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New approach to data analysis detects Brexit effect on online sales

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A Brexit effect on online sales is clearly visible through new approaches to data and digital pricing, says Adobe.

Its first UK Digital Price Index suggests that online sales of durable goods, such as computers, and TVs, fell by 10%, compared to the same time last year, in August, while at the same time, sales rose by 30.2% in the US. Before the result of the European Union Referendum, UK online sales had been up by 33% in May and 28% in June. In July that growth slowed to 16% – when US demand grew by 33.7% – before turning negative in August. This, said Adobe, was “likely due to Brexit and other factors driving uncertainty in Europe.”

Prices continued to fall over the period, with the UK cost of computers down by 13.4% in August, on the previous year, and groceries down by 2.7%. The cost of travelling also fell, with London hotel prices down by 16% in August, compared to the previous year, and by 0.8% compared to the previous month.

“There has been little good, micro-level data on the real economy in the UK to help us understand the impact of the Brexit vote,” said Austan Goolsbee, professor of economics, at The University of Chicago’s Booth School of Business and former chairman of the Council of Economic Advisers for President Obama. “The Adobe DPI data suggest that prices for groceries and electronics did not change significantly. It will be important to keep monitoring the data in the months ahead.”

In coming months Adobe will be working with the UK government’s Office for National Statistics (ONS) to analyse data around inflation and online sales in the UK and the US.

“New data sources such as those being used by Adobe provide innovative ways to understand our increasingly digital economy in real time,” said Jonathan Athow, deputy national statistician, UK Office for National Statistics. “Many of these opportunities will be realised by bringing together independent, official statisticians and others in the UK and across the world who are using these new data sources and techniques.”

“We may be seeing early signs of hesitancy in spending on durable goods in the UK, whereas spending remains stable for essential goods like groceries,” said Mickey Mericle, vice president, marketing and customer insights at Adobe. “It will take time to fully grasp Brexit’s effect on the economy and as we expand the UK data we’re incorporating in the DPI, we expect to uncover more trends. We are also excited to start working with government agencies like the ONS to further refine the methodology and surface more insights.”

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