Snapshot of the 2013 Holiday Shopper

'Tis the season for holiday shopping, and that means it's time for my annual tradition of walking the malls and counting bags to see which retailers are doing well and which can expect a lump of coal in their stockings. Not only did I visit area malls over the weekend, I also made extra trips over the last few nights to get a better feel. Overall, my findings suggest that the tone of the holiday shopper is far more subdued than it was last year, even though there are signs plastered all over for deals, specials, buy-one-get-one or buy-one-get-one at 40%, 50% or 75% off. One trend that I noticed far more this year than in last years is the greater use of smartphones while shopping, and I saw consumers using them in three distinct ways. The first was to take pictures of items that they were interested in. When I asked a few why, they said, So I can look it up on the Internet later on and get it at a better price. The second use was price comparison shopping right there, either on Amazon.com's (AMZN) or eBay's (EBAY) mobile site, or using apps to find even better prices on the merchandise they were interested in. The third use that I witnessed was shoppers in line to buy products looking for coupons and discount codes on their smartphones from RetailMeNot (SALE), Coupons.com and Valpak. On the basis of my mall walks, who were the big winners? Starbucks (SBUX), Apple (AAPL), Dick's Sporting Goods (DKS), Macy's (M), Nordstorm (JWN) and VF Corp.'s (VFC) The North Face. Who had crickets in their stores? Abercrombie & Fitch (ANF), Pacific Sunwear (PSUN), Ann Taylor (ANN), Coldwater Creek (CWTR) and Talbots (TLB). Who had big discounts? As I have seen every year over the last few during my holiday mall walks, jewelry had the steepest discounts, and that means Zale (ZLC), which also owns the Piercing Pagoda and Gordon's Jeweler's. Over the last several days, I've also attended various holiday parties and get-togethers. While they were all good fun, those events also served to reinforce my views on both Visa (V) and United Parcel Service (UPS). As tends to be the case at such holiday gatherings, we wound up talking about Christmas shopping, and everyone mentioned how much more online shopping they are doing this year. In fact, one person mentioned that she was had bought five items online this year, compared with none last year. That admission was immediately followed by the comment Five? I've bought more than a dozen online this year, and UPS is coming to my house almost daily. As legendary investor Peter Lynch pointed out in his must-read book One Up on Wall Street, we investors have to watch the behavior of those around us. In this case, it seems that Amazon.com will be one of the bigger winners this holiday season. A few weeks ago, I pointed out how that bodes well for United Parcel Service, FedEx (FDX), American Express (AXP), MasterCard (MA) and Visa. Over the last month, all five of those stocks have risen, from a low of 1% to a high of 6.2%, and all have outperformed the S&P 500, which fell 0.5% over the last 30 days. My anecdotal conversation, combined with the showrooming I saw at the D.C.-metro malls, suggests to me that package volume will be getting pretty intense over the coming seven days. FedEx will report its November quarter earnings results today, and Wall Street is anticipating earnings of $1.63 per share on revenue of $11.43 billion. That's up from earnings of $1.39 per share in the year-ago quarter on $11.11 billion in revenue. Margins and earnings per share will benefit from the not only the pickup in seasonal deliveries but also lower gas prices this year compared with last year. With the November results in hand, what I want to hear from the management team, be it in the earnings press release or on the conference call, is its outlook for the December-January time frame. Why January, you might ask? Because that is when returns get made and shoppers are out in droves for the post-Christmas and post-New Year's sales. Think about it -- if you're not happy with your sweater from Amazon, you've got to ship it back, and that means your sweater-induced sourpuss is a win-win for UPS or FedEx investors.

Snapshot of the 2013 Holiday Shopper

The mood is subdued, and many are using smartphones to get the best deals.

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