Black Friday Clicks vs Bricks

Black Friday Clicks vs Bricks


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)
  • ShopperTrak
  • Starbucks (SBUX)
  • Target (TGT)
  • Visa (V)
  • Wal-Mart (WMT)


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Walmart putting even more robots in more of its stores

Walmart putting even more robots in more of its stores


Over the last three years Wal-mart has been exploring ways to compete more effectively with the rise of e-commerce, but also help improve its in-store experience for those shoppers that continue to… you know… actually go to a physical store. One of those strategies has been to test robots that would scan the shelves to take note of out of stock items or ones that were miss-priced. Now Wal-Mart is expanding that robot test program, which could help it save on wage costs. We’re also thinking that inline with our Aging of the Population theme, and something we talked on this week’s Cocktail Investing Podcast, robots may be needed to compensate for the shrinking workforce.

On Thursday, Walmart (WMT) said it will expand the test to 50 stores. The bots are set to arrive in places like El Paso, Jacksonville and Fort Worth by the end of January.The company has been careful to pitch the robots as machinery to help staffers, not replace them.Related: 2017 just set the all-time record for store closings”We will always need great people in our stores working hard for our customers. This technology is a tool that helps our associates know where they can make the biggest difference for our customers,” Walmart spokesman Justin Rushing told CNNMoney.Still, the move seems to be a harbinger of the retail world to come. With Amazon (AMZN, Tech30) cutting into foot traffic at brick-and-mortar stores, many companies are opting to cut jobs. Automation could speed up that process.

Source: Walmart is putting even more robots in its stores – Oct. 26, 2017

Growing focus on Amazon’s private label potential

Growing focus on Amazon’s private label potential

During the summer, we here at Tematica spoke at length on the growing number of private label products and brands at Amazon (AMZN). Having seen the strategy work at a number of other retailers, like Costco Wholesale (COST), Kohl’s (KSS), Wal-Mart (WMT) and even JC Penny (JCP), we see it as “expected” that Amazon would seek to grab a greater slice of profits to be had by offering its own products.

Today, Amazon boasts 34 private label brands in nine categories, and more across Wall Street are starting to realize this is bound to be something far greater than small potatoes or a rounding error for Amazon. Now we’re wondering how long until they realize our Connected Society, Cash-Strapped Consumer and Rise & Fall of the Middle-Class themes are some of the meaningful tailwinds behind this?


In recent Amazon news, an analyst from financial firm Morgan Stanley has predicted the eCommerce platform’s private label retail sales could provide an added boost to its bottom lines.

According to a article published Tuesday (Oct. 10), analyst Brian Nowak has speculated that Amazon’s private label merchandise sales could add $1 billion to Amazon’s bottom line, making up 5 percent of retail sales by 2019.“… for Amazon, it’s all about gross profit dollars: advertising, subscriptions, services … and now private label …” Brian Nowak said.

“We believe it is increasingly important to focus on Amazon’s gross profit dollar drivers. A deepening gross profit pool gives Amazon more dollars to invest and [eventually] allows [funds] to flow down to P&L for shareholders.

”Amazon’s private label goods first launched in 2009 and include thousands of products in a wide range of categories, such as clothing, electronics, industrial supplies and more, the article reported.

“Private label is likely to be the next driver … as our sensitivity shows that even if private label could grow to 5 percent of Amazon’s retail sales by 2019, it would add almost $1 billion of gross profit,” the Morgan Stanley analyst said.

Amazon currently boasts 34 private label brands in nine categories. Private label products are responsible for 0.15 percent of its global merchandise sales. Other major retailers see an average of 18 percent of gross merchandise sales coming from private label profits, reported. For example, Costco gets 20 percent of its revenue from private labels, JCPenney sees 44 percent, Kohl’s gets 46 percent and Walmart sees 15 percent, the article noted.

Source: Private Label Boosts Amazon’s Retail Sales |

Apple to spend big to ride our Content is King theme 

Apple to spend big to ride our Content is King theme 


Thus far Apple (AAPL) has stayed on the Content is King theme sidelines, but a combination of recent hire and a purported $1 billion check book to develop content change that. Granted, that $1 billion is well below what Netflix (NFLX) and Amazon (AMZN) are spending, but Apple has Apple TV – a solid platform that is bringing Amazon’s Prime Video and Wal-Mart’s (WMT) Vudu video service under its offering. As we like to say at Tematica, the only thing better than having one of our investment tailwinds behind a company’s back is having several of them.

Apple appears to be taking original content production very seriously. Building on significant talent hires, the Wall Street Journal writes Apple has readied a $1 billion budget to ‘procure and produce’ content over the next year.The report says the sum is about half what HBO spent on production last year.

Apple could launch up to ten new shows, with Apple SVP Eddy Cue said to have ambitions to offer shows that rival Game of Thrones.Try Amazon Prime 30-Day Free TrialApple’s initial rounds of content have not been runaway successes, with Planet of the Apps and Carpool Karaoke receiving bad-to-mild reviews from critics.

Reach of the shows has also been limited to users with Apple Music subscriptions.However, until recently, it didn’t really feel like Apple was giving much priority to original content efforts. With a large wallet and premiere talent leading the video programming division, it is likely that the quality of Apple’s in-development programming will also be higher.

Source: Apple to spend $1bn on original content and produce up to 10 new shows over the next year, according to report | 9to5Mac