Report: Adobe Digital Economy Project May 2016
Transcript of Report: Adobe Digital Economy Project May 2016
OVERVIEW
Adobe Digital Index background
Based on analysis of aggregated and anonymous data from Adobe Marketing Cloud:• Adobe Analytics and Adobe Mobile Services
Thousands of brands worldwide including two thirds of Fortune 50 companies rely on AdobeMarketing Cloud:• $7.50 of every $10spent online with top 500 U.S. retailers go through Adobe Marketing Cloud **• Adobe Marketing Cloud powers:
• 20 of the top 30 U.S.employers• 9 of 10largest hotel groups• 7of 10largest airlines
**Latest IR Top 500 Report 2015
AdobeAnalytics
AdobeMobile Services
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Digital Price Index(DPI)
Job Seeking Index(JSI)
Digital Housing Index(DHI)
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Main takeaways: May
• Our Digital Price Index (DPI) shows strong signs of deflation in the goods and services we currently cover that are bought online
• Categories showing the most month-over-month deflation in May were tablets, televisions and appliances, with hotels and flightsshowing month-over-month inflation mainly due to seasonality.
• The only covered category showing inflation in May is toys, with toys priced below $70 showing the most price increases
• In groceries, prices have decreased for three consecutive months
• For computers, we see that in May prices seem to have stabilized after two months of steep declines, with high-end computersshowing the least deflation
• Our Job Seeking Index showed signs that job seeking activity is increasing relative to recent months
• Our Digital Housing Index had the lowest YoY growth in the last 9 months
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Economist Advisors
Austan Goolsbee, University of Chicago Robert P. Gwinn Professor of Economics at The University of Chicago's Booth School of Business
Formerly served as President Obama’s Chairman of the Council of Economic Advisers
The youngest member of the cabinet of President Obama
Pete Klenow, Stanford University Professor, Department of Economics, Stanford University
Currently Visiting Scholar, Federal Reserve Bank of San Francisco
Member of editorial boards for Econometrica, American Economic Review, Quarterly Journal of Economics and others
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MethodologyBased on analysis of aggregated and anonymous data
• Fisher Ideal Price Index• Adobe measures 80% of all online transactions from top 100 U.S. retailers **• $7.50 of every $10 spent online with top 500 U.S. retailers go through Adobe Marketing Cloud **• Based on analysis of 15 billion website visits and 2.2 million online products sold between May 2014 and May 2016
BLS: Consumer Price Index Adobe: Digital Price IndexQuantities Sold No YesProducts/quantities updated Every 4 years Daily
Number of Products 83 thousand (all categories) 2.2 million (currently covered categories)
Data Collection Frequency Bi-Monthly DailyData Availability Monthly DailyOffline Prices Yes NoLong history Yes NoAll categories of spending Yes No
** Latest IR Top 500 Report 2015
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• Electronics see an average of 80% ofonline spend on new* products**
• 16% of monthly online spend for grocerieson new products
* Products that have been available for 1 year or less** A product is defined as an item for purchase which has an unique identifier (such as a SKU)
Measuring rapidly shifting consumer preferences
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• DPI captures the effect of major discount holidayslike Black Friday and Cyber Monday because itmeasures quantities and does so in real-time
• Lowest prices for TVs in 2015 were Thanksgivingand Black Friday
• Data demonstrates retailers trying to start salesearlier – the Sunday and Monday beforeThanksgiving saw low prices
The Importance of detail: Black Friday
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Inflation rates by price bins
• Televisions have seem higher-ticket itemsdeflate faster than lower-ticket items
• In computers, models priced above $1,200showing the least deflation in the category
• Price bins are determined based on the price the product had when originallylaunched (first price).
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April 2016 Recap
MoM: April vs March MoM: April vs March Difference (percentage) Same Sign? YoY: Cumulative April 2015-2016 YoY: Cumulative April 2015-2016 Difference (percentage) Same Sign?
DPI CPI DPI vs. CPI DPI vs. CPI DPI CPI DPI vs. CPI DPI vs. CPIAppliances -1.1% -0.3% -0.8% Yes -4.9% -3.7% -1.2% YesComputers -2.1% 0.0% -2.1% No -13.9% -7.7% -6.1% YesDomestic Hotels 1.6% -0.8% 2.4% No 2.8% -0.01% 2.8% NoFlights -0.9% 4.3% -5.2% No -4.6% 0.4% -4.9% NoFurniture -0.5% -0.2% -0.3% Yes -2.8% -2.6% -0.3% YesGrocery -0.2% 0.1% -0.3% No 0.5% -0.3% 0.8% NoSporting Goods -0.7% 1.6% -2.3% No -5.5% -0.5% -5.0% YesTelevisions -1.6% -1.8% 0.2% Yes -19.7% -16.1% -3.6% YesToys -1.6% -0.4% -1.2% Yes -7.6% -8.1% 0.5% Yes
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• Main deflation in May:• Tablets, Televisions & Appliances
• Main inflation in May:• Flights, Hotels & Toys
May 2016 Summary
YoY MoMAppliances -4.5% -1.0%Computers -12.7% -0.4%Electronics -10.3% -1.4%Flights -5.0% 4.1%Flights: domestic -7.1% 4.1%Flights: international -1.7% 3.1%Furniture -3.4% -0.8%Grocery 0.4% -0.2%Hotels: domestic 2.6% 0.7%Hotels: international -0.5% 0.7%Sporting Goods -5.2% -0.4%Tablets -21.5% -3.7%Televisions -18.5% -2.0%Toys -6.5% 0.4%
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• The data used contains transactions for ~110K products between May 2014 and May 2016
• Products include large appliances such as fridges, ovens, washers, dryers as well as smaller appliances such asvacuums, mixers, blenders etc.
Appliancesmethodology
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Appliances prices decreased 4.5% YoY, driven by big appliances
* CPI category “Appliances” used for comparison
• Between May 2015 and May 2016, DPI showscumulative deflation of 4.5% YoY
• For May, prices decreased 1% vs April MoM
• Main deflation items in May are for high-ticketappliances (above $600)
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• The data used contains transactions for ~1M products between May 2014and May 2016
• Products span across dozens of different categories such as televisions, laptops, Blu-ray players, desktops, tablets,wearables, headphones, video games, printers etc.
Electronicsmethodology
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Cameras and smart watch prices decline in May
• Prices for electronics decreased 10.3% between May2015 and May 2016 YoY
• For May, prices decreased 1.4% vs April MoM
• Main deflation in May happening in televisions,tablets, cameras and smart watches
* No CPI category exists for comparison
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Deflation for computers slows in May, driven by high-end market
• Between May 2015 and May 2016, DPI showscumulative deflation of 12.7% YoY
• For May, prices decreased 0.4% vs April MoM
• Main price decreases for computers pricedbetween $700 and $1,200
• Main price increases for high-end computers(priced above $1,200)
* CPI category “Personal computers and peripheral equipment” used for comparison
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High-end televisions drive price decreases in May
* CPI category “Television” used for comparison
• Between May 2015 and May 2016, DPI showscumulative deflation of 18.5% YoY
• For May, prices decreased 2% vs April MoM
• Main price decreases in high-end televisions(above $2,000)
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Tablets see large price decline in May
• Between May 2015 and May 2016, DPI showscumulative deflation of 21.5% YoY
• For May, prices decreased 3.7% vs April MoM
• Main decrease in May for tablets priced between$350 and $550
• This is an important category not specifically brokenout in the CPI
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• The data used contains transactions for ~370 K flight routes between April 2015 and May 2016• Includes associated fees, where applicable
Flightsmethodology
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Flight prices down 5% YoY
• Between May 2015 and May 2016, DPI showscumulative deflation of 5% YoY
• For May, prices increased 4.1% vs April MoM
* CPI category “Airline fare” used for comparison
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Domestic flight prices down 7.1% YoY
• Between May 2015 and May 2016, DPI showscumulative deflation of 7.1% YoY
• For May, prices increased 4.1% vs April MoM
• Main inflation states were Texas, California andFlorida
• Main deflation states were Washington, Georgiaand Hawaii
* No CPI category exists for comparison
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International flight prices down 1.7% YoY
• Between May 2015 and May 2016, DPI showscumulative deflation of 1.7% YoY
• For May, prices increased 3.1% vs April MoM
• Main price increases in May were for NorthAmerican and European destinations
• Main price decreases in May were for Asia
* No CPI category exists for comparison
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• The data used contains transactions for ~173K products between May 2014 and May 2016• Products include interior and exterior furniture, mattresses and other bedding products
Furniture and beddingmethodology
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Furniture and bedding prices decrease, especially for patio
* CPI category “Furniture and bedding” used for comparison
• Between May 2015 and May 2016, DPI showscumulative deflation of 3.4% YoY
• For May, prices decreased 0.8% vs April MoM
• Main deflation items in May are for PatioFurniture
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• Our dataset covers an estimated 30-40% of all online grocery purchases. It contains transactions for ~195k products (2015-2016) and is heavily comprised of groceries bought online and picked-up in store
• The percent of shoppers buying groceries online is small, but growing by 35% YoY as of February• The mix of grocery products bought online is not the same as offline – the top category for online shopping is drinks
(nonalcoholic), while for offline shopping it is meat
• Still, a significant portion of online grocery shopping is dedicated to meats, dairy, fruits and vegetables – more than 50%
• When it comes to products where there’s little substitution possible and consumer choice is minimal (like milk and eggs), theDPI tracks almost perfectly with the CPI. This is a good indication that prices online match offline prices well
Groceriesmethodology
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Online Groceries prices down in May, driven by juices & drinks
• Between May 2015 and May 2016, DPI showscumulative inflation of 0.4% YoY
• For May, prices decreased 0.2% vs April MoM
• Main deflation in May for juices & nonalcoholicdrinks
* CPI category “Food at Home” used for comparison
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• The data used contains transactions for ~250 K hotel properties between April 2015 and May 2016• Includes associated fees, where applicable
Hotelsmethodology
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Domestic hotel prices increase by 2.6% YoY
* CPI category “Other lodging away from home including hotels and motels” used for comparison
• Between May 2015 and May 2016, DPI showscumulative inflation of 2.6% YoY
• For May, prices increased 0.7% vs April MoM
• Main price increases in California, Illinois andWashington
• Main price decreases in Florida, Arizona &Louisiana
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International hotel prices increase 0.7% in May
• Between May 2015 and May 2016, DPI showscumulative deflation of 0.5% YoY
• For May, prices increased 0.7% vs April MoM
• Main price increases for hotels in North Americaand ANZ
• Main price decreases in Asia and South America
* No CPI category exists for comparison
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• The data used contains transactions for ~300 K products between May 2014and May 2016• Products include small equipment and accessories (balls, gloves, uniforms) as well as large
equipment such as treadmills, weightlifting tools etc.
Sporting Goodsmethodology
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Sporting goods
• Between May 2015 and May 2016, DPI showscumulative deflation of 5.2% YoY
• For May, prices decreased 0.4% vs April MoM
• Main deflation in high-ticket sporting goods(above $350)
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• The data used contains transactions for ~249 K products between May 2014and May 2016• Products include toys, games as well as playground equipment
Toysmethodology
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Toys have inflation in May, driven by products below $70
* CPI category “Toys” used for comparison
• Between May 2015 and May 2016, DPI showscumulative deflation of 6.5% YoY
• For May, prices increased 0.4% vs April MoM
• Main price increases for May were for toys pricedbelow $70
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JOB SEEKING INDEX
Methodology
Based on analysis of aggregated and anonymous data from more than 1 billion visits to U.S. employment-search websites and top employer career pages from May 2015 through May 2016. Adobe Marketing Cloud powers 20 of the top 30 U.S. employers**
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Online Job Seeking declines
• US online job seeking is down 8.1% YoY in May
• Government reported May Unemployment Rate at4.5% (down 15.1% YoY), due in large part to acontraction in the labor force
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DIGITAL HOUSING INDEX
Methodology
Based on analysis of aggregated and anonymous data from more than 2 billion visits to U.S. housing search websites between May 2015 and May 2016.
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Online housing search growth slows
• Online search for purchases and rentals up 14.8%YoY in May
• NAR reports existing home sales increased 1.7%YoY in April
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Appendix
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Digital Price Index: Fisher Ideal Price Index
∑𝑖𝑖=1𝑛𝑛 𝑃𝑃𝑖𝑖𝑖𝑖𝑈𝑈𝑖𝑖𝑖𝑖−1∑𝑖𝑖=1𝑛𝑛 𝑃𝑃𝑖𝑖𝑖𝑖−1𝑈𝑈𝑖𝑖𝑖𝑖−1
∗∑𝑖𝑖=1𝑛𝑛 𝑃𝑃𝑖𝑖𝑖𝑖𝑈𝑈𝑖𝑖𝑖𝑖∑𝑖𝑖=1𝑛𝑛 𝑃𝑃𝑖𝑖𝑖𝑖−1𝑈𝑈𝑖𝑖𝑖𝑖
• The Fisher Ideal Price Index uses quantities purchased on the current period (month) and a previous period(previous month) to determine actual consumer’s preferences. Instead of assuming that consumerspreferences for what goods to buy are constant over a certain number of years, it is able to account for the factthat they are constantly changing what they buy.
𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹 𝜋𝜋𝑖𝑖 =
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Methodology Comparison: Fisher, Laspeyres and Paasche
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Annual Cumulative Inflation Rates
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Electronics Deflation in Detail
• The average price paid for an iPad mini (all models) has decreased by about 40% since the iPad mini 1 was introduced in November 2012.
• Although the initial price tag of new models remains constant at around $400, the automatic discount of previous models causes the average price to consistently fall: when the iPad mini 3 was introduced at an average price of $450, the price for the iPad Mini 2 was reduced by 25% to $300.
• This data only includes iPad minis sold in retail websites
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Inflation Rates by Price Bins, May (MoM)
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Inflation Rates by Price Bins, May (MoM) – Cont ’d