Amazon (AMZN - Free Report) continues to gain significant momentum in this holiday season, courtesy of robust e-commerce platform and aggressive retail strategies.
The company’s recent announcement of record-breaking holiday sales hints at an outstanding performance in this season. This bodes well for Amazon’s heavy spending on each of its holiday initiatives.
Notably, the company experienced robust sales in product categories such as toys, electronics and fashion.
Further, the company witnessed strong performance of its own brands like Amazon Essentials, Goodthreads, Daily Ritual, AmazonBasics, Amazon Elements and many more during the season.
Additionally, Amazon Devices exhibited more sales compared with the year-ago period. The all-new Echo Dot, Fire TV Stick 4K with Alexa Voice Remote and Echo products were some of the best-selling devices.
The e-commerce giant adopted several initiatives to efficiently cater to the growing demand of the customers during the peak season.
Apart from the online retail platform, it expanded its physical presence rapidly by rolling out Amazon Go stores at several locations to ramp up sales in offline retail in the season. The cashier less feature of these stores prevented the customers from the holiday shopping rush and long queue.
Further, Amazon 4-star, Amazon Books and Whole Foods Market stores gained traction.
Additionally, the company made shopping easier for the customers by equipping Alexa with shopping skills. Also, utilization rate of Alexa Shopping tripled this year from the year-ago tally.
Also, shopping rate by customers using Spanish language on the company’s e-commerce site doubled from the year-ago tally, owing to the integration of Spanish language in Amazon.com.
All these initiatives along with the company’s distribution strength, vast product portfolio and deep discounts on products aided performance.
Prime: Key Catalyst
Amazon Prime is the key catalyst for the company’s robust holiday sales that were driven by customer-friendly offers, cashback benefits and efficient delivery services.
The company continued to witness acceleration in Prime adoption rate. Notably, millions of customers across the globe opted for paid membership and utilized Prime free trials to avail FREE Same-Day, One-Day or Two-Day shipping and FREE two-hour delivery services.
This reflects the company’s strength in online retailing. Per a report from Mastercard, online sales improved 19.1% year over year from Nov 1, 2018 to Dec 24, 2018.
Amazon is well poised to capitalize on such prospects with the help of Prime program.
We believe that record breaking sales along with increase in Prime paid membership during the holiday season are likely to drive the top line. This is expected to aid the company in exceeding sales guidance for the current quarter.
Zacks Rank & Stocks to Consider
Currently, Amazon carries a Zacks Rank #3 (Hold).
Few better-ranked stocks in the broader technology sector are TripAdvisor (TRIP - Free Report) , Etsy (ETSY - Free Report) and Stamps.com (STMP - Free Report) . While TripAdvisor sports a Zacks Rank #1 (Strong Buy), Etsy and Stamps.com carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for TripAdvisor, Etsy and Stamps.com is pegged at 14.05%, 15% and 15%, respectively.
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