It may no longer be profitable to shop online, as a new study finds internet prices have risen since the coronavirus hit, reversing a five-year trend that has seen prices fall every year.
Adobe’s digital index for the month of June finds that the prices of 18 popular online categories – from electronics to groceries – rose 2.3% year-over-year. Before the pandemic, prices actually fell 5.2% in June 2019 compared to the previous year.
Over five years, e-commerce prices have fallen by 3.9% on average each year.
Electronics, which has been a staple of online shopping and falling prices, fell 2.5% in June. But, they were down for five years at an average rate of 9.06%.
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Clothing, meanwhile, rose 16.22% in June, compared to a five-year average annual decline of 1.08%. Groceries grew 0.47% in June, slightly less than its five-year annual average of 0.51%.
According to the government, overall consumer prices rose at an annual rate of 5.4% in June, the largest increase in 13 years.
The surge in online prices comes as e-commerce becomes a larger part of the consumer economy, accounting for about $ 1 in $ 5 spent by consumers, up from $ 1 in $ 6 in 2017. Consumers spent 73 , $ 4 billion online in June, up 76.7% pre-pandemic levels.
There is considerable debate as to whether the current spike in inflation is temporary, the result of disruptions caused by the coronavirus, or a reflection of a very strong economy and tight labor markets, which means it could persist.
Austan Goolsbee, a professor of economics at the University of Chicago who chaired President Barack Obama’s Council of Economic Advisers, noted that what people were buying online during the pandemic had changed and these changes in behavior may be. continue in the future.
“The categories people spent money on during the pandemic were really fundamentally different from what they were before the pandemic,” said Goolsbee, who helped Adobe develop its index. “I think a lot of these changes are going to be permanent or at least partly permanent. Measuring the digital economy has become much more important and is really vital to our measurements of prices and the economy.”
Only three categories saw their prices drop year over year in June: office supplies, groceries and computers.
On electronics, where online consumers have seen prices drop dramatically over the years, Adobe Digital Insights senior analyst Vivek Pandya called the price changes “striking because consumers are used to it. that these products are cheaper and better every year “.
“The sustained and increased (rise) in online grocery prices is also notable, as this category has exploded during the pandemic and the increased share of e-commerce shopping carts,” he added.