Straight Up:
Steep increase in online prices reaches unprecedented levels during November, as per Adobe data
Online prices saw a 3.5% bump in November compared to last year, marking the 18th consecutive month of yearly price hikes, according to Adobe's Digital Price Index. This massive spike is the highest since Adobe started tracking in 2014, and apparel prices soared a staggering 17.3%. However, it's not all bad news—monthly prices took a 2% dive because of holiday discounts.
The Scoop:
The ever-present chaos in supply chains is causing a domino effect, pushing costs up for various products. Retail honchos have warned that the mayhem would impact the holiday season, and over half of them (59%) said they plan to hike prices to cover these escalating expenses. Surprisingly, only 36% want to take a hit to their profits to keep prices steady.
Inventory levels are down for many retailers thanks to the shipping and manufacturing chaos, even in apparel which was trying (and often failing) to reduce inventory for strategic reasons. The latest casualty of the supply chain chaos is Gap Inc., whose Old Navy brand has seen a significant hit due to closures in Vietnam. As a result, they posted a net loss for Q3 and are predicting potential sales losses of over half a billion dollars due to inventory shortages.
On the brighter side, some retailers, like Kohl's and DSW, have seen their margins and profits climb in this scarcity-driven environment, as fewer items mean less incentive to discount. The digital sphere, where price transparency and the constant presence of Amazon kept prices low, is no exception.
"Persistent supply chain constraints and relentless consumer demand have fueled record inflation in e-commerce," said Patrick Brown, Adobe's vice president of growth marketing and insights. "However, certain categories such as toys, computers, and sports goods, are still cheaper online compared to brick-and-mortar stores."
But not every category is playing along. Electronic prices are down 0.4%, and toy prices have also recorded a drop of 2.9%. Adobe attributes this unusual deflation in toys to persistent historical trends.
The Lowdown:
The current price trend in apparel is influenced by several factors, including tariffs and supply chain problems. Despite the recent decline in apparel prices, tariffs are generally expected to increase costs for imported items like shoes and sweaters in the future. Companies like Nike have already begun adjusting prices for certain products due to these rising costs.
As the global market evolves, the impact of tariffs and supply chain hurdles will likely continue to shape apparel prices. The apparel industry, valued at $1.84 trillion in 2025, will continue to face these challenges, and digital sales can't totally shield it from these traditional cost pressures.
- The rising inflation, as seen in the 3.5% increase in online prices, has been persistent for 18 consecutive months, according to Adobe's Digital Price Index.
- The holiday season may be impacted by the ongoing chaos in supply chains, with 59% of retail honchos planning to raise prices to cover their escalating expenses.
- Gap Inc.'s Old Navy brand has taken a significant hit due to closures in Vietnam, resulting in a net loss for Q3 and potential sales losses of over half a billion dollars due to inventory shortages.
- Contrasting the overall trend, retailers like Kohl's and DSW have experienced a climb in margins and profits in the scarcity-driven environment, with fewer items meaning less incentive to discount.
- Patrick Brown, Adobe's vice president of growth marketing and insights, stated that persistent supply chain constraints and consumer demand have led to record inflation in e-commerce.
- However, certain categories like toys, computers, and sports goods are still cheaper online compared to physical stores.
- Electronic prices have shown a drop of 0.4%, and toy prices have also recorded a decrease of 2.9%. Adobe attributes this deflation in toys to historical trends.
- The apparel industry, valued at $1.84 trillion in 2025, will continue to grapple with tariffs and supply chain issues, with traditional cost pressures having an impact even on digital sales.
