A Look at the Official Kick-Off to the 2017 Holiday Shopping Season
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Coming off the Thanksgiving holiday, this week Tematica’s investing mixologists Chris Versace and Lenore Hawkins discuss the meaning of the litany of data points for online shopping on Thanksgiving as well as overall results for Black Friday. Expectations were running high for continued wallet share gains by digital shopping, a key aspect of our Connected Society investing theme, and they did not disappoint. What was surprising was the percentage of holiday shopping done via smartphones.
Both the objective data, and as Chris and Lenore share, the anecdotal evidence, point to brick & mortar retail traffic over the holiday shopping weekend that was hardly robust. Per data from ShopperTrak, brick & mortar retail sales fell just under 2% year over year. No wonder retailers like Kohl’s (KSS) and JC Penney (JCP) were trying to put a positive spin on things by talking up their digital shopping. We continue to see brick & mortar retailers as challenged and remain bearish on mall operators.
While the holiday shopping season is off to a stronger start than last year, we still have some reservations about the final tally matching the National Retail Federation’s typically overly optimistic holiday shopping forecast calling for 3.6%-4.0% growth over last year. On the one hand, we’ve had tepid wage growth, ballooning credit card debt and student debt, which tells us the Cash-Strapped Consumer will be out in force this holiday shopping season. As we point out, roughly two-thirds of shoppers over the Thanksgiving to Cyber Monday period were looking to capitalize on retailer deals and promotions.
To hammer the point home, Cyber Monday is expected to be the biggest stand-alone day of the shopping long weekend. Expectations call for $6.6 billion to bought on Cyber Monday, up 16.5% year over year. To us, however, the real context is that’s not only looking like another record year, but it’s 32% greater than Black Friday online sales this year.
Which companies are best positioned to capitalize on our Connected Society, Cash-Strapped Consumer, Rise & Fall of the Middle Class and Affordable Luxury investing themes this holiday season?
You’ll have to listen to the podcast to find out. Along the way, you’ll learn what the number two gift item will be this year and we’ll mention a sleeper gift card company that is a contender for our Cashless Consumption investing theme as well.
Companies mentioned on this podcast
- Adobe Systems (ADBE)
- Amazon (AMZN)
- Apple (AAPL)
- Best Buy (BBY)
- Blackhawk Networks (HAWK)
- JC Penney (JCP)
- Kohl’s (KSS)
- Macy’s (M)
- MasterCard (MA)
- National Retail Federation
- Simon Property Group (SPG)
- Shopify (SHOP)
- Starbucks (SBUX)
- Target (TGT)
- Visa (V)
- Wal-Mart (WMT)
Resources for this podcast:
- Chris Versace – @_ChrisVersace
- Lenore Hawkins – @EllesEconomy
- Tematica Research – https://www.tematicaresearch.com
- Themes Report: https://www.tematicaresearch.com/whatisthematicinvesting
- Cocktail Investing: Distilling Everyday Noise into Clear Investment Signals for Better Returns
Books we’re currently reading:
- Versace: The Innovation Blind Spot: Why We Back the Wrong Ideas—and What to Do About It
- Hawkins: How Money Got Free