Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Adobe Digital Price Index - March 2019

2,692 views

Published on

Online Grocery prices have been following a similar pattern as the offline ones, with online prices rising slightly faster over the last 5 years cumulatively. Steel and Aluminum tariffs affected Appliances both online and offline. While the CPI rose after the March 2018 tariff implementation, the DPI showed a tampering in the deflation.
Computers shows a slightly steeper decline in prices online vs offline. For some categories the online and offline worlds are starting to blur into one. The CPI and DPI for TVs is remarkably similar. The online prices for Toys have started to exhibit a slower deflation in the last few years, diverging from the CPI. Sporting Goods show a much quicker deflation online, possibly caused by a quicker product turnover online.

Published in: Economy & Finance
  • Be the first to comment

Adobe Digital Price Index - March 2019

  1. 1. © 2016 Adobe Systems Incorporated. All Rights Reserved. ADOBE DIGITAL PRICE INDEX (UNITED STATES) MARCH 2019 DATA
  2. 2. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved. 2 Digital Price Index Findings (DPI)
  3. 3. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2019 Adobe Inc. All Rights Reserved. Main takeaways 3  Online Grocery prices have been following a similar pattern as the offline ones, with online prices rising slightly faster over the last 5 years cumulatively.  Steel and Aluminum tariffs affected Appliances both online and offline. While the CPI rose after the March 2018 tariff implementation, the DPI showed a tampering in the deflation.  Computers shows a slightly steeper decline in prices online vs offline.  For some categories the online and offline worlds are starting to blur into one. The CPI and DPI for TVs is remarkably similar.  The online prices for Toys have started to exhibit a slower deflation in the last few years, diverging from the CPI.  Sporting Goods show a much quicker deflation online, possibly caused by a quicker product turnover online.
  4. 4. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2019 Adobe Inc. All Rights Reserved. Economist Advisors 4 Austan Goolsbee, University of Chicago  Robert P. Gwinn Professor of Economics at The University of Chicago's Booth School of Business  Formerly served as President Obama’s Chairman of the Council of Economic Advisers  The youngest member of the cabinet of President Obama Pete Klenow, Stanford University  Professor, Department of Economics, Stanford University  Currently Visiting Scholar, Federal Reserve Bank of San Francisco  Member of editorial boards for Econometrica, American Economic Review, Quarterly Journal of Economics and others
  5. 5. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2019 Adobe Inc. All Rights Reserved. Digital Price Index: Fisher Ideal Price Index 𝑖=1 𝑛 𝑃𝑖𝑡 𝑈𝑖𝑡−1 𝑖=1 𝑛 𝑃𝑖𝑡−1 𝑈𝑖𝑡−1 ∗ 𝑖=1 𝑛 𝑃𝑖𝑡 𝑈𝑖𝑡 𝑖=1 𝑛 𝑃𝑖𝑡−1 𝑈𝑖𝑡 • The Fisher Ideal Price Index uses quantities purchased on the current period (month) and a previous period (previous month) to determine actual consumer’s preferences. Instead of assuming that consumers preferences for what goods to buy are constant over a certain number of years, it is able to account for the fact that they are constantly changing what they buy. 𝐹𝑖𝑠ℎ𝑒𝑟 𝜋 𝑡 =
  6. 6. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2019 Adobe Inc. All Rights Reserved. March Digital Price Inflation In the United States 6 • The Adobe Digital Price Index was split evenly between categories that inflated vs those that deflated in price. • YoY Groceries have increased in price by 0.9% online. YoY MoM Appliances 1.4% 1.3% Computers -9.4% -1.7% Electronics -8.8% -1.6% Furniture and bedding -0.7% 0.4% Grocery 0.9% -0.4% Medical equipment and supplies -0.6% -0.1% Nonprescription Drugs 1.0% -0.6% Televisions -17.9% -2.3% Tools & Home Improvement 1.3% 0.1% Toys -6.1% -0.3%
  7. 7. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2019 Adobe Inc. All Rights Reserved. DPI vs CPI for February 7 • February saw directional alignment in online vs offline price changes in all categories except for the noisy Medicinal product categories. • The DPI is a good predictor of the CPI for these categories. DPI CPI Same Sign? Appliances -1.8% -0.5% ✓ Computers -1.2% -1.0.% ✓ Furniture and bedding 1.2% 0.8% ✓ Grocery 0.36% 0.30% ✓ Medical equipment and supplies 0.1% -0.6% Nonprescription Drugs 0.04% -0.7% Televisions -2.2% -1.9% ✓ Tools & Home Improvement 0.2% 1.1% ✓ Toys -0.1% -0.1% ✓
  8. 8. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2019 Adobe Inc. All Rights Reserved. Offline and Online Grocery Prices Follow The Same Trend In The US 8 • The basket mix of groceries that consumers purchase online differs from the online counterpart. Meat has a much bigger impact on the offline (CPI) index • Offline and Online prices show an intimately correlated trend, with the individual monthly indices exhibiting a 0.58 Pearson correlation coefficient • Over the last 5 years, cumulatively online prices have risen faster than offline (3.1% vs 2.5% in February) • Groceries are the biggest contributor of the overall Consumer Price Index out of all the categories the DPI tracks
  9. 9. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2019 Adobe Inc. All Rights Reserved. Appliances Show Price Inflation Online For the First Time This Year 9 • Appliances have historically shown a very similar trend in prices online and offline with a steady decrease in prices over time. • With the introduction of the tariffs on steel and aluminum, offline prices saw steep inflation, while online prices have leveled out for the first time in the history of the Adobe Digital Price Index. • The DPI has the advantage of being able to track quantities within a category. It’s possible that consumers have shifted their purchasing behavior to account for the price changes. TARIFF INTRODUCTION
  10. 10. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2019 Adobe Inc. All Rights Reserved. Computers Deflate Online Slightly Faster than Offline 10 • Electronics have penetrated online shopping faster than almost any other product category. Offline and online are starting to blur when it comes to electronics shopping, especially with the recent introduction of ‘Buy Online, Pick Up in Store’. • Over the long run it seems like the price drops on computer models are still faster and stronger online.
  11. 11. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2019 Adobe Inc. All Rights Reserved. Televisions Show Almost Identical Price Trends Online Vs Offline 11 • As with the computers category, TVs show almost an identical behavior in prices online and offline. Over the course of 5 years the prices have diverged slightly, -59.2% for the CPI vs -63.5% for the DPI in February. • Notably, the DPI shows a much heavier price drop in the month of November, caused by the Black Friday sales.
  12. 12. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2019 Adobe Inc. All Rights Reserved. The Toy Market Is Starting to Diverge Online 12 • From 2014 to the end of 2015 the Toy category followed the same trend online and offline. • Starting roughly in 2016 Toys online have started dropping in price more slowly than offline. • The basket mix of Toys purchased online is contributing to a more level trend in online Toy prices.
  13. 13. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2019 Adobe Inc. All Rights Reserved. Retailers Are Competing For the Void Left by the Exit of Other Big Players of the Category 13 • Last November, the Toy Price Index saw the sharpest decline in the history of the Adobe DPI. • The decline was likely due to the large retailers competing to fill the void and grab the largest market share.
  14. 14. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved. 14 Other Categories (5 year trend) (DPI)
  15. 15. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2019 Adobe Inc. All Rights Reserved. Furniture And Bedding 15 • Furniture and Bedding have shown a 0.4% increase in prices MoM in March. • They’ve seen deflation in price by 11.3% since February 2014 or -2.2% per year on average • YoY they’ve deflated in price by 0.7%
  16. 16. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2019 Adobe Inc. All Rights Reserved. Tools & Home Improvement 16 • Tools & Home Improvement have shown a 0.1% increase in prices MoM in March. • They’ve seen deflation in price by -3.2% since February 2014 or -0.63% per year on average • YoY they’ve inflated in price by 1.3%
  17. 17. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2019 Adobe Inc. All Rights Reserved. Nonprescription Drugs 17 • Nonprescription Drugs have shown a -0.6% decrease in prices MoM in March. • They’ve seen inflation in price by 1.1% since February 2014 or 0.2% per year on average • YoY they’ve inflated in price by 1.0%
  18. 18. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2019 Adobe Inc. All Rights Reserved. Medical equipment and supplies 18 • Medical equipment and supplies have shown a -0.1% decrease in prices MoM in March. • They’ve seen deflation in price by -2.9% since February 2014 or -0.57% per year on average • YoY they’ve deflated in price by -0.6%
  19. 19. © 2016 Adobe Systems Incorporated. All Rights Reserved.

×