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Adobe Data Shows U.K. Retail Sales Drop Following Brexit

 
Friday, September 23, 2016 5:00 am EDT
 
Online Pricing Data for August Shows Continued Deflation in the U.K. and U.S.; Adobe Also Collaborates with U.K.’s Office for National Statistics (ONS)
 

Dateline:

SAN JOSE, Calif.
 
 

Public Company Information:

NASDAQ:
ADBE
 
"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."
 
SAN JOSE, Calif.--(BUSINESS WIRE)--Adobe (Nasdaq:ADBE) today announced the release of its monthly Digital Price Index (DPI) for August. For the first time, Adobe released online sales and pricing data for TVs, computers and groceries in the U.K. Prices across categories declined and online sales for durable goods like computers and TVs dropped sharply Year-over-Year (YoY). While demand in both categories was up in May and June YoY - 33.0 and 28.0 percent respectively - growth in July slowed to 16.0 percent and turned negative in August with a 10.0 percent YoY decrease in sales, likely due to Brexit and other factors driving uncertainty in Europe. Demand in the U.S. in the same categories saw strong growth in July and August with 33.7 and 30.2 percent increases, respectively.

As they did in the U.S., prices in the U.K. continued to decline. The DPI shows 13.4 and 2.7 percent deflation YoY for computers and groceries respectively, while TVs saw minor deflation at 0.5 percent YoY. Additionally, London flights and hotel prices increased slightly and showed signs of stabilization, but remained much lower than last year. Following two months of consecutive deflation after the Brexit referendum, London airfares rose 3.1 percent Month-over-Month (MoM) and are down by 1.0 percent YoY. Hotel prices in London declined a nominal 0.8 percent MoM, but are down 16.0 percent YoY.

DPI data across specific product categories indicates connected economies in which prices rise and fall. TVs, computers and other durable goods saw a 60.0 percent correlation between prices in the U.K. and U.S. Non-durable goods like groceries, which rely much less on imports, saw less correlation (20.0 percent) between both countries. Adobe is collaborating with the Office for National Statistics (ONS) as part of its effort to develop a global methodology for the DPI.

Adobe leverages machine learning in Adobe Marketing Cloud to surface economic insights from billions of data points. By tracking seven dollars and fifty cents out of every ten dollars spent online with the top 500 U.S. retailers* and over six dollars out of every ten dollars spent online with the top 100 European retailers,** the DPI is able to analyze billions of digital transactions. Adobe is the first company to conduct a digital-centric analysis based on real-time access to price-paid data and actual quantities sold. Unlike other models, Adobe Digital Insights leverages the Fisher Ideal Price method, which uses actual quantities purchased to measure inflation and is recognized by leading economists as the gold standard for the calculation of inflation. To produce the August DPI, Adobe analyzed 15 billion U.S. website visits, 3 billion U.K. website visits and online transactions for over 2.4 million different products.

“There has been little good, micro-level data on the real economy in the U.K. to help us understand the impact of the Brexit vote,” said Austan Goolsbee, professor of economics, 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.”

“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, U.K. Office for National Statistics. “Many of these opportunities will be realised by bringing together independent, official statisticians and others in the U.K. 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 U.K., 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 U.K. 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.”

U.S. Inflation Data

For electronics, nonprescription drugs, flights and hotels, the U.S. saw continued deflation MoM. Appliances and furniture saw seasonal increases MoM - 1.8 percent and 0.2 percent, respectively. This inflation is likely due to increased demand for back-to-school and upcoming Labor Day sales. Grocery prices remained stable after five months of consecutive decline while toys saw price inflation. Pokémon merchandise saw 4.4 percent inflation MoM., after falling 2.9 percent in July. Demand for Pokémon items increased 227.0 percent YoY since the launch of Pokémon Go (July 6 through August 31).

Latest U.S. findings include:

  • Groceries: The DPI reports that prices were stagnant MoM for groceries after five months of deflation, with a 0.9 percent decrease YoY. In July, the DPI saw prices drop 0.8 percent YoY, while the CPI reported a 1.6 percent deflation during the same time period. DPI data covers 20 to 30 percent of online grocery transactions for approximately 195,000 products, and is heavily comprised of groceries purchased online picked up in-store.
  • Toys: In August, prices for toys rose 0.3 percent. The DPI showed U.S. prices dropped 6.0 percent YoY in July, whereas the CPI reported 9.3 percent deflation. Data contains transactions for approximately 249,000 products, including toys, games and playground equipment.
  • Nonprescription Drugs: Prices for nonprescription drugs decreased 0.8 percent MoM. While the CPI reported prices dropped 1.6 percent YoY in July, the DPI saw inflation of 0.1 percent during the same time period. DPI findings are based on transactions of 16,000 products.
  • Electronics: In August, prices for electronics continued to decrease. The DPI reported 0.5 percent deflation MoM and 11.0 percent deflation YoY. The CPI, which does not break out electronics overall, reported that prices fell 7.7 percent for computers and 20.0 percent YoY for TVs in July. For that same time period, the DPI saw 12.8 percent deflation for computers. TV prices dropped 20.2 percent. Data is based on online transactions of one million electronic products.
  • Flights: Domestic airfares decreased 3.4 percent MoM and 6.2 percent YoY. Internationally, prices dropped significantly between July and August at 4.3 percent. Additionally, the DPI shows a 1.2 percent inflation YoY. Data is based on approximately 370,000 flight routes.
  • Hotels: Domestic hotel prices saw 2.1 percent deflation MoM. While the CPI reported no change in prices YoY in July, the DPI saw a 2.2 percent increase during the same time period. Internationally, hotels decreased 2.8 percent YoY. Data is based on approximately 250,000 hotel properties and includes associated fees.
- See more at: http://news.adobe.com/press-release/adobe-data-shows-uk-retail-sales-drop-following-brexit#sthash.oPuSc83W.dpuf

To Get to Mars, Head for the Moon

October 14, 2016

Since the last mission to the moon, half a century ago, space enthusiasts have been talking about a trip to Mars.

President Barack Obama this week reiterated the call for a U.S. mission to Mars that he first proposed in April 2010. He called for a partnership with private sector companies to develop the means to send humans to and from Mars by the 2030s.

But a mission to Mars is fraught with challenges.

A major problem is radiation. Earth is protected from cosmic rays by its magnetic field, but astronauts on a mission that would take many months could suffer major health problems en route as their vehicle is bombarded by radiation.

Another problem is political. Critics in the U.S. Congress want to know why the country should spend billions of dollars to go to Mars if there is no practical reason to do so. Private companies may find some commercial value in a Mars adventure, but skeptics question whether they can achieve their plans without massive funding from the government.

Still another hurdle is the time scale, according to Paul Spudis at the Houston-based Lunar and Planetary Institute.

“Any program where the payoff is 20 to 30 years in the future is, effectively, a dead issue in Congress, he told VOA, “because they do not deal in timescales like that. They deal in timescales from two to 10 years.”

All of these problems with Mars are why some space experts are returning to the idea of using the moon as a first step in accomplishing a long-range plan to get to the red planet.

'Fly me to the moon'

During the administration of President George W. Bush, experts developed a plan to return to the moon to test equipment for a Mars mission. But that plan was later scrapped in favor of a long-term project to go directly to Mars, even though it might take 20 or 30 years to accomplish.

In his recently published book, “The Value of the Moon, How to Explore, Live, and Prosper in Space Using the Moon’s Resources,” Spudis makes the case for a moon base, partly because it is relatively close by and is in continual orbit of earth.

“Effectively, you can get to the moon in a minimal amount of time,” he said, “it is only three days to the moon and three days back.”

What’s more, he argues, previous NASA missions have shown that the moon has useful resources, like frozen water at its poles.

“So, I have energy. I have materials. I can live on the moon. I can make rocket propellant,” he said.

The rocket fuel would come from using electricity from a large array of solar cells to break apart the two elements that make up water.

“By taking the hydrogen and oxygen from cracking the water and disassociating with electricity and then freezing those gases into liquids that is the most powerful chemical propellant we know of,” Spudis said.

Pros and cons

At a recent gathering of scientists and space enthusiasts at Rice University for the “Lost in Space 2016” conference, there was a lot of support for returning to the moon from people like former NASA astronaut Leroy Chiao.

“We can train crews,” he said. “We don’t necessarily want the first crew on Mars to be rookies. We can train crews on the Moon.”

But Michael Lembeck, Board Chairman of U.S. Space, LLC, favors using the moon as a staging base and questions using it as a refueling station for a Mars rocket.

“If we talk about actually making the trip to Mars on chemical propulsion that could be a dead end. We need high-speed transportation,” he said.

But Paul Spudis argues that chemical fuel is well-tested and available. “The fundamental problem with a lot of the advanced propulsion systems, for example, the plasma rockets and nuclear thermal propulsion, is that they require technology that we do not have.”

Lunar demo

Spudis proposes a plan that would use robots to do much of the preliminary work on the moon, starting with tests of the polar water resource.

“The next step, he said, “is to actually land a demonstration experiment, where you show that you can dig up the ice. You can extract it and store it as water. Once that is done, we will have effectively demonstrated all the pieces we need to show that we can go back to the moon to stay.”

But to carry out such a plan either the United States, another country with a space program or a private company would have to commit to the project with a lot of money.

One use of the moon that might prove valuable in the nearer term, according to Spudis is using a base on the moon to place and maintain satellites in orbit in “cislunar” space, that is, the space between the earth and the moon.

He said this could lead to big distributed communication systems that would be far better than anything that exists today. Given the importance satellites for modern life on earth, such use of the moon might prove very cost effective.

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