The internet has long been a reliable place to get cheap prices on almost anything. In fact, it’s a trademark of Big Tech to relentlessly lower prices. “Consumers have got used to expecting online prices to drop by around 4 percent every year since we’ve had this since 2014,” said Vivek Pandya, senior digital insights manager at Adobe.
No longer. Thanks to the pandemic, supply chain issues and labor shortages, those days are at least temporarily over. Internet prices rose by 2.3 percent in the twelve months to June, says Adobe, and by 0.6 percent in June alone.
Behind these rising prices is also the growing demand. Internet sales rose 77 percent in the twelve months to June, largely because people spent more time at home and less time in brick and mortar stores. “This is pretty significant growth in the online ecosystem, and it’s translating into price inflation,” says Pandya.
It’s a big world, and not everything has risen in price in the past 12 months. For example, electronics costs are down 2.5 percent – compared to an average decrease of 9.1 percent from 2015 to 2019. Here are some of the biggest online price increases in the past 12 months.
1. Clothing (+16.2 percent)
This reliably inexpensive category recorded an average price decrease of 1.1 percent per year from 2015 to 2019. Why the price increase? For one, the demand for new clothing fainted in June 2020. You probably didn’t buy many suits, ties, or other office wear back then: the nation was deep in lockdown and you can only have so many sweatpants. However, a year later, companies made plans to reintegrate employees into the workforce, and demand rose. At the same time, the manufacturing and shipping costs also increased.
2. Non-prescription drugs (+4.0 percent)
Some of the hallmarks of COVID-19 include a fever, aching limbs, sore throat, and headache – all of which can make you reach for aspirin or other over-the-counter pain relievers. The rush for ibuprofen, for example, has spiked demand, while supply chain issues have led to a shortage of raw materials from China and India.
3. Sporting goods (+3.5 percent)
As the reality emerged that the pandemic was not going to pass quickly, more people turned to the relative safety of outdoor activities and exercise – and that drove up demand for items like sneakers. Wolverine Worldwide, maker of Saucony running shoes, cited rising raw material prices for increased shoe prices. And Lauren Hobart, CEO of Dick’s Sporting Goods, identified supply chain issues as a constant concern.
4. Household appliances (+2.3 percent)
You may have noticed one thing during the pandemic: Your washing machine, dryer and dishwasher are being used above average these days. This is of course because you are more at home. And that also means these devices wear out faster and replacements are harder to find. Even if you shop online, you will find that it is more difficult to get the devices you want. According to a February survey by the National Association of Homebuilders, 90 percent of respondents said they had a hard time getting the equipment they wanted. One reason – aside from demand – is that today’s devices are crammed with computer chips that are in short supply.