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Amazon Continues To Gain Holiday Sales Share At Expense Of Rivals

Amazon.com ( AMZN ) fell just shy of Q4 sales expectations when the company reported its earnings results late last month, but in many ways, the holidays were very very good to the e-commerce leader. The e-tailer’s lead grew last holiday, according to a new report from Slice Intelligence .  The research firm says Amazon’s revenue rose 12% for the holiday period — Nov. 1 through Dec. 27 — vs. just 10% of online sales overall. Because of Amazon’s massive market share , that 12% accounted for more than half the total online-sales dollar growth, according to Slice. Amazon is so dominant that it’s market position might be close to impenetrable , some observers say. Amazon even dwarfs walmart.com, the Web property of No. 1 overall retailer  Wal-Mart ( WMT ). Amazon late last month said Q4 revenue jumped 22% year over year to $35.7 billion, but Wall Street had modeled nearly $36 billion. The biggest percentage growth for the holidays, though, goes to much smaller  Wayfair ( W ), a website dedicated to selling furniture and accessories for homes. Slice says its Q4 sales soared 150%, and says it is stealing shoppers from Amazon, Restoration Hardware ( RH ) and Macy’s ( M ). Retail giant Target ( TGT ) had a good holiday season, says the Slice report, with Q4 sales rising 52%, spurred by a strong inventory, aggressive promotions and its offer of free shipping for every order. Target and Wayfair both report Q4 earnings results next week. As IBD has previously reported , the Slice report also indicated that the holiday shopping season is stretching out, with a greater percentage of the season’s sales taking place before Thanksgiving. Amazon stock rose 1.9% Friday, to 534.90, after touching a record high of 696 in late December.

Smartwatch Shipments Skyrocket In Q4, Passing Swiss Watches

Smartwatches surpassed Swiss watches in unit shipments for the first time in the fourth quarter, according to research firm Strategy Analytics. Global smartwatch shipments reached 8.1 million units in the December quarter, compared with 7.9 million Swiss watch shipments, Strategy Analytics reported Thursday. Shipments of smartwatches, led by the Apple ( AAPL ) Watch, surged 316% from 1.9 million in Q4 2014. Meanwhile shipments of Swiss watches fell 5% from 8.3 million in Q4 2014, the research firm said. “Global demand for Swiss watches is slowing down, and major players like Swatch ( SWGAY ) are struggling to find growth,” Strategy Analytics analyst Steven Waltzer said in a statement. Strategy Analytics Executive Director Neil Mawston concurred. “The Swiss watch industry has been very slow to react to the development of smartwatches,” Mawston said in a statement. “The Swiss watch industry has been sticking its head in the sand and hoping smartwatches will go away. Swiss brands, like Tag Heuer, accounted for a tiny 1% of all smartwatches shipped globally during Q4 2015, and they are long way behind Apple, Samsung and other leaders in the high-growth smartwatch category.” Smartwatches are growing rapidly in North America, Western Europe and Asia, the research firm said. Apple Watch captured 63% of the global smartwatch market in the fourth quarter, followed by Samsung with 16%. “Apple and Samsung together account for a commanding eight in 10 of all smartwatches shipped worldwide,” Strategy Analytics analyst Cliff Raskind said in a press release. Wall Street analysts estimate that Apple sold 4.9 million units of Apple Watch in the December quarter . Strategy Analytics estimates that Apple shipped 5.1 million units of Apple Watch in Q4. Apple is expected to unveil new Apple Watch software and wristbands at a media event next month. At the same event, Apple is likely to unveil a new 4-inch iPhone 5SE and iPad Air 3, according to 9to5Mac . It’s unknown when Apple will release a second-generation Apple Watch. But some are speculating that it could be soon because retailers are discounting many current Apple Watch models, presumably to clear out older inventory. The Apple Watch is being discounted by $100 at Best Buy ( BBY ), Target ( TGT ) and other stores. The entry-level Apple Watch Sport model is selling for $249, 29% off the regular price of $349. Image provided by Shutterstock .

Will High Prime Member Churn Hurt Amazon Sales?

Amazon.com ‘s ( AMZN ) Prime loyalty program is one of the keys to the company’s e-tail dominance, but the secretive Amazon reveals little about Prime’s underlying metrics, leaving analysts to generate their own. According to a recent analysis conducted by ITG Investment Research, Amazon’s churn rate — the annual rate at which shoppers stop subscribing to Prime — was 32% in Dec. of 2015, which ITG analyst Steve Weinstein called “high.” But in a research note Thursday, Weinstein wrote that even though the company has a high churn rate, customers who dropped Prime actually spent 8% more money on Amazon.com in the year following the cancellation. Amazon Prime is one of the few extremely successful loyalty programs in e-tail, a fact that surprises Wells Fargo analyst Matt Nemer. He told IBD recently that he would have expected competitors to innovate, but few have done so with success. Competitor Wal-Mart ‘s ( WMT ) Walmart.com does not have a customer loyalty program for online sales. Target ( TGT ) recently rolled out its Red Card program, which offers free shipping from Target.com, an extra 30 days for returns and 5% off all purchases. Amazon Prime affords its members free one-day shipping in certain markets, free two-day shipping in most of the continental United States, free streaming video with original award-winning content, and a host of other perks. It’s no wonder that Amazon CEO Jeff Bezos is betting big on Prime: Member spending continues to drive Amazon’s sales, too. In Q4 2015, Weinstein says that Prime members generated 57% of Amazon’s North American top line and that Prime members increase their spending about 12% annually. Older Prime members tend to spend more, and Weinstein’s analysis indicated that those members who signed up in Jan. of 2012 spent, on average, nearly 45% more on Amazon in 2015 than Prime members who joined in Jan. 2014. Non-Prime shoppers spend less than $1,000 on average in 2015. Some 33% of Prime’s 46 million members have been acquired in the last two years, Weinstein says. Amazon stock rose 2.5% to 534.10 in the stock market today . The company has an IBD Composite Rating of 75, where 99 is the highest. Seattle-based Amazon posted mixed Q4 earnings — despite hauling in more than $100 billion in sales during 2015, the company missed Wall Street’s lofty earnings target. According to Nemer, Amazon captured 51% of all U.S. retail growth in Q4. He also said that the sell-off following the earnings release was too hasty and that the company continues to have strong fundamentals and a dominant position in the market.