Retail Stocks in Focus This Holiday Season
The fourth quarter of every year
is extremely crucial for several big tech and retail companies.
from higher e-commerce sales, Apple
(NASDAQ:AAPL) experiences robust demand for its line-up of
advertising platforms such as Alphabet
(NASDAQ:GOOGL) and Meta (NASDAQ:META)
rake in billions of dollars as enterprises increase their
ad spending amid the holiday season.
Shoppers spent $9.8 billion in online sales this
Black Friday witnessed a 7.5%
increase in e-commerce spending compared to last year, with online
sales hitting a record $9.8 billion in the U.S., as per an
Adobe (NASDAQ:ADBE) Analytics report. This spike underscores the
trend of price-conscious consumers flocking online for the best
Vivek Pandya, a lead analyst at
Adobe Digital Insights, observed that consumers have become more
strategic, leveraging big sale days to maximize discounts. This
year’s Black Friday spending surge, higher than the cautious
spending in 2022 amid steep gas and food prices, indicates a
consumer base that is more open to spending.
Pandya pointed out that the rise
in Black Friday sales, with $5.3 billion coming from mobile
shopping, might be partly due to impulse purchases influenced by
social media and online advertising. Despite the trend, shoppers
remain mindful of their budgets, still recovering from last year’s
high inflation and interest rates. The Adobe survey highlighted
that $79 million in
sales came from the ‘Buy Now, Pay
Later’ option, up 47% from the previous year.
What did shoppers splurge on?
The most popular purchases were
electronics, toys, and gaming, while home-repair tools lagged
behind. According to Pandya, sales figures directly mirrored the
best discounts offered. AdobeU+02019s insights are based on an
analysis of one trillion visits to U.S. retail websites, covering
18 product categories and 100 million unique items, excluding
brick-and-mortar retail transactions.
analysis showed that in-store Black Friday sales saw a modest
increase of just over 1%, while online sales grew by over 8% from
Pandya mentioned a shift in the
traditional in-store Black Friday experience, with consumers now
preferring online shopping, where price comparisons and securing
better deals are more straightforward. Retailers, recognizing the
trend of deal-hunting consumers, have increased discount levels and
introduced pop-up promotions to attract shoppers.
The momentum from Black Friday
continued from Thanksgiving, which saw $5.6 billion in online
sales. Adobe predicts robust spending through Cyber Monday, with
anticipated online sales of around $10 billion over the weekend and
a record $12 billion on Cyber Monday.
However, Pandya expects spending
growth to slow down post-Cyber Monday, with the last significant
spike in non-essential goods spending for the year.
While some late holiday shopping
might persist into December, the major growth spurts are typically
seen in November and Thanksgiving week.
Will solid Q4 results drive the S&P 500 higher in
Wall Street remains cautious due
to inflation and interest rate hike, which has impacted the revenue
and profit margins of companies across sectors.
Investors will be hoping consumer
demand gains pace as inflation has cooled down in recent months.
Will it allow Apple and other retail giants to post stellar results
in Q4 of 2023, driving shares higher in the near term?
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