Cyber Monday was the busiest shopping day last year and is
expected to set sales trend for online retailers this holiday
season. Last year saw traffic to online retail sites increasing 29%
to ~180 million visits on Cyber Monday. In 2011, online traffic on
Thanksgiving and Black Friday closely matched those on Cyber
Monday. The same has grown at about 3% on both the days this year
and we expect the growth to be 3% or more today, a Cyber
Monday.
Amazon.com
(
AMZN
) seems to have the lead among e-retailers with sales increasing
~42% in the first two weeks of this month and it being the top
visited site on Thanksgiving and Black Friday. The company had
spread out its Black Friday Deals over several weeks and hence, we
won't read too much in the rather small difference between the
visits to Wal-Mart (
WMT
) and Amazon's website. With Cyber Monday deals also spread over
three days, we expect the traffic to keep growing steadily
over the period and help the company sustain its growth in what
should be a blockbuster holiday season.
Check out our complete analysis of Amazon
Did Amazon really gain this Black Friday?
Amazon was the most visited retail site on both Thanksgiving and
Black Friday with traffic on the days being 25 million and 29
million. It's interesting to note that the sequential growth belied
the overall trend. Its closest competitor in terms of visits on
Thanksgiving, Wal-Mart, witnessed a decline of almost 25% on Black
Friday while Amazon saw traffic grow by 15%. The next biggest
competitor in terms of online traffic, Best Buy (
BBY
) witnessed a 20% decline. The dip in traffic to online sites
of brick and mortar retailers is probably a result of them offering
better deals at the stores than online. However, the better deals
are generally for a day when compared to the Amazon offering good
deals over a period.
We believe that the company's decision to spread out its deals
over a time period and not focusing on a single day to have paid
off with it gaining more customers and a greater share of sales
over a period of time. Company's financial filings and press
releases will help verify this over time. An expected ~15% of this
holiday traffic is through tablets and we expect Amazon to have a
major share gain in this 15% with its Kindle devices. As a whole,
the online retail sales industry is expected to grow at 10-15% and
Amazon is already growing at approx. thrice the rate. Hence, we
expect Amazon to increase its share in US retail markets by about a
percentage point this year.
Cyber Monday
and not Black Friday t
o set holiday trends this year
Almost 30% of consumers surveyed by Nielsen ahead of
Thanksgiving state that they'll shop online on Cyber Monday.
Combined, an estimated 82% who did not shop on Black Friday and the
17% who did shop but spent only an expected 50% of their holiday
shopping budgets present a big opportunity for online retailers
this holiday season. Amazon being the market leader and the default
go-to website for someone looking to shop online is well poised to
maintain its sales growth. Also, the company stands to gain from
any unfinished shopping on Black Friday resulting from out-of-stock
situations or because of the huge rush. Here too, the company's
ploy of spacing its Cyber Monday deals over days should help it
gain share from other online retailers.
We have a
$218
estimate for Amazon
which is 8% below the current market price.
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