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The prices of some products are finally coming down despite inflation – but you’ll have to shop online to find them

Online shopping is finally getting cheaper after two years of steady price increases in the US in the grip of record-high inflation. But the catch is that you have to buy electronics or clothes to see the price cut.

E-commerce entered deflation in July, meaning prices trended downward for the first time in 25 months, according to the latest Adobe Digital Price Index. Online prices were down 1% from last year, after a 0.3% year-over-year increase in June and a 2% rise in May.

The decrease in online prices was due to price declines in electronics, toys and apparel. The largest category in online shopping, electronics — which will account for one-fifth of online spending in 2021 — saw a 9.3% drop in prices in July compared to last year. That was a 7.3% year-over-year decline in June. Apparel prices fell in July with a 1% decline compared to last year.

Electronics are becoming less expensive online for a variety of reasons, Patrick Brown, Adobe’s vice president of growth marketing and insights, said in the report.

“A pullback in consumer confidence and spending, coupled with oversupply for some retailers, is driving down prices in key online categories such as electronics and apparel,” Brown said. While food prices continue to rise online and in stores, the falling prices will provide some relief to consumers, he said.

Online food prices were up 13.4% in July from last year and up 1.4% from June.

Cost of living rose 8.5% in July compared to last year. That was slightly lower than the 9.1% annual increase in June, the largest year-over-year increase in more than 40 years. According to the US Bureau of Labor Statistics (BLS), grocery prices rose 13.1% compared to last year.

Shoppers may see further price cuts on apparels in the coming days. Big retailers have recently reported overstocking and said they are considering discounts on items such as clothing to address the problem. The backlog of orders on popular items in the early days of the pandemic caused the overflow.

The recent downward trend in electronics prices is consistent with the long-term pattern behind the pandemic, Kayla Brun, an economic analyst at decision intelligence company Morning Consult, wrote in an email to MarketWatch.

Historically, the prices of electronic devices have decreased over time as technology has advanced and manufacturing has become more efficient, Brune said. But supply chain disruptions and chip shortages reversed that trend in late 2021. Now, with higher inflation in food and gas, Brune said, consumers are focusing their spending on those categories and shifting their focus to purchases that weren’t possible in the early days of the pandemic.

“Our data showed that purchase intentions for a wide range of goods, including electronics, fell over the next year compared to July 2021, but the share of adults planning to book trips and holidays is up from a year ago.,” Brune wrote.

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