Once again, the holiday season is upon us. For retailers and other businesses, this Friday, also known as Black Friday (or, Nasty Friday, as our British friends refer to it) marks the beginning of a seasoned of heightened sales that will last through the New Year.
It certainly starts with a bang. It's hard not to notice that businesses have vociferously attached themselves to the Black Friday concept, especially in the past 5 years or so. But it isn't just brick-and-mortar stores that are getting in on the holiday action, and the frenzied consumerism it brings. Perhaps now more than ever before, online retailers are cutting into the pie for their own piece, and it's a big one. The fact is, in this digital age, many people have taken to their computers for most if not all of their product purchasing needs.
It's rather a conundrum, because it seems that the very thing that stores hope to create- a rush of customers flooding through the doors on Friday- is the same thing that keeps many people doing their shopping behind their computer screens. This sub-group of course, is somewhat offset by the sort of shopper that will go to all the big sales, just to price items that they will then attempt to find cheaper online. With todays smartphone technology, they don't even have to leave the store to make their comparison. However the trend toward internet shopping is undeniable.
So what this tells us, is that while the tradition of Black Friday is still very much alive, the face of it seems to be changing as the face of the American consumer changes, and the technology we use to interact with the world seems to be a driving force toward this change.
It wouldn't come as any kind of shock to learn that online retailers could soon become the main beneficiaries of all the Black Friday hype. So when considering which stocks could get a boost from the holiday shopping season, one might consider which has the most thriving online business. It's worthwhile to mention that profit margins through the holidays have historically appeared flat when compared to other times of the year, because retailers engage at clever pricing tactics at the manufacturer-level. They don't lose money by offering these "sales", but what they do hope to gain is a much higher *volume* on those sales.
Amazon.com Inc. (NASDAQ:AMZN) is the largest online retailer on Earth, so it stands to reason that this should be among the first considerations. Their holiday tagline for this year is "Black Friday Deals Week. Big savings, no waiting." Clearly they have the same thought process on the whole shifting of Black Friday culture to the digital realm, and the benefit it provides shoppers.
You also have another absolute giant in Wal-Mart Stores Inc. (NYSE:WMT) which of course has a thriving (bordering on monolpolistic) real-world business to match its humungous online operation. Other, perhaps lesser, examples of dual-front companies include Best Buy, Target, Sears and more. When all is said and done, it will be interesting to see which of these companies reports the highest holilday season earnings.
Check back often for more articles, news, insights, tips, and picks, right here at Bull in Advantage. Be sure to SIGN UP FOR OUR DAILY REPORTS, and stay up to date on everything that catches our interest. Happy Trading to All, and Good Luck out there!