US online retail prices rose a record 3.5% in November

Online prices in the United States rose 3.5% in November from a year earlier, the biggest gain since software company Adobe Inc. began tracking the digital economy in 2014.

The surge, marking the 18th consecutive monthly increase, is another sign of how widespread inflation has turned out in the country. E-commerce, once the land of discounts – especially during the holiday season – has become a constant source of price hikes amid the pandemic recovery.

11 of the 18 categories Adobe tracked saw their prices increase in November, including clothing, flowers and home improvement tools.

Although online inflation remains lower than the overall price increase in the country, it is gradually increasing.

Nationally, inflation is at its highest level in decades, and government data due Friday is expected to show an increase of 6.8%, based on economists’ forecasts. It would be the biggest gain since the early 1980s.

E-commerce has become increasingly ubiquitous in the era of the pandemic, when Americans trapped at home have become accustomed to ordering everything from their phones or computers. Last month, $ 114 billion was spent online, an increase of 13.6% year-over-year.

The increase in demand has also meant that many online shoppers have been disappointed. The number of out-of-stock messages rose to more than 3 billion last month from 2 billion in October, according to Adobe.

The company tracks more than 100 million products. Clothing prices rose the fastest last month with an annual gain of 17.3%, while electronics and toy prices fell as holiday discounts took effect.

Online retailers have traditionally used discounts and a convenient shopping experience to attract consumers. Competition has helped reduce margins and put downward pressure on prices.

The pandemic has changed this dynamic.

Research by Alberto Cavallo of Harvard University found that a high degree of flexibility – with prices falling due to oversupply and rising due to excess demand – as well as uniform prices from one place to another. to the other can make online prices more sensitive to global shocks, such as changes in gas prices and supply. chain breaks.

“Persistent supply chain constraints and sustainable consumer demand have supported record inflation in e-commerce,” said Patrick Brown, vice president of growth and knowledge marketing at Adobe.

By Alex Tanzi

Learn more:

Why price inflation is trending

BMO Capital Markets Managing Director Simeon Siegal and Intermix CEO Jyothi Rao join BoF to discuss reasons fashion brands are raising prices and cutting discounts and whether the trend will last .

Source link

Anne G. Cash