Americans would save $2.2 billion if they did all their shopping online
The purchasing power of one dollar is worth more online, according to software company Adobe’s Digital Price Index, which looked at online and offline spending. If consumers had shifted all of their offline spending last year to online, that difference would have meant saving about $ 2.2 billion, it estimated. Apparel, furniture and jewelry are all experiencing deflation faster online than offline, according to the Bureau of Labor Statistics Consumer Price Index. That trend is expected to continue as the holidays get closer, said Taylor Schreiner, director of Adobe Digital Insights.
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Of course, online prices aren’t always better than those in brick-and-mortar stores. Alberto Cavallo, an associate professor of applied economics in the Sloan School of Management at Massachusetts Institute of Technology, conducted a comparison of prices from retailers with an online and offline presence in 10 countries, using crowdsourcing platforms and data scraping.
He concluded that online and offline prices were the same 72% of the time, especially in apparel and electronics. (They were the same 69% of the time in the U.S.) The study didn’t include online-only retailers like Amazon and eBay, EBAY, -0.58% but showed that — at least with big-box stores like Target TGT, -1.97% and Walmart, WMT, -1.55% — consumers shouldn’t worry too much about a big price difference online versus offline.
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But an increase in purchasing power online is driven by more frequent online sales that can respond quicker to supply and demand — especially around electronics and toys — the ability for consumers to comparison shop online, as well as increasing competition among increasing number of online vendors, Schreiner said. “Online prices tend to drop even faster than offline tend to around the holiday season,” he added.
Still, more shoppers are moving online. During the 2016 holiday season, online sales rose 11% year-on-year to nearly $ 92 billion, according to Adobe, and Black Friday and Thanksgiving online shopping passed offline shopping for the first time last year (by $ 5 billion). And more shoppers (82%) expect to buy gifts online this year than in physical stores (76%), according to an August survey of more than 1,000 American adult internet users by Fung Global Retail Technology.