On Saturday, IBM Digital Analytics Benchmark, a source for real-time cloud-based online retail data and analysis, revealed strong online retail trends for this Thanksgiving and Black Friday:
US Holiday shoppers once again shopped online early for the best deals with Thanksgiving Day online sales increasing by 19.7 percent over 2012. This momentum set the stage for a record Black Friday, with online sales growing 18.9 percent over the same period last year. The biggest surge came from mobile sales increasing to 25.8 percent of total online sales for Thanksgiving and 21.8 percent for Black Friday as consumers went from the dinner table to their tablets to lock in the best offers. In addition, IBM reported that New York City consumers led the way in Black Friday online sales followed by Atlanta and Los Angeles.
The trend toward online purchasing and mobile transactions remains strong, and we think this bodes particularly well for Best Ideas portfolio holding eBay (EBAY). According to Tech Crunch, eBay is performing extraordinarily well. The company’s PayPal division revealed mobile payments volume growth of “114.7% over Thanksgiving 2012, with a 91% increase in consumers shopping through PayPal mobile compared to Thanksgiving 2012.” The year-over-year growth rate is phenomenal. Channel Advisor data, also released Saturday, showed that eBay continued to benefit into Black Friday thanks in part to a shortage in key electronics products. eBay showed a 38.7% same-store-sales leap on Black Friday, a measure that even topped Amazon’s (AMZN) mark of 34.7%. Channel Advisor noted that items in short supply include Microsoft’s (MSFT) Xbox One, Sony’s (SNE) PS4, Skylanders, and Furbys.
The pace of sales expansion at eBay largely suggests management was being too conservative in its holiday comments during its conference call following the firm’s recent quarterly report. Though eBay had backtracked on its initial cautious outlook shortly after issuing it (blaming the negative view on “colds” in the executive suite), the growth numbers for Thanksgiving and Black Friday at eBay were simply remarkable. We’re interpreting the news from eBay as a huge surprise to the upside, though we note that one or two days a quarter does not make.
Apple (AAPL) also appears to be a big winner this weekend. The firm has been a holding in our Best Ideas portfolio for some time, but Valuentum members were alerted to Apple in the July 24 email alert at $442 per share, where the company was also added to our Dividend Growth portfolio and the position in our Best Ideas portfolio was increased. Best Buy (BBY), Target (TGT), and Wal-Mart (WMT) are all offering nice discounts on the iPad, and sales appear to be coming in at an unprecedented pace. Wal-Mart, for example, reported 1.4 million sales of versions of the iPad on Thanksgiving alone, and according to CNBC, eBay noted it was selling an iPad at a pace of one per minute as of midnight Thanksgiving/Black Friday. Apple products continue to be in huge demand, and according to IBM Digital Analytics Benchmark, Apple’s iOS is dominating purchasing activity over Google’s (GOOG) Android:
On average, iOS users spent $127.92 per order, compared to $105.20 per order for Android on Black Friday. iOS traffic reached 28.2 percent of all online traffic, compared to 11.4 percent for Android. iOS sales reached 18.1 percent of all online sales, compared to 3.5 percent for Android.
It remains to be seen whether the strong iPad sales represent a pull-forward of demand. However, even if that’s the case, we still like the pace of unit sales. Shares of Apple closed at $556 per share Friday, up nearly 26% (or $114) since the time of our email transaction alert in July. If you were holding just a handful of shares of Apple at the time of the email transaction alert, you would have paid for your annual membership to Valuentum and then some. Unlike other research firms, we don’t send out many email transaction alerts, as we put our reputation on the line with each and every one. If you are not receiving these transaction alerts, please contact us at info@valuentum.com immediately.
Performance of Apple Since the July 24 Transaction Alert Email
Valuentum’s Take
Early indications suggest that we were extremely well-positioned in the Best Ideas portfolio heading into Thanksgiving and Black Friday. Though most of the data is preliminary, we’re more than satisfied with what we are hearing about eBay and Apple thus far. We continue to monitor holiday sales closely.
Related Firms: GME, V, MA, AXP, DFS