There was a ton of negative chatter when the Black Friday and Cyber Monday results were flat year over year, after years of continued online shopping growth. The reality is that e-commerce is bigger than ever, and the leaders in the industry continue to dominate. The difference this year was the massive supply chain issues, a problem that was documented by literally hundreds of ships lined up in the Pacific ocean waiting to dock at the port of Los Angeles.
As a result, many online and brick-and-mortar retailers started promotions earlier than usual, and many consumers ordered earlier, fearing that waiting until the traditional shopping promotion days of Black Friday and Cyber Monday would be too late and they wouldn’t receive their orders in time.
Jefferies points out that online sales grew 10% from the beginning of November through Cyber Monday. Physical retail stores grew 46% year over year on Black Friday, but they were still down 5% compared to 2019 as consumers have permanently shifted consumption online. 2020 was an anomaly to some degree due to COVID-19 restrictions in place at that time.
The analysts at Jefferies said this when discussing the increasing and changing online shopping trends:
Increased adoption of mobile commerce, curbside pickup, and buy-now-pay-later (BNPL) show changing shopping behavior: Smartphone purchases accounted for 44% of all online sales on Black Friday according to Salesforce, which is up 11% from last year. During the weekend, curbside pickup was up 33% from pre-pandemic levels and was used in 18% of online orders (for retailers who offer the service), which is actually down from 25% of all orders at the same point last year. BNPL increased 141% year-over-year on Black Friday.
Four companies dominate the cyber sales world, and all remain top picks for aggressive investors looking for long-term growth ideas. Their stocks are rated Buy across Wall Street, but it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
This is the absolute leader in online shopping and is on the BofA Securities US 1 list of top stock picks. Amazon.com Inc. (NASDAQ: AMZN) serves consumers through retail websites that primarily include merchandise and content purchased for resale from vendors and those offered by third-party sellers.
The company serves developers and enterprises through Amazon Web Services (AWS), which provides computing, storage, database, analytics, applications and deployment services that virtually enable various businesses. AWS is also the undisputed leader in the cloud now, and many top analysts see the company expanding and moving up the enterprise information value chain and targeting a larger total addressable market.
Like every year, online sales should continue to grow. Amazon remains the go-to portal for shoppers looking for bargains, as well as a good way for consumers to stay out of brick-and-mortar stores this year if they feel the need to.
BofA Securities has a $4,250 price objective for Amazon.com stock. The consensus target is $4,033.86, and Wednesday’s last trade came in at $3443.72.