Amazon, the world’s biggest online retailer, is running away with the holiday sales crown, according to the latest figures. Meanwhile, price transparency mechanisms such as Google, Bing, various Apple apps and the mobile web are turning everyone into window shoppers at the local mall and buyers at home.
"There has been a notable shift toward online shopping, which shows that although consumers have become more willing to spend, they are still searching for the best discounts which can be found online," said Michelle Meyer, Bank of America Merrill Lynch economist, in a note Tuesday. "We expect this trend of greater comparative shopping to persist."
Online holiday spending is up a whopping 14 percent from last year, according to Bank of America. Amazon (AMZN) shares are up 11 percent in the last month, more than double the four percent gain in the Retail HOLDRS ETF (RTH). (Note: Amazon is also a member of this ETF so the gains are even bigger when you back it out.)
"I mean who in their right mind elects to buy at Best Buy when then can get free shipping and no taxes on Amazon?" asks Jon Najarian, co-founder of TradeMonster.com and a ‘Fast Money’ trader. "I only buy underwear and socks at TJ Maxx, everything else — ties, shirts, slacks, sports coats – I buy online with zero tax."
On Wednesday, Best Buy, the world’s largest electronics store chain, posted it’s biggest single-day stock loss in eight years after saying discounting on flatpanel TVs, notebook computers and gaming was killing margins. And yet it still lost market share.
With online information as the invisible driving force, Wal-Mart, Target, Best Buy, Kohl’s, Macy’s and others found that overly ambitious pre-Thanksgiving discounts didn’t quite take as smart shoppers are using their Red Laser and other mobile apps to see which store in their neighborhood can go lower.
"There remains a significant amount of business still ahead of us in the holiday selling season and we don’t have complete visibility to how customers will behave over the next several weeks," said Jim Muehlbauer, Best Buy’s CFO, in the company’s earnings release.
Eleven days left and it seems the retail stores don’t know what hit them.
"I’m not really surprised since shoppers delay more often, particularly on big ticket items, waiting to see where pricing will bottom closer to last minute," said Stephen Weiss of Short Hills Capital. "So the consumer has been rewarded for patience without any risk of paying higher prices."
To be sure, the brick and mortar stores like Wal-Mart are plowing more and more money into their own online sites. Best Buy was quick to note during its conference call that it had 40 million site visits from Thanksgiving through Cyber Monday. Too bad many of those visitors were just price checking.
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John Melloy is the Executive Producer of Fast Money. Before joining CNBC, he was an editor for Bloomberg News, overseeing the U.S. Stock Market coverage team.