Shift in Consumer Spending Habits Sure to Reward This Stock
There was a time in the past when Wal-Mart Stores, Inc. (NYSE/WMT) was the top retail stock for investors and the go-to place to find a bargain. I used to refer to the retailer as the “Death Star” of the retail sector, killing off smaller rivals via its expansion.
But as my stock analysis points out, that was yesterday. The shopping environment is much more competitive now; it’s almost akin to a bowl of piranhas, where there are multiple retailers vying to snap up fewer consumer dollars.
According to my stock analysis, Wal-Mart doesn’t only have the big-box stores like Costco Wholesale Corporation (NASDAQ/COST) and the multitude of discount stores to fend off. As my stock analysis indicates, we are also seeing a marked shift to online spending as consumers search everywhere for the best selections and prices.
Cheaper goods are no longer found by simply venturing out to the stores. And to add to the savings, most of the major online retailers are offering free shipping. The convenience of shopping from home or even on the go via your mobile device appears to be more attractive to consumers, as my stock analysis indicates.
One of the top online retailers that I feel has the wherewithal to succeed based on my stock analysis is Amazon.com, Inc. (NASDAQ/AMZN).
Under the leadership of its CEO, Jeff Bezos, Amazon.com has ambitions to make the company a one-stop shopping place for online consumers. Whether it’s books, music, clothes, electronics, or online movie streaming, Amazon.com offers it all.
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The company is also experimenting with an online grocery branch in several major U.S. cities to test this highly lucrative business. It’s no surprise that Amazon.com is testing its online grocery business via its “AmazonFresh” segment in New York City, Los Angeles, and Seattle. The premise of this business is that you can order your groceries online for same-day delivery. This is not a new concept; in fact, it has been around for longer than a decade. But you can’t underestimate Amazon.com’s size and strength in the retail business. Based on my stock analysis, Amazon.com could easily snap up a large market share if it wants to; I wouldn’t be surprised if it acquires a company in its pursuit.
The reality is that whatever you are looking for, you can probably find it via Amazon.com. The company even wants to deliver books and other smaller items with drones. Imagine ordering a book online and then having it dropped off by a drone within an hour.
An area where I also see great potential for Amazon.com based on my stock analysis is the online entertainment streaming business, where the current “Best of Breed” is Netflix, Inc. (NASDAQ/NFLX). Amazon.com is new to the game here, but as my stock analysis suggests, its streaming service looks to be full of potential to battle Netflix.
One major plus: Amazon.com has a massive subscriber base through which to cross-sell its products and services.
The bottom line: you don’t bet against Bezos and Amazon.com may be a good investment opportunity for the long run, based on my stock analysis.