Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
The stock market couldn't be more mixed today. As I'm writing, 15 of the Dow Jones Industrial Average's (DJINDICES:^DJI) 30 components are up, and 15 are down, and the index itself is flat. Interestingly, none of the Dow stocks are up or down more than 1%, which is rare given the normal volatility of the market. But lots of investors have already taken off early for the holiday weekend, and there's not a lot of data out today -- so a quiet day was sort of expected.
What won't be quiet is retail over the next four days. The shopping craze of Black Friday is extending to the full Thanksgiving weekend, as stores like Wal-Mart (NYSE:WMT) and Target (NYSE:TGT) extend hours; but the season hasn't lost its importance. This weekend will tell us a lot about where consumers are shopping, and just how far retailers will go to bring shoppers to their stores. So far, the fight looks to be fierce.
One of the reasons discounts are getting bigger, and store hours are getting longer, is the emergence of online shopping, which never closes. In 2011, 37% of shoppers said they shopped online on Black Friday weekend, but last year, that figure was up to 41%. Online retailers took home more than $1 billion in revenue on Black Friday alone in 2012 and, after growing 26%, I think we can expect to see numbers up again.
Amazon (NASDAQ:AMZN) is leading the online retail charge, and it's putting deals up as often as every 10 minutes on Friday.
What to watch this weekend
Recent data points to a strong shift to online shipping, which retailers are trying to change this weekend. Last quarter, Wal-Mart reported a 0.3% decline in U.S. same-store sales, and Target only grew sales at a 0.9% clip. That compares to 30.7% growth in the U.S. for Amazon, and now that online shopping isn't just a bit player, it's important to see who takes share.
Brick-and-mortar stores are trying to fight back with longer hours and better deals, so we should look for signs of the strategy either working or falling flat on its face over the weekend. If brick-and-mortar sales are flat, I think it'll mean an era of consolidation is necessary in retail.