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 | | | New July Trend Is Upending the Retail Sector | | Matthew Carr | Chief Trends Strategist | The Oxford Club | | | | | In the world of retail, one company's influence has become so vast that it's upending the entire sector and altering historical trends that have held steady for decades.
And we're just days away from witnessing that impact.
Historically, retail trends have been quite simple. Investors buy shares of retailers in late September or early October to benefit from the most powerful consumer force in the market: holiday shopping season.
That's not a joke. The retail economy is fueled by "Christmas spirit." The majority of its revenue comes from those final two quarters of the year. So shares pop on those big sales figures.
Then, before first quarter results are released, savvy trend investors dump the stocks. Shares of retailers suffer during the summer months while sales are slow.
But now one company is bucking that trend with one of the largest shopping days in the world. And it's in July, not even November or December...
"Alexa, When Is Prime Day?"
Of course, I'm talking about Amazon (Nasdaq: AMZN) Prime Day.
Last year, the world's largest retailer posted a record $4.2 billion in sales during its annual Prime Day event (though it actually lasts longer than a day).
This was Amazon's largest single sales day ever.
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| Cyber Monday broke the record just a few months later in November.
Of course, post-Thanksgiving shopping is an existing tradition. And the "Turkey 5" - the five shopping days stretching from Thanksgiving to Cyber Monday - set records for the online retailer.
But Prime Day is giving Cyber Monday a run for its money at Amazon.
The online retailer's sales during this event over the past five years have enjoyed unparalleled growth... From 2015 to 2018, Amazon Prime Day sales skyrocketed 365%!
Last year, it sold more than 100 million items during its 36-hour annual event. And 11 of the top 20 products sold were made by Amazon.
But 2019 is going to be even bigger, for a variety of reasons.
First, this year, Amazon Prime Day has been extended to a full 48 hours. Starting July 15, it'll feature more than 1 million deals across 18 countries, with the United Arab Emirates added for 2019. And the company's 50 million Amazon Prime members are anxiously waiting for the sales to begin.
Expectations are for Amazon to set new records this year.
But for investors, does Prime Day translate into big gains?
Well, Amazon shares have gained more than 443% since the event began in 2015.
That annihilates the 50% gain the S&P has cobbled together during that span.
And we can't forget the fact that Amazon is now the largest retailer in the world, with a market cap of $960 billion.
Additionally, over the past five years, Amazon shares have gained more than 7% in July.
It's been the third-best-performing month for shares since 2014... Amazon shares haven't ended July in the red since the company launched its Prime Day. But the biggest impacts are being felt beyond the e-commerce giant.
Christmas in July
The "Christmas in July" craze has become so huge that every retailer is now rushing to cash in on the summer fun.
First and foremost, this year, e-commerce rival eBay (Nasdaq: EBAY) is trolling Amazon over last year's debacle. The company is offering a "Crash Sale," in reference to the outage Amazon suffered during its 2018 Prime Day when its systems were overwhelmed by shoppers.
But eBay is upping the ante. It's promising a slew of bonus deals if - and only if - Amazon's servers crash once again under the consumer deluge.
Though that's merely one company riding Amazon's coattails.
Nordstrom's (NYSE: JWN) annual anniversary sale will begin on July 12.
Walmart (NYSE: WMT) will be running sales July 14 to 17, bookending Amazon's Prime Day event.
Then, Target's (NYSE: TGT) Deal Days are going toe to toe with Amazon, overlapping Prime Day's July 15 and 16 dates.
Clearly, a new trend is being born. July is quickly emerging as a massive shopping month.
And mid-month is evolving into another Turkey 5, anchored by its own version of Cyber Monday.
RIP Traditional Retail
Another irreversible trend to consider here is e-commerce.
It's driving a stake into the heart of brick-and-mortar retail.
And investors who have played this trend are winning.
Year to date, the S&P has gained roughly 18.5%. Not bad at all for the halfway point of 2019.
But online retailers are enjoying an even better year. The Amplify Online Retail ETF (Nasdaq: IBUY) has gained 24.5% in 2019.
Not only does that beat the S&P's return, but it leaves the SPDR S&P Retail ETF (NYSE: XRT) choking on its dust... Of course, Amazon is outrunning them all.
But reinventing retail and introducing a new consumer holiday isn't all that's driving Amazon.
Maybe most significant, by the end of the year, the retail giant is projected to control more than 52% of all U.S. e-commerce sales. That's up from the 48% market share it held at the end of 2018.
For context, e-commerce as a whole accounted for 14.3% of total U.S. retail sales last year. So that means Amazon is projected to be responsible for roughly 5% of ALL U.S. online and in-store retail sales this year.
There's no giant bigger than Amazon. It truly is a market mover. And the holiday it invented is changing the world of retail.
That's the type of impact - and trend - investors can't afford to ignore.
Good investing,
Matthew | | | | |  | | | | | |  |  | | | | Matthew Carr | July 11, 2019 OTC Markets Group Director Jason Paltrowitz busts some of the biggest myths about OTC listings. Read More | | | | |  | | | | David Fessler | July 10, 2019 The renewable energy triple threat - wind power, solar power and battery storage - is becoming increasingly more accessible for residential energy users like you and me. Read More | | | | |  | | | | Matthew Carr | July 9, 2019 It's basic investor math: If revenue increases from one quarter to the next, the company's share price should increase along with it. Read More | | | | | | | | | | |
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