The spread of COVID-19 throughout the U.S. and Canada has drastically changed the relationship between retailer and consumer. By mid-March, nearly all brick-and-mortar retailers had closed locations or reduced hours, while people stopped congregating in public and began spending more time at home.
Another side-effect of the COVID-19 pandemic? Price changes. Not long after the spread of the virus in the U.S. did retailers begin to adjust prices across many different categories. All the data presented in this article was gathered by Wiser Solutions from major U.S. eCommerce retailer websites between January 19th and April 6th, 2020.
Not All Categories Affected by COVID-19
In total, Wiser reviewed nine categories to analyze the impact of COVID-19 on prices. Those categories are:
- Health & Beauty
- Office Supplies
- Sports & Outdoors
- Home Improvement
Multiple eCommerce retailers were grouped into these categories based on the type of products sold. Then, the prices of those products were reviewed before and after the spread of COVID-19 to surface any possible trends.
Some categories had more drastic price changes than others.
Prices Hold Steady in 5 Categories
Five categories—pets, health & beauty, office supplies, books, and textiles—didn’t show any drastic price changes when comparing the period before the spread of COVID-19 in the U.S. to the period after.
In total, Wiser analyzed 4,642 SKUs in the pets category. The average price was $48.80 while the average price change was only a 0.79 percent decrease. The prices before and after COVID-19 were very similar.
Health & Beauty (0.45%)
The health & beauty category displayed a similar trend to pets, with minimal price changes before and after COVID-19. More than 140,000 SKUs were reviewed with an average price of $46.63. The average price change before and after COVID-19 was only a 0.45 percent increase.
Office Supplies (1.22%)
Another category that experienced very minimal price fluctuations before and after COVID-19 was office supplies. In total, Wiser looked at 18,780 SKUs with an average price of $101.90. The average price change was a 1.22 percent increase when comparing the two periods.
The books category joins the others as one with a relatively stable price through February and March. More than 23,100 SKUs were reviewed. The average price was $20.47 and the average price change was just a 1.51 percent increase.
The same can be said for textiles—there is high confidence that COVID-19 has not impacted prices in this category. Nearly 70,000 SKUs were analyzed here at an average price of $84.34. The average price change was a 1.56 percent increase.
Slight Price Increase in Tires Category
On the other side, one category—tires—experienced a moderate price increase after COVID-19 came to the U.S. that is worth highlighting.
Wiser analyzed more than 223,400 SKUs in the tires category. The average price found was $273.00. The average price change—again, comparing the period before the spread of COVID-19 to the period after—was an increase of 3.18 percent.
Overall, this change was slight, which means that there is only moderate confidence that the price change was because of COVID-19 and not another, unrelated cause.
Major Price Fluctuations Seen in Sports & Outdoors, Electronics, Home Improvement
Based on the Wiser analysis, three categories jumped out as having the biggest price changes as a result of COVID-19. Those three categories were sports & outdoors, electronics, and home improvement.
However, the price changes were not the same: two were major decreases while the other a significant increase.
Sports & Outdoors (-11.50%)
The sports & outdoors category had one of the largest decreases in average price out of the nine categories reviewed by Wiser. Overall, there were 473,822 SKUs analyzed with an average price of $114.90. The average price change before and after COVID-19 was an 11.50 percent decrease.
Furthermore, the electronics category was the category with the largest decrease in average price. The change was a 12.59 percent decrease period-over-period. Wiser looked at 21,292 SKUs with an average price of $379.40.
It is with high confidence that this price decrease is because of COVID-19.
Home Improvement (34.40%)
On the contrary, the home improvement category had the greatest price increases in the period after the spread of COVID-19 in the U.S. The average price change was a 34.40 percent increase, significantly larger than any other price fluctuation in the other eight categories. Wiser looked at more than 201,000 SKUs with an average price of $195.00.
Like with sports & outdoors and electronics, this price increase was outside the upper bound of expected price changes if COVID-19 did not exist, therefore giving us high confidence that the price increase is in response to the spread of the virus.
Price Changes Likely Just Beginning
This data demonstrates that COVID-19 has changed how online retailers price their products. Why is this the case? The virus itself doesn’t necessitate price changes, but changing consumer behavior does. More people shop online and spend more in certain categories while spending less in others. Therefore, prices go up to capitalize on increased demand while prices go down where demand is gone.
The longer COVID-19 exists the more likely we are to see these types of price changes in other categories. Perhaps in the other categories shown here that didn’t have drastic price changes yet, or perhaps other categories not represented in this dataset.
Wiser will continue to monitor the eCommerce pricing landscape to identify trends and better help brands and retailers prepare for the effects of COVID-19.
The contributing writers are Amy Yu, Data Analyst at Wiser Solutions, and Jillian Balassone, Senior Director of Customer Experience at Wiser Solutions.