During the holiday shopping season, brick-and-mortar retailers undeniably offer a slew of promotions and discounts to lure customers. But this year, thanks to the outbreak of the coronavirus and its devastating impact on economic growth, such brick-and-mortar retailers are finding it hard to do business. Also, it won’t be surprising if their sales at shopping malls and numerous other centers take a beating.
The pandemic has impacted businesses, resulting in shutdown of factory outlets and mounting layoffs, which eventually led to a sharp decline in income levels. Needless to say, income loss impacts household expenses and of course, sales at retail outlets. What’s more disheartening is that jobless benefits and financial support from the government are coming to an end this winter, which will make it even more difficult for consumers to spend in the near term.
But traditional brick-and-mortar retailers that have ventured into the e-commerce space along with existing online players are better off. This is because consumers who still have the wherewithal to purchase will opt to stay at home and avail online facilities amid the relentless rise in coronavirus cases. Particularly, in the weeks of Nov 22 and Nov 29, online shopping sales are widely expected to pick up.
Adobe Analytics predicted that online shopping sales in the United States during Black Friday (Nov 27) and Cyber Monday (Nov 30) are projected to come in at $10 billion and $12.7 billion, indicating a 39% and 35% jump year over year, respectively. Most importantly, every day from Nov 22 through Dec 3, online sales will be $3 billion. In fact, Adobe Analytics predicted that online sales this year for the month of November and December will eventually touch $189 billion, suggesting a whopping year-over-year jump of 33%.
Interestingly, Adobe said that the forecasted growth will be equivalent to two years’ growth in just one season. While small as well as large retailers are poised to witness a healthy jump in online revenues year over year in the said period, consumers are expected to spend an additional $11 billion online if large parts of the country are shutdown again to curb the spread of the virus, a scenario that seems likely given the surge in infection and hospitalization rates of late.
Lastly, head of Marketing and Customer Insights at Adobe, John Copeland, said that “as retailers adapt to consumers’ new behaviors in this pandemic, we expect earlier discounts, more shipping and pick-up options and uncertainty around in-store purchases to drive this year’s online holiday sales to record highs.” By the way, NetElixir, a digital marketing agency, added that on average, e-commerce sales in the United States are expected to rise 30% year over year during the November through December period this year.
Top 4 Gainers
With online sales likely to pick up in the months of November and December, with the weeks of Nov 22 and Nov 29 being the peak season, placing bets on retailers making the most of their online business seems prudent. We have, thus, selected four such stocks that should make meaningful additions to your portfolio. The stocks flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Wayfair Inc. W is an online seller of home goods products, consisting of furniture and home decor. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved 53.5% north over the past 60 days. The company’s expected earnings growth rate for the current and next quarter is 129.6% and nearly 77%, respectively.
Target Corporation TGT has evolved from just being a pure brick-&-mortar retailer to an omni-channel entity, helping shoppers buy products from a mobile device or a laptop, to name a few. The company, currently, has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved 19.3% up over the past 60 days. The company’s expected earnings growth rate for the current and next quarter is 21.9% and 193.2%, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.
Crocs, Inc. CROX designs, develops, manufactures, markets, and distributes casual lifestyle footwear and accessories. The company sells its products through wholesalers and distributors as well as e-commerce sites. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has risen 27.7% over the past 60 days. The company’s expected earnings growth rate for the current and next quarter is 283.3% and 72.7%, respectively.
Overstock.com, Inc. OSTK sells a broad range of price-competitive products, including furniture, home decor, bedding and bath, and housewares through its www.overstock.com, www.o.co and www.o.biz websites. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up more than 100% over the past 60 days. The company’s expected earnings growth rate for the current and next quarter is 135.6% and 150%, respectively.
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