More Related Content Similar to Adobe Digital Economy Project – October 2016 (20) Adobe Digital Economy Project – October 20161. © 2016 Adobe Systems Incorporated. All Rights Reserved.
ADOBE DIGITAL ECONOMY PROJECT
OCTOBER 2016 UPDATE
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Main takeaways: October
2
Domestic and international flight prices are up in October from the previous month (1.6 and 1.3% respectively), signaling an end to the summer travel season
and the beginning of holiday travel bookings. While flight prices are up, hotel prices are down 2.3% internationally and 0.7% domestically
Flight prices to the U.K. continue to drop faster than flight prices overall, keeping post-Brexit Britain an attractive destination for travelers, with fares lower in
October than September to London Gatwick (-2.5%) London Heathrow (-1.6%) and Manchester (-2.0%)
In the U.K., groceries showed inflation of (0.24%) MoM while Computer prices stayed stable MoM (-0.04%) and Television prices continued to experience
MoM deflation (-1.69%)
Tablets saw a 3.7 percent decline in prices month-over-month signaling that retailers are discounting tablets more than other electronics in advance of the
holiday season. With new tablets coming out this fall from Samsung, Asus, Microsoft and other manufacturers, retailers are lowering prices on current models
Holiday discounts are starting to appear for toys as well, where prices dropped 1.2% MoM
Televisions (down 1.8% MoM), and electronics in general (down 1.0%) saw strong month-over-month deflation, suggesting that retailers are beginning
discounts for holiday shoppers already
Appliances, generally discounted heavily during Labor Day sales, saw strong inflation between September and October (1.4% MoM)
More categories this month in the DPI show inflation, likely an early indication of inflation increases in advance of the Fed’s likely interest rate hike in
December. Weighted average inflation across categories (excluding groceries) is up 0.1% YoY in October to 0.2%
U.S. results signal a slight uptick in inflation, a strong labor market, and a stable housing market:
Our U.S. Job Seeking Index shows that online job seeking is down at it’s lowest levels (-19.1% YoY) over the past 12 months suggesting that the number of
job seekers continues to decline
Our U.S. Digital Housing Index an increase of 13. 0% YoY in online housing searches, the second lowest YoY increase over the past 12 months
3. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
Adobe Digital Insights Background
Based on analysis ofaggregated 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 Adobe
Marketing Cloud:
• $7.50ofevery $10spent online with top 500 U.S.retailers go through Adobe Marketing Cloud **
• Adobe Marketing Cloud powers:
• 20 ofthe top 30 U.S.employers
• 9 of10largest hotel groups
• 7of10largest airlines
**Latest IR Top 500 Report 2015
3
Adobe
Analytics
Adobe
Mobile Services
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Economist Advisors
4
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
5. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved. 5
Digital Price Index
(DPI)
Job Seeking Index
(JSI)
Digital Housing Index
(DHI)
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Digital Price Index
(DPI)
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Methodology – U.K.
7
Based on analysis of aggregated and anonymous data
• Fisher Ideal Price Index
• $6 of every $10 spent online with top 100 European retailers go through Adobe Marketing Cloud **
• Based on analysis 1 billion website visits and 100k products sold online
ONS: Consumer Price Index Adobe: Digital Price Index
Quantities Sold No Yes
Products/quantities updated Annually Daily
Number of Products 180,000
100k
(currently covered categories)
Data Collection Frequency Monthly Daily
Data Availability Monthly Daily
Offline Prices Yes No
Long history Yes No
All categories of spending Yes No
** Latest IR U.K. Top 500 Report 2015
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Adobe DPI in the United Kingdom
8
• Our Digital Price Index in the U.K. for groceries shows that grocery
prices have deflated by 2.3% YoY in October. Prices increased 0.24%
between September and October, the second biggest increase in food
prices in the U.K over the past 12 months
• For computers, we see YoY deflation of 11.9%. Deflation in this category
continues to slow, as deflation is nearly zero this month at -0.04%,
down from -0.34% in September and -0.77% in October.
• Similarly TV prices in the UK continue to fall; the DPI shows YoY
deflation of 22.7% between October 2015 to October 2016. Prices are
declining faster this month (down 1.69% in October) than they were
between August and September (down 1.34%) suggesting that Brexit
impacts on durables imports have yet to be realized
9. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
Methodology – U.S.
9
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 products sold online
BLS: Consumer Price Index
BEA: Personal Consumption
Expenditures
Adobe: Digital Price Index
Quantities Sold No No Yes
Products/quantities updated Every 2 years Monthly Daily
Number of Products 83 thousand (all categories) 83 thousand (all categories)
2.2 million
(currently covered categories)
Data Collection Frequency Bi-Monthly Monthly Daily
Data Availability Monthly Monthly Daily
Offline Prices Yes Yes No
Long history Yes Yes No
All categories of spending Yes Yes No
Index Type Laspeyeres Fisher Ideal Fisher Ideal
** Latest IR Top 500 Report 2015
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Big data in DPI decreases uncertainty
10
DPI CPI
Appliances 0.15% 0.46%
Airfare 0.08% 0.51%
Computers 0.28% 0.49%
Furniture and bedding 0.07% 0.31%
Grocery 0.10% 0.12%
Hotels: domestic 0.04% 2.30%
Medical equipment and supplies 0.20% 0.39%
Nonprescription Drugs 0.18% 0.47%
Sporting Goods 0.12% 0.31%
Televisions 0.24% 0.60%
Toys 0.25% 0.59%
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Inflation rates by price ranges
11
• Televisions have seen higher-ticket items
deflate faster than lower-ticket items
• In computers, models priced above $1,200
showing the least deflation in the category
• Price bins are determined based on the price the product had when originally
launched (first price).
12. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
The Importance of detail: Black Friday
12
• 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
13. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
Measuring rapidly shifting consumer preferences
13
• Electronics see an average of 77% of online
spend on new* products**
• 17% 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 a SKU)
14. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
September 2016 Recap
14
MoM: August
to September
MoM: August
to September
Difference
(percentage)
Same
Sign?
YoY: Cumulative
September 2015-2016
YoY: Cumulative
September 2015-2016
Difference
(percentage)
Same
Sign?
DPI CPI DPI vs. CPI DPI vs. CPI DPI CPI DPI vs. CPI DPI vs. CPI
Appliances -1.5% -0.3% -1.2% Yes -6.1% -3.7% -2.4% Yes
Computers 1.4% -0.3% 1.7% No -10.2% -7.6% -2.6% Yes
Domestic Hotels -0.3% -2.7% 2.4% Yes 1.0% 3.0% -2.0% Yes
Flights 1.3% -0.2% 1.5% No -3.1% -2.9% -0.2% Yes
Furniture and bedding -0.1% 0.2% -0.3% No -3.4% -3.2% -0.2% Yes
Grocery 0.2% 0.0% 0.2% Yes -1.0% -2.2% 1.2% Yes
Medical equipment and supplies 0.3% -0.7% 1.0% No -0.9% -0.6% -0.3% Yes
Nonprescription Drugs 0.1% 0.8% -0.7% Yes 0.2% -0.5% 0.7% No
Sporting Goods -0.4% -0.3% -0.1% Yes -5.5% -2.2% -3.3% Yes
Televisions -1.0% -3.0% 2.0% Yes -20.8% -21.9% 1.1% Yes
Toys -0.8% -1.4% 0.6% Yes -6.0% -9.0% 3.0% Yes
15. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
October 2016 Summary
15
• Main deflation in September:
• Tablets, international hotels, televisions,
electronics
• Main inflation in September:
• Domestic flights, international flights,
appliances
YoY MoM
Appliances -6.2% 1.4%
Computers -9.9% 0.5%
Electronics -10.9% -1.0%
Flights -2.9% 1.5%
Domestic Flights -5.5% 1.6%
Intl Flights 1.1% 1.3%
Furniture and bedding -3.1% 0.2%
Grocery -0.9% 0.0%
Domestic Hotels 2.9% -0.7%
Intl Hotels -3.4% -2.3%
Medical equipment and supplies -1.0% 0.8%
Nonprescription Drugs -0.1% 0.3%
Sporting Goods -4.9% -0.1%
Tablet -22.5% -3.7%
Televisions -21.9% -1.8%
Toys -6.0% -1.2%
Weighted Average Inflation* -1.7% 0.1%
Weighted Aggregate Inflation, Less Grocery** -3.4% 0. 2%
* Weighted average inflation is calculated using CPI-U relative component weights (2014-
2015) across the shared categories in the DPI and the CPI
** Grocery is a large component of the CPI weights, so changes in grocery prices drive the
majority of weighted average inflation.
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Appliances
16
• Adobe DPI shows cumulative deflation of -6.2% YoY
(October 2015 to October 2016)
• Main YoY price decreases for Appliances priced between
$600 and $1000
• For October 2016, prices increased 1.4% vs September 2016
MoM between $600 and $1000:-6.9 , between $0 and
$200:-3.2
METHODOLOGY:
• The data used contains transactions for ~110 K products
• Products include large appliances such as fridges, ovens, washers, dryers as well as smaller appliances such as vacuums, mixers, blenders etc.
17. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
Airfare
17
• Adobe DPI shows cumulative deflation of -2.9% YoY
(October 2015 to October 2016)
• For October 2016, prices increased 1.5% vs September
2016 MoM
METHODOLOGY:
• The data used contains transactions for ~370 K flight routes
• Includes associated fees, where applicable
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Airfare: domestic
18
• Adobe DPI shows cumulative deflation of -5.5% YoY
(October 2015 to October 2016)
• For October 2016, prices increased 1.6% vs September 2016
MoM
METHODOLOGY:
• The data used contains transactions for ~370 K flight routes
• Includes associated fees, where applicable
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Airfare: international
19
• Adobe DPI shows cumulative inflation of 1.1% YoY (October
2015 to October 2016)
• Flight prices showed continued decline to Europe (-1.9%
MoM) and Oceania (-1.7%)
• Largest price increases were to South America (5.9%
MoM)
• For October 2016, prices increased 1.3% vs September 2016
MoM
METHODOLOGY:
• The data used contains transactions for ~370 K flight routes
• Includes associated fees, where applicable
20. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
Electronics
20
• Adobe DPI shows cumulative deflation of -10.9% YoY
(October 2015 to October 2016)
• Main YoY price decreases for Electronics priced between
$200 and $500
• For October 2016, prices decreased -1.0% vs September
2016 MoM between $200 and $500:-12.5 , between $0 and
$200:-6.0
METHODOLOGY:
• The data used contains transactions for ~1 M products
• Products span across dozens of different categories such as televisions, laptops, Blu-ray players, desktops, tablets, wearables, headphones, video games,printersetc..
21. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
Electronics: computers
21
• Adobe DPI shows cumulative deflation of -9.9% YoY
(October 2015 to October 2016)
• Main YoY price decreases for Computers priced between
$700 and $1200
• For October 2016, prices increased 0.5% vs September 2016
MoM between $700 and $1200:-14.3 , greater than $1600:-
1.3
METHODOLOGY:
• The data used contains transactions for ~1 M products
• Products span across dozens of different categories such as televisions, laptops, Blu-ray players, desktops, tablets, wearables, headphones, video games,printersetc..
22. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
Electronics: televisions
22
• Adobe DPI shows cumulative deflation of -21.9% YoY
(October 2015 to October 2016)
• Main YoY price decreases for Televisions priced greater
than $2000
• For October 2016, prices decreased -1.8% vs September
2016 MoM greater than $2000:-30.6 , between $300 and
$600:-15.8
METHODOLOGY:
• The data used contains transactions for ~1 M products
• Products span across dozens of different categories such as televisions, laptops, Blu-ray players, desktops, tablets, wearables, headphones, video games,printersetc..
23. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
Electronics: tablets
23
• Adobe DPI shows cumulative deflation of -22.5% YoY
(October 2015 to October 2016)
• Main YoY price decreases for Tablets priced between
$550 and $900
• For October 2016, prices decreased -3.7% vs September
2016 MoM between $550 and $900:-25.9 , greater than
$900:-12.7
METHODOLOGY:
• The data used contains transactions for ~1 M products
• Products span across dozens of different categories such as televisions, laptops, Blu-ray players, desktops, tablets, wearables, headphones, video games,printersetc..
24. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
Furniture and Bedding
24
• Adobe DPI shows cumulative deflation of -3.1% YoY
(October 2015 to October 2016)
• Main YoY price decreases for Furniture and bedding
priced between $150 and $250
• For October 2016, prices increased 0.2% vs September 2016
MoM between $150 and $250:-5.0 , greater than $750:-2.1
METHODOLOGY:
• The data used contains transactions for ~173 K products
• Products include interior and exterior furniture, mattresses and other bedding products
25. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
Groceries
25
• Adobe DPI shows cumulative deflation of -0.9% YoY
(October 2015 to October 2016)
• For October 2016, prices increased 0.0% vs September 2016
MoM
METHODOLOGY:
• Our dataset covers an estimated 30-40% of all online grocery purchases. It contains transactions for ~195k products
• 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
26. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
Hotels: domestic
26
METHODOLOGY:
• The data used contains transactions for ~250 K hotel properties
• Includes associated fees, where applicable
• Adobe DPI shows cumulative inflation of 2.9% YoY
(October 2015 to October 2016)
• For October 2016, prices decreased -0.7% vs September
2016 MoM
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Hotels: international
27
METHODOLOGY:
• The data used contains transactions for ~250 K hotel properties
• Includes associated fees, where applicable
• Adobe DPI shows cumulative deflation of -3.4% YoY (October
2015 to October 2016)
• For October 2016, prices decreased -2.3% vs September 2016
MoM
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Medical Equipment and Supplies
28
• Adobe DPI shows cumulative deflation of -1.0% YoY
(October 2015 to October 2016)
• Main YoY price decreases for Medical equipment and
supplies priced between $45 and $135
• Main YoY price increases for Medical equipment and
supplies priced between $0 and $10
• For October 2016, prices increased 0.8% vs September 2016
MoM between $45 and $135:-4.2 , between $0 and $10:0.6
METHODOLOGY:
• The data used contains transactions for 6,000 products
• ” includes supportive and convalescent equipment, dressings and first aid kits, and medical equipment for general use
29. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
Nonprescription drugs
29
• Adobe DPI shows cumulative deflation of -0.1% YoY
(October 2015 to October 2016)
• Main YoY price decreases for Nonprescription Drugs
priced greater than $40
• Main YoY price increases for Nonprescription Drugs
priced between $15 and $25
• For October 2016, prices increased 0.3% vs September 2016
MoM greater than $40:-0.8 , between $15 and $25:0.9
METHODOLOGY:
• The data used contains transactions for 16 K products
• Includes all non-prescription medicines taken by swallowing, applying on your skin (such as topicals), inhaling, as suppositories, or enemas.
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Sporting Goods
30
• Adobe DPI shows cumulative deflation of -4.9% YoY
(October 2015 to October 2016)
• Main YoY price decreases for Sporting Goods priced
between $40 and $100
• For October 2016, prices decreased -0.1% vs September
2016 MoM between $40 and $100:-7.3 , between $0 and
$40:-3.7
METHODOLOGY:
• The data used contains transactions for ~300 K products
• Products include small equipment and accessories (balls, gloves, uniforms) as well as large equipment such as treadmills, weightlifting tools etc.
31. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
Toys
31
• Adobe DPI shows cumulative deflation of -6.0% YoY
(October 2015 to October 2016)
• Main YoY price decreases for Toys priced between $0
and $30
• For October 2016, prices decreased -1.2% vs September
2016 MoM between $0 and $30:-7.7 , greater than $300:-0.3
METHODOLOGY:
• The data used contains transactions for ~249 K products
• Products include toys, games as well as playground equipment
32. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved. 32
Job Seeking Index
(JSI)
33. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
Online job seeking sees steep decline
33
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
• Adobe Marketing Cloud powers 20 of the top 30 U.S. employers**
• US online job seeking is down 19.1 % YoYin October
• This is indicative of a continued decline in job
seekers nationwide and a strong, tightening labor
market
34. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved. 34
Digital Housing Index
(DHI)
35. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
Online housing search growth rises
35
METHODOLOGY:
• Based on analysis of aggregated and anonymous data from more than 2 billion visits to U.S. housing search websites
Online search for purchases and rentals is up 13.0% YoY
in October, revealing a stronger housing market to the
previous fall, though the increase in searches YoY is
down compared to September
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Appendix
36
37. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
Digital Price Index: Fisher Ideal Price Index
∑𝑖𝑖=1
𝑛𝑛
𝑃𝑃𝑖𝑖𝑖𝑖 𝑈𝑈𝑖𝑖𝑖𝑖−1
∑𝑖𝑖=1
𝑛𝑛
𝑃𝑃𝑖𝑖𝑖𝑖−1 𝑈𝑈𝑖𝑖𝑖𝑖−1
∗
∑𝑖𝑖=1
𝑛𝑛
𝑃𝑃𝑖𝑖𝑖𝑖 𝑈𝑈𝑖𝑖𝑖𝑖
∑𝑖𝑖=1
𝑛𝑛
𝑃𝑃𝑖𝑖𝑖𝑖−1 𝑈𝑈𝑖𝑖𝑖𝑖
• 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.
𝐹𝐹𝐹𝐹𝐹𝐹 𝐹𝐹𝐹𝐹𝐹 𝜋𝜋𝑡𝑡 =
38. © 2016 Adobe Systems Incorporated. All Rights Reserved.© 2016 Adobe Systems Incorporated. All Rights Reserved.
Methodology Comparison: Fisher, Laspeyres and Paasche