compared to pre-season levels, Adobe reported.
Tools and home improvement, another category that saw demand spike during the pandemic, saw year-over-year price increases for the 16th consecutive month, 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 0ne trillion visits to U.S. e-commerce sites.