![]() ![]() The evolution of the different categories on the Digital Shelf is, however, variable. How does inflation impacts shoppers across the different categories on the Digital Shelf? This is an important element for retailers to bear in mind: a well thought-out discount or promotion can have an even greater impact at a time of stressed prices. However, if inflation continues to rise as expected, distribution costs will also rise and will hit the pockets of households that have not been hit so far.Ī logical trend in middle and low-income households is the search for cheaper or private label products, generally offered at lower prices. So in principle they should feel the impact of the price hike less. ![]() We have to bear in mind that the average online shopper has a high purchasing power. However, the real impact of this price increase on the digital shelf varies greatly depending on the level of household income. ![]() After the explosion of e-commerce in sectors such as grocery during the pandemic - online sales of these products in the US increased by 43% in 2020, according to the United States Census Bureau - a high percentage of consumers are returning to old consumer habits.Īs mentioned above, inflation implies a reduction in the purchasing power of buyers. One of these habits is a gradual return of shoppers to physical shops. This forces us to be cautious: it is still too early to draw clear conclusions about how much weight each of these factors has had on the changes in shoppers' habits. The lifting of social restrictions and the general rise in prices have occurred in parallel in recent months. The answer to this question is not simple and requires us to consider several factors. One question many online retailers are asking themselves today is how the current inflation is affecting conversion in the digital shopper. We are therefore facing a new scenario that is difficult to predict. In fact, in recent years, prices in e-commerce have been falling continuously - a phenomenon known as deflation. It should be noted that e-commerce inflation is somewhat of a novelty. The conflict has caused an energy crisis in European countries and other regions of the world, increasing the costs of production and distribution of goods. The main problems come from maritime trade, where the cost of sea transport has skyrocketed, due to the shortage of available containers.Īnother decisive factor in understanding the inflation problem is the war in Ukraine. The imbalance against available supply was exacerbated because many suppliers of raw materials or essential parts to assemble other goods - such as microchips - were unable to operate at full capacity for months.Īs a result, supply cycles have lengthened considerably since the pandemic. In addition, social isolation measures made it difficult for businesses and retailers to meet this demand, leading to the dreaded out-of-stock situation for many online retailers. The growth in demand for online products following the outbreak of the pandemic had a direct impact on supply chains, which came under unprecedented pressure. By 2023, prices are expected to continue to rise, albeit at a slower pace (+6.5%).Īlthough recent price developments vary across regions and industries, the causes of inflation generally have common origins. The rate at which prices have been rising - inflation - has now cooled for six straight months. Another way of defining it is as a loss of purchasing power for buyers over the same period. ![]() Simply put, inflation is the increase in prices of a group of products over a continuous period of time. Inflation in almost all economic sectors and markets is affecting how consumers shop online and the reality of e-commerce in recent months, a sector in constant transformation -even more so after the Covid-19 shock. The digital shelf is no stranger to the evolving global economy. The inflation problem: how did we get here? ![]()
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