Adobe’s April report for consumer goods prices shows month-over-month (MoM) deflation between 0.2 and 2.4 percent for all categories Adobe is currently tracking with the exception of hotel prices, which increased by 1.6 percent. Between March 2015 and March 2016 prices for TVs, computers, flights, appliances, toys, furniture, bedding, and sporting goods dropped between 2.2 and 19.8 percent. In comparison, the U.S. Bureau of Labor Statistics’ Consumer Price Index (CPI) reported between 1.1 and 16.6 percent price deflation for the same categories and time period. For sporting goods, the DPI showed three times more deflation than the CPI between March 2015 and March 2016 (4.7 versus 1.3 percent). The drop in airfares (0.9 percent MoM; 4.6 percent between April 2015 and April 2016) reveals that savings from lower jet fuel costs are getting passed on to consumers.

1. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 1
ADOBE DIGITAL ECONOMY PROJECT
APRIL 2016

2. OVERVIE
W
Adobe Digital Index background
Basedon analysis ofaggregated and anonymous datafromAdobe MarketingCloud:
• AdobeAnalyticsandAdobeMobile Services
Thousands ofbrands worldwideincluding twothirdsofFortune50 companies relyonAdobe
MarketingCloud:
• $7.50ofevery $10spent online withtop500U.S.retailersgo throughAdobe MarketingCloud **
• Adobe MarketingCloud powers:
• 20ofthetop30U.S.employers
• 9 of10largest hotel groups
• 7of10largest airlines
**LatestIRTop500 Report 2015
Adobe
Analytics
Adobe
MobileServices

3. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 3
Digital Price
Index
(DPI)
JobSeeking
Index
(JSI)
Digital Housing
Index
(DHI)

4. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 4
Main takeaways:April
• 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 April were computers and tablets, with hotels and
international flights as the only categories showing month-over-month inflation
• In categories such as sporting goods, the DPI shows 3x more deflation than the CPI for the last year
• In groceries, prices have decreased for two consecutive months after two months of price increases
• For computers, steep price declines in March and April are almost as big as the ones observed during the 2015 holiday
shopping season
• Overall flight prices decreased significantlyYoY, a strong sign that savings from lower jet fuel prices are being passed on to
consumers -- especially in domestic routes, which saw the highest deflation
• Domestic hotel prices have increasedYoY, a sign that consumers may be taking their savings from flight bookings and
spending on hotel accommodations

5. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 5
Digital Price Index
(DPI)

6. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 6
DIGITAL PRICE INDEX
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 Review of Economics
and others

7. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 7
DIGITAL PRICE INDEX
Methodology
Based 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 April 2014 and
April 2016
BLS: Consumer Price Index Adobe: Digital Price Index
Quantities Sold No Yes
Products/quantities updated Every 4 years Daily
Number of Products 83 thousand (all categories)
2.2 million
(currently covered categories)
Data Collection Frequency Bi-Monthly Daily
Data Availability Monthly Daily
Offline Prices Yes No
Long history Yes No
All categories of spending Yes No
** Latest IR Top 500 Report 2015

8. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 8
DIGITAL PRICE INDEX
• Electronics see an average of 80% of
online spend on new* products**
• 16% of monthly online spend for
groceries on 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
Measuring rapidly shifting consumer preferences

9. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 9
DIGITAL PRICE INDEX
• DPI captures the effect of major discount
holidays like Black Friday and Cyber Monday
because it measures quantities and does so
in real-time
• Lowest prices for TVs in 2015 were
Thanksgiving and Black Friday
• Data demonstrates retailers trying to start
sales earlier – the Sunday and Monday before
Thanksgiving saw low prices
The Importance of detail: Black Friday

10. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 10
• The dataused contains transactions for~300 K productsbetweenApril 2014andApril 2016
• Productsinclude small equipmentand accessories (balls, gloves, uniforms)as well as large
equipmentsuch as treadmills, weightliftingtools etc.
SportingGoods
methodology

11. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 11
DIGITAL PRICE INDEX
Sporting goods see much higher deflation than CPI
* CPI category “Sporting Goods” used for comparison
• Between April 2015 and April 2016, DPI shows
cumulative deflation of 5.5% YoY
• For April, prices decreased 0.7% vs March MoM
• Between March 2015 and March 2016, DPI
shows cumulative deflation of 4.7% YoY
• For the same period, CPI* reported
cumulative deflation of 1.3% YoY

12. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 12
• The dataused contains transactions for~370K flight routesbetween March 2015andApril 2016
• Includesassociatedfees,whereapplicable
Flights
methodology

13. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 13
DIGITAL PRICE INDEX
Flight prices down 4.6% YoY
• Between April 2015 and April 2016, DPI shows
cumulative deflation of 4.6% YoY
• For April, prices decreased 0.9% vs March MoM
• Between March 2015 and March 2016, DPI
shows cumulative deflation of 4.7% YoY
• For the same period, CPI* reported
cumulative deflation of 1.4% YoY
* CPI category “Airline fare” used for comparison

14. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 14
DIGITAL PRICE INDEX
Domestic flight prices down 6.5% YoY
• Between April 2015 and April 2016, DPI shows
cumulative deflation of 6.5% YoY
• For April, prices decreased 1.2% vs March MoM
• Main deflation cities in April were Phoenix,
Dallas, Miami & Los Angeles
• Main inflation cities in April were Seattle,
New York, San Jose & Boston
* No CPI category exists for comparison

15. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 15
DIGITAL PRICE INDEX
International flight prices down 1.7% YoY
• Between April 2015 and April 2016, DPI shows
cumulative deflation of 1.7% YoY
• For April, prices increased 0.5% vs March MoM
• Main inflation cities in April are for London,
Cancun and Shanghai
• Main deflation cities in April were Manila,
Vancouver and Guanajuato (Mexico)
* No CPI category exists for comparison

16. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 16
• The dataused contains transactions for~250K hotelpropertiesbetween March 2015andApril 2016
• Includesassociatedfees,whereapplicable
Hotels
methodology

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DIGITAL PRICE INDEX
Domestic hotel prices increase by 2.8% YoY
* CPI category “Other lodging away from home including hotels and motels” used for
comparison
• Between April 2015 and April 2016, DPI shows
cumulative inflation of 2.8% YoY
• For April, prices increased 1.6% vs March MoM
• Main inflation cities in April are New York,
Chicago, Boston, Seattle & San Francisco
• Main deflation cities in April were Orlando,
Miami, Ft. Lauderdale and Tampa
• Between March 2015 and March 2016, DPI
shows cumulative inflation of 2.9% YoY
• For the same period, CPI* reported
cumulative inflation of 1.1% YoY

18. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 18
DIGITAL PRICE INDEX
International hotel prices increase 2.2% YoY
• Between April 2015 and April 2016, DPI shows
cumulative inflation of 2.2% YoY
• For April, prices increased 1.7% vs March MoM
• Main inflation cities in April are Toronto,
London, Vancouver, Montreal & Paris
• Main deflation cities in April were Cancun,
San Juan, Dubai and Tokyo
* No CPI category exists for comparison

19. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 19
• Our datasetcoversan estimated 30-40% ofall online grocerypurchases.Itcontains transactions for~195kproducts
(2015-2016)and isheavily comprisedofgroceries bought online and picked-up in store
• The percent ofshoppersbuying groceries online issmall,butgrowing by 35%YoY asof February
• The mix ofgroceryproductsbought online isnotthesame asoffline– thetopcategoryforonline shoppingisdrinks
(nonalcoholic),while forofflineshoppingitismeat
• Still, a significant portion of online grocery shopping is dedicated to meats, dairy, fruits and vegetables – more than
50%
• When itcomes toproductswherethere’slittlesubstitution possibleand consumer choice isminimal (likemilk and
eggs), the DPI tracks almost perfectly with theCPI.This is a good indication that prices online match offline prices
well
Groceries
methodology

20. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 20
DIGITAL PRICE INDEX
Online Groceries prices down again
• Between April 2015 and April 2016, DPI shows
cumulative inflation of 0.5% YoY
• For April, prices decreased 0.2% vs March MoM
• Main deflation in April for meats, juices &
nonalcoholic drinks
• Between March 2015 and March 2016, DPI
shows cumulative inflation of 0.5% YoY
• For the same period, CPI* reported
cumulative deflation of 0.5% YoY
* CPI category “Food at Home” used for comparison

21. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 21
• The dataused contains transactions for~173K productsbetweenApril 2014 andApril 2016
• Productsinclude interiorand exteriorfurniture,mattressesand otherbedding products
Furniture and bedding
methodology

22. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 22
DIGITAL PRICE INDEX
Furniture and bedding prices decrease
* CPI category “Furniture and bedding” used for comparison
• Between April 2015 and April 2016, DPI shows
cumulative deflation of 2.8% YoY
• For April, prices decreased 0.5% vs March MoM
• Main deflation items in April are dining sets
• Between March 2015 and March 2016, DPI
shows cumulative deflation of 2.2% YoY
• For the same period, CPI* reported
cumulative deflation of 1.1% YoY

23. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 23
• The dataused contains transactions for~110K productsbetweenApril 2014 andApril 2016
• Productsinclude large appliances such asfridges,ovens,washers,dryersaswell assmaller appliances such as
vacuums, mixers,blenders etc.
Appliances
methodology

24. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 24
DIGITAL PRICE INDEX
Appliances prices not decreasing as fast as electronics
* CPI category “Appliances” used for comparison
• Between April 2015 and April 2016, DPI shows
cumulative deflation of 4.9% YoY
• For April, prices decreased 1.1% vs March MoM
• Main deflation items in April are
refrigerators and washers
• Between March 2015 and March 2016, DPI
shows cumulative deflation of 4.8% YoY
• For the same period, CPI* reported
cumulative deflation of 3.2% YoY

25. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 25
• The dataused contains transactions for~249 K productsbetweenApril 2014andApril 2016
• Productsinclude toys,games aswell asplayground equipment
Toys
methodology

26. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 26
DIGITAL PRICE INDEX
Toys see most deflation since holidays
* CPI category “Toys” used for comparison
• Between April 2015 and April 2016, DPI shows
cumulative deflation of 7.6% YoY
• For April, prices decreased 1.6% vs March MoM
• Between March 2015 and March 2016, DPI
shows cumulative deflation of 5.3% YoY
• For the same period, CPI* reported
cumulative deflation of 7.7% YoY

27. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 27
• The dataused contains transactions for~1MproductsbetweenApril 2014andApril 2016
• Productsspan across dozens ofdifferentcategories such astelevisions, laptops,Blu-ray players,desktops,tablets,
wearables,headphones, video games, printersetc.
Electronics
methodology

28. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 28
DIGITAL PRICE INDEX
Deflation of Electronics continues
• Prices for electronics decreased 9.5% between
April 2015 and April 2016 YoY
• For April, prices decreased 1% vs March MoM
• Main deflation in April happening in
computers, televisions and tablets
* No CPI category exists for comparison

29. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 29
DIGITAL PRICE INDEX
Continued deflation of Televisions
* CPI category “Television” used for comparison
• Between April 2015 and April 2016, DPI shows
cumulative deflation of 19.7% YoY
• For April, prices decreased 1.6% vs March MoM
• Between March 2015 and March 2016, DPI
shows cumulative deflation of 19.8% YoY
• For the same period, CPI* reported
cumulative deflation of 16.6% YoY

30. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 30
DIGITAL PRICE INDEX
Strong deflation in Computers
• Between April 2015 and April 2016, DPI shows
cumulative deflation of 13.9% YoY
• For April, prices decreased 2.1% vs March MoM
• Between March 2015 and March 2016, DPI
shows cumulative deflation of 13.6% YoY
• For the same period, CPI* reported
cumulative deflation of 7.2% YoY
* CPI category “Personal computers and peripheral equipment” used for comparison

31. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 31
DIGITAL PRICE INDEX
Tablet prices declining again
• Between April 2015 and April 2016, DPI shows
cumulative deflation of 20.9% YoY
• For April, prices decreased 2.4% vs March MoM
• This is an important category not specifically
broken out in the CPI

32. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 3
2
Job Seeking Index
(JSI)

33. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 33
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 April 2015 through April 2016.
 Adobe Marketing Cloud powers 20 of the top 30 U.S. employers**

34. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 34
JOB SEEKING INDEX
Online Job Seeking declines
• US online job seeking is down 11.8% YoY in
April
• Government reported March Unemployment
Rate higher at 5.1% (down 8.9% YoY)
• Government reported February
Unemployment Rate 4.9% (down 10.3% YoY)

35. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 3
5
Digital Housing Index
(DHI)

36. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 36
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 April 2015 and April 2016.

37. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 37
DIGITAL HOUSING INDEX
Online housing search growth slows
• Online search for purchases and rentals up
19.1% YoY in April
• NAR reports existing home sales increased
1.7% YoY in March

38. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 38
DIGITAL PRICE INDEX

39. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 39
Appendix
39

40. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 40
DIGITAL PRICE INDEX
Digital Price Index: Fisher Ideal Price Index
𝑖=1
𝑛
𝑃𝑖𝑡 𝑈𝑖𝑡−1
𝑖=1
𝑛
𝑃𝑖𝑡−1 𝑈𝑖𝑡−1
∗ 𝑖=1
𝑛
𝑃𝑖𝑡 𝑈𝑖𝑡
𝑖=1
𝑛
𝑃𝑖𝑡−1 𝑈𝑖𝑡
• 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
consumers preferences for what goods to buy are constant over a certain number of years, it is able
to account for the fact that they are constantly changing what they buy.
𝐹𝑖𝑠ℎ𝑒𝑟 𝜋 𝑡 =

41. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 41
DIGITAL PRICE INDEX
Methodology Comparison: Fisher, Laspeyres and Paasche

42. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 42
DIGITAL PRICE INDEX
Annual Cumulative Inflation Rates

43. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 43
DIGITAL PRICE INDEX
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

44. ADOBE DIGITAL INDEX |Adobe Digital Economy Project 44
DIGITAL PRICE INDEX
Job Seeking Online: Traffic Sources
• Direct traffic to employment-listing websites is
higher than search traffic
• Search ranks second