Time to get those wallets ready, because we’re about to go shopping. Whether you enjoy brushing shoulders with others at the store or prefer the comfort of your own couch, you will probably find yourself doing at least some shopping this November. Here’s what to expect from this e-commerce month, and how investors can look for potential stocks to invest in during this time.
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What’s coming this November
Every year, we tend to see an increase in shopping after Halloween. The stock market knows it as the Halloween Effect, a hypothesis that suggests stocks perform better between October 31 (Halloween) and May 1 than they do during the rest of the year. Post-Halloween days are also the time when many employers give out their yearly bonuses, leaving employees with more money to spend.
The month of November is known as e-commerce month, during which three of the most important and well-known shopping days take place. Billions of dollars are spent each year on Singles’ Day, Black Friday and Cyber Monday, and while some of us will be busy shopping, investors will follow sales numbers closely and will try to determine which stocks to buy.
Singles’ Day
November 11, or 11.11, started out as a day dedicated to China’s single people (hence all the “ones”) and quickly became a massive online shopping event. Although originally intended for Chinese audiences, in recent years, Singles’ Day has become an international phenomenon, with retailers throughout the world offering special discounts, sometimes for 24 hours only. Last year’s Singles’ Day ended in roughly $75 billion in sales for Alibaba alone1.
Those numbers are substantially higher than numbers in the US, as companies in China place greater emphasis on attracting international audiences to their celebration of online shopping. Some of China’s biggest players in the e-commerce industry can be found in eToro’s ChinaTech Smart Portfolio.
Black Friday
The first Friday after the American holiday of Thanksgiving, widely known as Black Friday, traditionally marks the beginning of the Christmas and holiday shopping season in the US. It got its name in the early 1960s, when police officers in Philadelphia used it to describe the chaos that resulted from large numbers of people storming the stores at once.
Nearly every retailer in the US offers sales and discounts on Black Friday, and many Americans use the day to shop. Last year, sales from online shopping alone surged 22%, reaching a record of $9 billion2.
Cyber Monday
Dedicated to online shopping, Cyber Monday follows its offline counterpart Black Friday in jumpstarting the holiday shopping season. Retailers in the US and across the globe offer special discounts and major sales, attracting both local and international shoppers. Last year, shoppers spent $10.8 billion3 on Cyber Monday, making it the biggest e-commerce day ever in the US.
The switch to online shopping as opposed to in-store shopping started before the pandemic, but there is no doubt that COVID-19 gave this trend a major boost. 66% of consumers say they increased their online spending activity during the pandemic4, and the average value of an order grew 20% to 40%.
Christmas time and post-Christmas sales
Holiday shopping does not end in November. It goes on well into December, peaking in post-Christmas days. The day after Christmas is known in some parts of the world as Boxing Day. Although it was originally intended as a day to give gifts to the poor, today, it is mostly associated with shopping, as stores cut their prices once Christmas is over.
How does the shopping season impact retail stocks?
The month of November presents not only shopping opportunities, but it can also be a good time to consider investing in e-commerce and retail stocks. In the US, Black Friday and Cyber Monday are considered indicators for the entire shopping season, and strong sales during those days can push companies’ stocks upwards. E-commerce giants such as Amazon, Alibaba, ASOS and others are expected to benefit from the November shopping frenzy.
Investing in e-commerce
On eToro, investors can explore the retail and e-commerce sectors via the ShoppingCart Smart Portfolio. With some of the world’s biggest retailers on file, ShoppingCart is a diverse portfolio of e-commerce stocks.
Some of the highest-profile e-commerce stocks in the portfolio are:
- Amazon: The world’s largest online retailer, which reached a market cap of $1.77 trillion in 2021.
- Revolve: Established in 2003, this Internet retail company specialises in high-end clothing, accessories, and beauty products.
- eBay: This veteran online commerce platform connects buyers and sellers from around the world.
- Etsy: A global marketplace for creative goods and related services, Etsy’s market cap is currently valued at $33 billion.
- And many others…
eToro users looking to gain exposure to a diversified portfolio of e-commerce stocks, can start by checking out the ShoppingCart Smart Portfolio.
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Sources:
- https://edition.cnn.com/2020/11/10/tech/singles-day-2020-alibaba-intl-hnk/index.html
- https://www.cnbc.com/2020/11/28/black-friday-2020-online-shopping-surges-22percent-to-record-9-billion-adobe-says.html
- https://www.cnbc.com/2020/12/01/holiday-2020-shoppers-spend-10point8-billion-on-cyber-monday.html
- https://www.investopedia.com/how-shopping-habits-changed-due-to-covid-5186278