This commentary, written by Lenore Hawkins and Chris Versace, was originally sent to Growth Seeker subscribers at 07:00 on Nov. 28.
Historically, many would spend Thanksgiving afternoon in either a food-induced coma or watching football -- and in some cases, both. Over the last few years, however, retailers have opened their doors to get a jump start on the holiday shopping season that traditionally kicked off on Black Friday (the day after Thanksgiving). According to the National Retail Federation's (NRF) annual survey conducted by Prosper Insights, an estimated 137.4 million people were planning to shop -- be it in store or online -- from Thursday through Sunday. Per the NRF's findings, on today's Cyber Monday 36% of consumers plan to shop online, vs. 34% last year.
While the final tallies will come in over the next day or so, there is little question concerning how online shopping fared -- a tell-tale sign of our Connected Society investing theme. According to Adobe ADBE and its Digital Insights, which aggregated anonymous data from 17.6 billion visits to retail websites:
- Thanksgiving and Black Friday online sales were $5.27 billion, up 18% from a year earlier and higher than its prior estimate of $5.05 billion;
- Thanksgiving Day online sales tallied $1.93 billion, up 11.5% year over year;
- Black Friday Online Sales hit $3.34 billion, up 21.6% year-over-year an $290 million ahead of the expected $3.05 billion in online sales and its 11.3% year-over-year growth forecast;
- Black Friday was the first day to ever generate over $1.0 billion dollars in online sales from mobile devices, which came in at $2 billion, up 33% over year. As impressive as that statistic is, to us the real eye opener was that mobile accounted for 36% of total Black Friday sales.
By comparison, data from analytics firm RetailNext showed net sales at brick-and-mortar stores fell 5.0% over Thanksgiving and Black Friday, as the number of transactions fell 7.9%. Preliminary data from retail research firm ShopperTrak showed that shopper visits to such stores fell a combined 1% during Thanksgiving and Black Friday when compared with the same days in 2015. This certainly supported the thin traffic that Chris saw Black Friday morning, which he document on Twitter here, here and here.
While some of this may be attributed to more consumers shopping even earlier than usual this holiday season, as the data is proving out one of the big winners from the shift to digital commerce is our Growth Seeker portfolio name Amazon (AMZN) . We see this shift continuing past the holiday shopping season, as Amazon continues to expand both its Prime footprint from a services and geographic perspective. We continue to rate AMZN shares a One with a $975 price target.
During the entire 2016 holiday shopping season, the NRF estimates that holiday sales will increase 3.7% year over year to $630.5 billion. We would note that the forecasted growth rate is slower than last year's 4.1%, but better than 2013's 2.7%. Given the post-election sentiment, we would not be surprised to see the NRF's forecast prove to be conservative; but rest assured, we'll be monitoring the outcome of the pending holiday shopping weekend.
Again, we see Amazon as a prime beneficiary, so much so that we're already starting to feel somewhat bad for the employees of our local United Parcel Service (UPS) ... but not too bad.