With soaring inflation, most of us have changed our spending and shopping habits over the past several months.
Smarty, an online shopping browser extension, recently surveyed 1,000 consumers in the U.S. and found that inflation has forced eight in 10 of them to adjust their budgets. Many say they are delaying purchases, such as a new car.
“Inflation is at a record high, and consumers are becoming more aware of how these pricing hikes impact their daily lives,” Vipin Porwal, CEO and founder of Smarty, said in a news release. “It’s clear that the extreme upswing of costs for items has made consumers take a second look at what they’re spending on.”
One bit of advice many people have followed to stretch their shopping dollars: Fill up the pantry when they see sales or find coupons to discount the price of staples they use all the time.
But does that advice extend to other consumer goods, such as electronics? Should you buy extras — a new laptop, smartphone, keyboard or mouse, television — to have in reserve just in case yours goes on the blink? Will the cost be too high to replace it, based on inflation, if you don’t buy now?
Tech Product Prices Are Falling, So Don’t Buy Now
In June, the Consumer Price Index jumped 9.1% for all items over the past 12 months, according to the Bureau of Labor Statistics. The rise was fueled by jumps in food (10.4%), new cars (11.4%) and gasoline (60.6%).
But electronics? Prices in some tech categories dropped from June 2021 to June 2022.
“My recommendation is: If you believe a recession is coming — or is already here — then do not buy tech items now,” said Scott Lieberman, the founder of TouchdownMoney.com who helps businesses select the appropriate technology products and services. “Overall, tech prices will come down as businesses and everyday folks have less money to spend due to increased costs on nearly everything else.”
According to the Consumer Price Index, the price of televisions fell 2.2% year over year, and computers, peripherals and smart home assistants dropped 0.6%. The price of smartphones plummeted 20%.
The Adobe Digital Price Index, which measures inflation in the digital economy, concurred with the BLS assessment that electronics prices have fallen substantially, reporting they dropped by 7.3% in June over the previous 12 months.
So, Lieberman advised consumers to put off tech purchases to hedge against inflation because prices actually are falling.
“Avoid buying technology in advance of when you need it,” he said, “because, as we all know, it gets outdated so quickly.”
Businesses Are an Exception
But what about business owners fulfilling their tech needs? Some technology purchases make sense now not because of inflation as much as supply-chain issues, said Corey Donovan, president of Alta Technologies, which sells refurbished computer servers.
“If companies have IT initiatives planned within 18 months that require data center hardware, they need to start planning and reserving equipment now,” he said. “It’s also advised to set up alternate sourcing channels in case back orders for IT servers and network switches become indefinite.
“When I tune in to quarterly calls from the likes of Cisco, HPE and Dell/EMC, it’s clear there’s no end in sight for the supply backlogs, and we’re hearing from customers facing back orders that stretch out beyond a year.”
Some businesses can’t wait for new orders. They need their tech upgrades now.
“For certain product categories … we have waiting lists of corporate customers queuing up for the next pallet of decommissioned used equipment to hit our docks,” Donovan said. “Some companies are deciding to upgrade existing servers or second-generation gear, rather than wait for backlogged new systems because they just need to get their projects started and we have refurbished equipment sitting on the shelf. IT managers are under considerable stress and have to be nimble right now.”
For home consumers of technology, inflation shouldn’t force you to buy tech equipment before you’re ready to do so. Amazon Prime Day has passed, but Black Friday isn’t too far off, and you’re likely to find some awesome deals then.
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