Companies are warming up to the obvious. They know that consumers are staying in more. You see it in the recent blowout results from home-direct specialists like Netflix (NASDAQ:NFLX) and Amazon.com (NASDAQ:AMZN). Now you even have the venerable Cheesecake Factory (NASDAQ:CAKE) mobilizing its troops to send its warm entrees and signature desserts all the way to your door.
The high-volume casual-dining chain will be rolling out a home delivery service at 62 restaurants across 13 different markets this month. It is contracting out the actual delivery to local service providers, but isn't it just a matter of time before it turns to a dedicated in-house crew?
Goodbye takeout, hello take in
The restaurant industry knows that guests are in a hurry. Chains like Outback, Cheesecake Factory, and DineEquity's (NYSE:DIN) Applebee's have been expanding their curbside takeout options in recent years, where patrons don't even need to get out of their cars once they pull up into designated parking spaces. The drawback to curbside pickups, naturally, is that gas prices are making the round trip -- and the wait for the food if the car is still running -- a poor value proposition.
Convenience is great, but economic convenience -- even if the hungry homebodies have to fork over delivery charges -- is even better when time is money.
So this doesn't end here. Cheesecake Factory won't be the last major casual-dining chain to make a push into home delivery, bridging the final mile from its kitchen to your table. Consumers have spent the past few years upgrading their home theater systems and Wi-Fi-ing the heck out of their homes. Even if the economy was booming, the tendency to spend more leisure time inside your digs was going to happen. If pizza delivery chains can make a living delivering $10 pies to your door, it follows that a Cheesecake Factory will do just fine pulling into your driveway bagging that $70 meal for four.
Move over, staycation
I'm not just talking about this summer's staycation movement, where travelers are taking shorter trips closer to home, helping fuel regional theme parks and local multiplexes. We're talking about drawing the line at your front porch. Let's coin some new buzzwords today and call this the hermitization of America, the stayground playground, or the Homer Skimpsome.
For investors, the opportunities lie in finding the public companies that can profit from the movement. Did I mention that you can buy and sell these companies from the convenience of your home through your own online broker? You are so easy to please.
Let's start with Netflix. The DVD rental pioneer has been mailing movies to homes since before home delivery was cool. The company had more than 8.4 million subscribers at the end of June, with a goal to watch over as many as 9.7 million members by the end of the year. Given its smorgasbord model, the company is susceptible to users who rent too many movies, but given the lack of serious competition besides Blockbuster's (NYSE:BBI) Total Access, there may be more pricing elasticity here than the market thinks.
Then you have Amazon.com. Most of the physical retailers are stalling in this penny-pinching environment, but not the world's leading e-tailer. Amazon posted a 41% surge in net sales in its latest quarter, with profits more than doubling. Online retailers like Amazon and Overstock.com (NASDAQ:OSTK) that are able to offer low prices and still subsidize shipping costs will continue to win over shoppers warming up to the concept of strolling virtual aisles in their bathrobes and bunny slippers.
The last Homer Skimpsome play would be Apple (NASDAQ:AAPL). Forget the physical products, which can be delivered to your home through Apple.com. Apple's digitally delivered prowess is huge. It's not just about saving you trips to the CD shop or DVD store with Web-delivered music tracks and video downloads. The iPhone's new Apps Store is redefining how software is being purchased and transferred. Wi-Fi hermits won't even need an iPhone, as an iPod touch will fill in nicely as an Apps eater.
Have you noticed that it's the home-centric stocks I've mentioned that are holding up well in this market? It's not a coincidence. Analyzing retailers, restaurant chains, and other leisure companies requires going over the portability of what they offer. If it can't make it to your doorstep, you may have to wait awhile for a turnaround.
It's not just about the hermitization of America. It's about the monetization of that hermitization.
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