E-commerce is an idea whose time has come and gone.
The above headline from MIT’s e-newsletter caught my eye this morning. It seemed so contrary for a future thinking organization to suggest such a thought. So, I read it and, of course, it made sense, given what I wrote yesterday. The economic transformation is happening everywhere, which makes it cultural, as well.
- In recent years, Macy’s has turned into a digital hybrid nearly as familiar with GPS signals and online advertising as it is with clothes racks and perfume counters. According to its annual report, it’s now “an omnichannel retail organization operating stores and websites.”
Macy’s is a cultural icon. Its big stores have dominated malls and shopping avenues for decades. Apparently, the big store concept will continue, as folks like to touch and see product, as well as try on clothes. Folks like the physical experience of shopping. Yet, in this time of a tighter dollar, yuan, rupee, and euro, the physical experience of shopping easily plays a second fiddle to cheaper and, often, online shopping means cheaper.
- “Omnichannel” is a buzzword that describes a survival strategy. Threatened by the growth of low-cost online merchants, traditional retailers are reacting by following customers onto the Internet.
So, here comes omnichannel marketing and sales, which means that e-commerce as an idea has come, but it is not gone – it has remained and is now an integral and inseparable part of our culture and shopping experience. From a market perspective, dismissing the iconic retailers as fading dinosaurs could be a mistake.
- Online orders now ship from the backrooms of 500 Macy’s stores that this year began acting as mini distribution centers.
Yet, according to US Census Bureau, less than ten percent of all retail sales in the US actually happen online. So, what then better defines the “online” shopping experience?
- When stores like Best Buy survey their customers, they find that 80 percent of them have already searched for price information online. A third of them do so on a phone while inside a store.
Yesterday I presented a picture of how life has evolved in the last dozen years or so. Smack dab in the center of that picture is the now ubiquitous cell phone.
- Cell phones have created a way for financial service providers to reach very remote populations and provide easier access to credit, says Mary Ellen Iskenderian, CEO of Women’s World Banking.
The above points to the extreme reach of cell phones, which exemplifies my point, but the important take away point is more obscure. What makes that financial reach possible is wireless technology. Deep within wireless technology, the manufacturers of wireless equipment quietly do their unheralded thing to keep the system alive. The Ciscos and Ace Technologies of the world are not flashy anymore, but they do the job, and they are not alone. Check out the link below. Their just might be a winner or two in the group, if you think technology, wireless specifically, is a market play.
http://www.bloomberg.com/markets/companies/wireless-equipment/
Going back to another point made earlier about online shopping brings me to a rather iconic online retailer – Amazon. Back in the day (early and mid-1990s), this company could not make a dime for years, but it held on because Mr. Bezos had a vision, a rather right-on vision. Today, Amazon is spending some 1-billion dollars to remove the old and bring in the new, another example of how the young bulls are ready to challenge the old bulls in the market, of how the old need to get on board or the train will leave without them (think Kodak).
Amazon Will Bet You $1 Billion That You Will Cut The Cord
Amazon is developing its own TV programming based on the voting of its customer base. It is developing programming that its customers asked to be developed. It wants folks to sever their traditional ties to the TV. It wants to take media consumption straight to the world of digital. Like Macy’s, though, keep your eye on the big three – CBS, NBC, and ABC. Be assured, these folks see the hand writing on the wall and they have the resources to meld into the technological flow.
- It is time for the electrically driven rubber to hit the road. Plenty of ink has been spilled about whether Tesla Motors Inc.’s shares are in a bubble. Its third-quarter results, due Tuesday, will give investors a chance to step back from that debate and focus once again on fundamentals.
The electric car is a long-time coming, and it is a tectonic plate-like shift, in both the energy world and the world of the automobile. As Tesla succeeds, watch the movement of the big carmakers, but, more importantly, from a market perspective, watch the structural shift that has to occur to accommodate the electric car. More energy will be necessary, true, but someone will have to begin installing charging stations (think Target). As well, better batteries are on the needs list. Two areas to check out for market plays.
- Stocks are also seeing support from strong Q3 earnings results as 76% of the 373 S&P 500 companies that reported earnings results have beaten estimates.
- Dec coffee on Monday slumped to a fresh 4-1/2 year low.
The above two bullets are throw ins to a) remind you that the market is about earnings and b) I love my coffee, as do billions of others, so coffee prices dropping is really good news.
Trade in the day; Invest in your life …
