Apple, Amazon, and eBay Are Winning This Shopping Season

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According to information regarding sales and traffic over Thanksgiving, Black Friday, and Cyber Monday, Amazon (NASDAQ: AMZN  ) , Apple (NASDAQ: AAPL  ) and eBay (NASDAQ: EBAY  ) are looking like three big winners this shopping season. This time of the year can be financially significant for many companies, and the data is also highlighting some important long-term trends for investors to consider.

Amazon and the online retail revolution
Brick-and-mortar retailers are going through challenging times. The National Retail Federation estimates that spending during the Thanksgiving weekend fell by nearly 3% versus the yea- ago period. Retailers have been hurt by lackluster demand for quite some time now, so the news should not come as a big surprise.

Online retailers are in a very different position, though: According to ComScore, online sales grew by a remarkable 17.3% during Thanksgiving and Black Friday, with Amazon and eBay, in that order, being the two most visited online retail sites. ChannelAdvisor estimates that Amazon saw a whopping increase of 44.3% in revenue during Cyber Monday, while sales at eBay increased by 32.1%.

Online retail continues to outgrow brick-and-mortar by a wide margin, and Amazon is the undisputed online retail king. The company has gained market participation in different categories over the last several years and it has reached a massive scale and remarkable operational efficiencies, providing rock-solid competitive strengths for the long term.

Amazon has a loyal customer base, and the company has been consolidating its competitive position by growing its Amazon Prime Membership program, which strengthens its relationship with customers. The company doesn't disclose membership figures, but Morningstar and Consumer Intelligence Research Partners estimated in March of this year that members were already surpassing the 10 million mark.

The online retailer has the competitive drive to operate with razor-thin profit margins in order to continue gaining market share, and is heavily investing in areas like warehouses, and futuristic projects like flying drones to deliver packages to consumers, in order to provide a better service.

Amazon is becoming stronger as it becomes bigger, and the company is remarkably well positioned to continue leading the online shopping revolution.

eBay for shopping and payments
eBay is not only benefiting from a sizable position in online retail as the second biggest player behind Amazon; its PayPal is an enormously valuable strategic asset for the company when it comes to digital payments. Furthermore, eBay has reported some really strong figures in both mobile shopping and mobile payments during Thanksgiving.

eBay said Thanksgiving visits across mobile devices were up by 130% versus 2012, and mobile orders grew by 127% in comparison with the previous year. Thanksgiving also saw a strong 91% increase in consumers shopping through PayPal mobile around the world, and mobile TPV -- total payments volume -- increased by 114.7% versus 2012.

As consumers move toward online shopping for comfort and price convenience, both Amazon and eBay stand to gain during the years to come. While Amazon rules in online retail, eBay is another sizable player in that business that also has a leadership position in digital payments due to the growing popularity of PayPal on a global basis.

Reports of the death of the iPad have been greatly exaggerated
Wall Street analysts have been quite concerned about growing market share for Android tablets versus Apple's iPad lately. But according to recent sales data, iPad demand has been remarkably strong in the first days of the shopping season, and that says a lot about Apple's place as the undisputed quality leader in the tablets business.

Retailers like Wal-Mart, Target, and Best Buy have offered big discounts for different iPad models, and customers have responded with avid demand for the product. Wal-Mart said it sold 1.4 million tablets on Thanksgiving, with the iPad Mini being a top seller. eBay was reportedly selling one iPad per second on Black Friday at midnight.

IBM reports that iOS is far outpacing Android when it comes to traffic and online sales. The company calculates that iOS traffic reached 22.4% of all online traffic, compared to 9.1% for Android. In terms of sales, IBM estimates that iOS represented 14.5% of all online sales versus 2.6% for Android during Cyber Monday, Black Friday, and Thanksgiving

Strong iPad sales and engagement figures bode particularly well for Apple in the key December quarter, as the company is reaching that crucial period of the year with a completely renewed line of products. According to this data, consumers are still pretty much in love with Apple's devices, and that says a lot about the company's medium- and long-term prospects.

Bottom line
Investment decisions should not be solely based on data from a short period of time, but the start of the shopping season can underscore some important long-term trends to consider. Amazon and eBay continue benefiting from growing online retail sales and digital payments, while Apple seems to be as strong as ever in terms of customer demand and user engagement. Information collected over the last week has relevant implications for investors thinking about the best companies to hold for years to come.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 10, 2013, at 2:07 PM, ayaghsizian wrote:

    Nightclubs have drink specials and promotions to get girls in the door. They need to try to get girls there. They don't need to try to get guys there. Guys will always go places where there are a lot of girls. Same with Ebay (and any other business). They need to try to get buyers. They don't need to try to get sellers. Sellers will always be where there are buyers. It makes good business sense to treat the buyers wonderful. Even too wonderful in some cases because it is so important to keep buyers happy. Remember that saying "the customer is always right"? Take a moment and think about why that saying was created.

    I don't want to be rude if you are a seller but I would like to be blunt. Ebay will always treat the buyers better and take their side because it makes good business sense. A buyer needs to have confidence, reassurances and guarantees to buy something they cant put their hands on first. They want to know Ebay is on their side. And because 99% of buyers are normal people looking for real goods and not scam artists, there will always be sellers trying to make money off them.

  • Report this Comment On December 18, 2013, at 8:16 AM, JordanMalik wrote:

    I love watching this race to connect with the consumer, but remember the initial contact is probably a loss leader. Amazon has it down pat because they know how to continue the relationship with the customer (=make it profitable) after his/her initial purchases. But I don't believe Walmart and eBay have a solid strategy in place and they're going through the motions of same-day delivery and/or lowest prices. If they continue, that's a short-cut but a recipe for long-term pain.

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