According to information regarding sales and traffic over Thanksgiving, Black Friday, and Cyber Monday, Amazon (AMZN -1.64%), Apple (AAPL 1.27%) and eBay (EBAY -0.14%) 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.
