I am loosely forecasting a return to full health following marathon coverage of Black Friday/weekend by Wednesday of this week. My self-imposed insanity led to me visit about 150 stores over a four-day span to unearth key trends, tweet and shoot interesting videos. And yes, the 150 mark is a personal record for me, made so by improved planning.
Here are all sorts of thoughts from being in the trenches.
More Going on at Best Buy than a Website Outage
Obviously Best Buy's (BBY) site outage on Friday caught headlines, mainly because it immediately conjured up images of Target's (TGT) data breach. Luckily for Best Buy, the site crashed as a result of an influx of traffic, which in my view suggests the company is taking market share from Amazon (AMZN) (better designed website plus price matching). But, I think the obsessive focus on the company's downed web store overshadowed some interesting things in the physical stores.
Best Buy stores were mobbed with people as soon as the doors opened at 5:00 p.m. ET on Thanksgiving Day and pretty much the entire weekend. Consumers stocked up on door-buster TV deals and mobile phones from Apple (AAPL), Samsung and Google (GOOGL). And underneath all of the focus by consumers on the typical deals found in the circulars was demand for some surprising, pricey merchandise. For instance, new 4K high-definition televisions, which could cost close to $8,000, flew out the door. So did connected home products from Google's recent acquisition Nest. It was also interesting to see Motorola's new smartwatch be out of stock, which I think bodes well for the Apple Watch.
What Worked, and Didn't Work, at Wal-Mart
If you visit enough retail stores on Black Thursday and Black Friday, certain trends just seem to emerge. What toys are consistently sold out? What is the hot apparel item? Why isn't that supposedly hot doorbuster item not sold out for the next two weeks? By piecing the trends together, an investor could gain great insight into potential investments, and those investments to avoid. Barbie, a business owned by Mattel (MAT), was consistently stuffed on Wal-Mart (WMT) and Target shelves. The product was just not moving and that is a disturbing sign for the quarter from the company. On the other hand, Ninja Turtle figurines and apparel were hot sellers. Nickelodeon, the name behind Ninja Turtles, is owned by MTV Networks, which is owned by Viacom (VIA.B).
Other Sights & Sounds
- Sears (SHLD) and Kmart will have ugly holiday quarters. Way too much excess inventory in key holiday categories by the end of the weekend.
- Toys R Us is in big trouble. Prices on toys are simply under pressure due to online stores and a shift in what defines a children's toy.
- Web store infrastructure not equipped to handle ship-from-store initiatives and more mobile shopping, as underscored by Best Buy's site outage. I wouldn't be surprised if we get more site outages before the season is done.
- Good to see stocked shelves at Wal-Mart, finally. And, it was good to see tidy-looking stores the day after Black Friday. I am no Wal-Mart fan, but stocked shelves is something I will be monitoring moving forward as it could lead to same-store sales improvements.
- Over time, I think it will be proven that Apple stole its Beats acquisition. Holiday deals on Beats is putting the product into the hands of Main Street and giving Apple a chance to upsell as new models roll out (as it does for the iPhone, etc.)
- Wal-Mart electronics section not structurally set up to handle 4K TV demand or customer service on how this technology could be connected to a smartphone, tablet, etc.
- I Like the increasingly new look of Target stores, specifically new shops in the electronics section.
- Coach (COH) has fundamental problems. Basically it is new bags from a new designer or still pretty lame. Winner: Michael Kors (KORS).
- Nike (NKE) over Under Armour (UA). Nike had better placement and assortments in Dick's Sporting Goods (DKS) and Macy's (M).
- 10. Kohl's (KSS) has a poor start to holiday season, I don't care what a few analysts have said after visiting two stores on Black Friday. I know what I saw: unsold inventory in a good bit of store visits.
- 11. People may have saved up two years to splurge as they did in the past four days.