By Robert Sun, Carnegie Mellon University
With unemployment still at high levels and households feeling strapped for cash, this past holiday season could have serious implications for families, retailers, and maybe the overall economy as a whole.
To add to the tension, much of the northeast United States was blanketed with several snowstorms so far this season, leaving travelers stranded and shoppers trapped at home. But with earnings still in the distance, an opportunistic investor might see a few ways that companies could benefit from the last-minute, panic shopping and frantic retailers trying to lure consumers out that we saw in the end of 2009.
Industries that could benefit:
Online Retailers
Amazon.com (AMZN) and eBay (EBAY) were two retailers at the forefront of the holiday gifting chaos as last-minute shoppers were unable to hit the roads due to extreme weather conditions. Online sales started strong in the holiday season of 2009 as Tuesday, December 15 marked the first time online sales topped $900 million in a day. According to web analyzer, Coremetrics, retail sales for the last weekend before Christmas were estimated to jump 24 percent over last year.
Shipping
Paired with increased online retail sales will be increased activity by shipping companies. As part of the push to get shoppers online, retailers were guaranteeing that their deliveries will arrive on time. In addition, numerous traditional and online retailers offered free express shipping for consumers worried their presents would arrive late. For shipping companies like FedEx Corp. (FDX) and UPS (UPS), they saw a flood of premium, expensive delivery orders subsidized by the retailers
Industry that could falter:
Clothing and Apparel
While many items can be bought online and at the physical storefront, some items are just too personalized to translate well to the virtual world. Clothing retailers like Abercrombie and Fitch (ANF) and American Eagle Outfitters (AEO) expecting significant traffic on the last weekend before Christmas might find themselves currently with a large volume of unsold inventory and forced to mark it down. Others, such as Macy’s (M), kept their stores open around the clock in hopes of squeezing the last ounce of holiday sales this season.
With many saying good riddance to 2009, here’s hoping that 2010 will be better an all accounts.
