As we step into the new year, gaining insights into the intricacies of inflation becomes more critical than ever.
Inflation plays a pivotal role in shaping individual purchasing power, essentially influencing our ability to buy and spend. It serves as a metric that propels the prices of goods and services upward over time, impacting buyers and their personal finances.
The ripple effect of inflation is keenly felt, compelling individuals to reassess their spending patterns and purchasing behaviours.
We aimed to uncover the road prices have been taking in 2023 and what effect did this have on its popularity and visibility! To shed light on these intricacies, our team conducted a thorough analysis, focusing on the electronics category from July to December 2023.
If you are interested in insights from this category, read our analysis on Amazon Electronics prices during the Amazon festive season!
Methodology:
Website: Amazon
Category: Electronics
Analysis:
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Price fluctuations between July to December 2023
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Impact of Price hikes on the ranking of the product
Total SKU count = 10000+
Sub Categories taken into consideration which were
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Fridges
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Juicers
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Water Heaters
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Gastops
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Vacuums
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Smartwatches
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Televisions
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Air conditioners
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Microwave ovens
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Dishwashers
Painting the picture of pricing progression
Our team conducted a thorough analysis of 10 specific subcategories with the objective of identifying which subcategory had the higher number of products that experienced price increases over the past six months.
Here are the results of our findings below.
Observing the trajectory of product prices from December to June, it becomes evident that Air Conditioners (ACs), Dishwashers and Juicers have exhibited a performance surpassing the overall average in terms of price hikes.
Air conditioners were the top category that saw 95.23% i.e. of their products showcasing an upward shift in their prices.
Over this timeframe, a significant number of products within every category consistently experienced an upward surge in prices, reflecting the impact of inflation on the electronics market.
When markets signal hike, some subcategories say higher!
Amazon Price fluctuations represent a fascinating phenomenon, ranging from subtle shifts to more pronounced changes.
Subtle shifts can be misleading, even as minute as decimal changes are considered. Which is why our focus was on pinpointing subcategories that exhibited a noteworthy price shift, surpassing our designated minimum threshold of 3%.
Through our analysis, we identified and highlighted the subcategories where product prices surpassed this threshold, shedding light on those experiencing above-average significant price changes.
Subcategories such as Water Heaters, Vacuums, and Smartwatches surpassed this threshold, where some products experienced price changes reaching up to almost a remarkable 40%!
Water heaters grab the first place with 45% of water heater prices crossing 3% price changes.
Although microwaves have introduced price hikes in their products, they seem to be slim in numbers with 0% of them exceeding this threshold.
This underscores the volatility and substantial fluctuations in these specific markets.
Unlike other categories that showed noticeable price hikes or drops; fridges and microwaves demonstrated a greater resistance to inflationary pressures.
50% of Refrigerators remained stoic in the face of inflation and coming up second, 46% of products under microwave showed no change in their prices since July
Connecting Cause & Effect
Merely decoding prices doesn’t reveal much, but understanding its effect however is what is integral in unravelling the actual effect of pricing. Therefore, we scrutinised the reflection of price hikes on amazon product rankings to understand consumer responses and preferences in the face of inflation.
For the majority of subcategories, our analysis revealed a sensitivity to price changes.
Inflation, with its tendency to erode purchasing power, translates into higher costs for consumers.
Consequently, this often leads to a decline in rankings for various goods and services.
Notable examples here include Vacuums, Juicers and Air conditioners, which experienced a significant fall in rankings as consumers resisted their higher prices.
Unfortunately for Vacuums, 97% of vacuum cleaners performed poorly in terms of ranking.
Followed by Juicers and ACs, who’s prices don’t show popularity amongst its consumers
Gastops: Inflation proof
Now we sought to unveil whether certain subcategories have successfully shielded themselves from the aftermath of inflation.
Our exploration aimed to identify those resilient subcategories that managed to protect its rankings from the adverse effects of rising prices.”
Remarkably, Gastops emerged as an exception amidst the general trend of price sensitivity. Despite experiencing price hikes, Gastops not only retained but even increased in popularity.
This anomaly could be attributed to a rise in purchasing power and the inelastic demand that exists for gas.
When consumers are unwavering in their demand, price fluctuations become secondary, resulting in a rise in rankings regardless of price increases.
However, a shield cannot hold out long against the market.
Santa’s out to get you!
We scouted a very interesting pattern. We noticed amongst those products which experienced price hikes, a lot of products showed a similar trend. And what’s interesting is this pattern was showcased the most under the subcategory of gas stoves itself!
The ascent in rankings persisted until the end of November, maintaining momentum even into the initial half of December.
However, the narrative takes a sudden turn towards the end of December where their rankings experienced a decline.
Remarkably, this distinctive trend was most pronounced in the realm of gas stoves showcasing the profound impact of festive seasons on the dynamics of pricing.
This intriguing pattern implies that when the market converges to compete during festive periods, one must remain agile and attuned to the market’s dynamic behaviours. By lending an ear to its cues, one can discern the necessary course of action to thrive in this competitive jungle. Allow BRIO to be your attentive listener, guiding your actions for a prosperous new year!
Book a free demo of our automated retail solutions or contact our optimization experts at info@sciative.com.
To see how brioanalytics.ai can empower your brand, ensuring it not only survives but thrives, visit sciative.com
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