Chart: Retail Apocalypse 2017

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

The steady rise of online retail sales should have surprised no one.

Back in 2000, less than 1% of retail sales came from e-commerce. However, online sales have climbed each and every year since then, even through the Great Recession. By 2009, e-commerce made up about 4.0% of total retail sales, and today the latest number we have is 8.3%.

Here’s another knowledge bomb: it’s going to keep growing for the foreseeable future. Huge surprise, right?

Signs of a Reckoning

Retailers eye their competition relentlessly, and the sector also has notoriously thin margins.

The big retailers must have seen the “retail apocalypse” coming. The question is: what did they do about it?

Well, companies like Sears failed the shift to digital altogether – in fact, it is even widely speculated that the former behemoth might file for bankruptcy later this year.

The majority of other companies, on the other

Amazon’s aerial dreams aren’t limited to drone deliveries.

In April, Amazon was awarded a patent (unearthed by a CB Insights analyst on Dec. 28 ) for Zeppelin-like warehouses in the skies. Amazon wants to create an “airborne fulfillment center” (AFC) to hover at altitudes of around 45,000 feet and spit out delivery drones with customers’ orders.

The designs suggest that the AFC will either be supported by an airship or incorporated into one. “An airship, or dirigible, is a type of aerostat or lighter-than-air aircraft which can navigate through the air under its own power,” the patent explains. “Airships gain their lift from gas that is less dense than the surrounding air, such as helium or hot air.” Not being fixed on the ground like conventional distribution centers has its perks: The AFC can change locations depending on factors likes weather and expected or actual demand.

Earlier this month, Amazon tested its first drone delivery in the United Kingdom, dropping off an Amazon Fire

Imagine shopping with no lines and no check out?  All you need is a smart phone with the AMZN app and you're ready to go.  Welcome to Amazon Go.  The first Amazon Go store in Seattle sells ready-to-eat meals, snacks and locally-prepared bakery items but just imagine if this came to your local grocer?  Amazing what technology will bring.

Some may say that technical analysis is 'bunk' but it's just that which caused me to short AMZN.  Now you can say they're #1 when it comes to online sales but my question is, has their growth hit a plateau?  Trading at 170x p/e, anything is possible. (click chart to enlarge).  Talk is that MSFT is bringing the smart home to Windows. The feature will allow Cortana to be summoned on any Windows 10 PC lock screen.  It's expected to appear in Win 10 updates starting in 2017 and this software-only feature could trump AMZN Echo and GOOG Home due to the obvious convenience of screen access.  From an investor point of view, I would definitely take some off the table at this point and invest it in banks, industrials and insurers.  But let's take a look at sales.  No growth in 2016?  Now that's interesting.

Amazon sports some pretty startling numbers. Let’s dive into various reports for a close look.

Amazon captured 31% of online spending over Cyber Weekend

CNBC reports Amazon captured 31%

The market for U.S. millennials is expected to blossom to $1.4 trillion by 2020, according to international consulting firm Accenture. While this generation of digital natives is already a primary marketing target today, in the upcoming years millennials will make up a hefty 30% of all retail spending in the country.

However, millennials are complex and notoriously difficult to read, even for professional marketers. With values that seem to contradict one another, it’s a challenge for companies to successfully gain market share with this audience.

As millennials mature, researchers are gaining ground on the needs and wants of this generation. This week’s Chart of the Week shares data from a comprehensive survey of 3,500 millennials that were asked, without any prompt, about their favorite brands over the past three years. The results, which can be found in deeper depth here, help give us some insight as to what millennials look for in a brand.

Tech Brand Disparity

It’s likely that no

I'm continually saving charts and data points which I find interesting but generally don't post enough to share the data.  That being said, I thought "wth" and decided to share some of my most recent.  Perhaps you can find a few of interest or maybe you can translate one into a trade.  It certainly can't hurt.  Your comments would be of interest and will be answered.  Happy trading.

Online shoppers by income group.  It certainly seems Amazon benefits by middle income buyers.  Possibly they just don't have the 'time' to shop in a store, working 60+ hours a week and balancing soccer games, football, cheerleading practice, dinner, laundry, etc.

Jet[dot]com is now selling some items at a loss to gain marketshare from Amazon

We've had numerous talks in Chat over coal usage (is clean coal an oxymoron or what?) and this certainly backs up the belief that natural gas continues to be embraced.

Then we have a look at Bear markets of 20% or more.The average # of months caught my eye. 

Things rising now are for the most part due to those (few) who see better earnings ahead, an earnings beat or rising on the struggling dollar........while peers get a definitely smaller bid....or none.  It's a struggle.  You'll notice more losing trades recently as markets are searching out the "good".  Some are talking recession (I don't buy that) while others struggle to find a way to get "through" the soft patch; waiting for 2016.  

In futures, volume has dropped off the cliff overnight.  It's amazing (and worth noting).

One things that's stood out for me is the increase in dividends and buybacks.  Yes, there's been an increase and new ones begun while O&G cut theirs.  Isn't it interesting how the market will do whatever it can to keep people in stocks.  Just sayin'.

AMZN is leading the Nasdaq with AAPL reporting this week but MRVL just announced a much lower 2015 than previously believed so computers seem a weak area.  Spot plays remain such as SNE who just raised their guidance ag

As more Americans find the price of their bundling packages too expensive to bear, there also lies a race between content providers in the background to grab their share of the streaming video market. 

Last month HBO announced they too will launch its streaming service in 2015.

Adding to the mix, online retailer Amazon.com Inc will release a new ad-supported video streaming service early next year, the New York Post reported, citing sources.  The new service will compete directly with Hulu and Netflix Inc, whose charges begin at $7.99 a month for customers in the United States.

HBO CEO Richard Plepler, provides insight to the company's evolving business model, and partnership with distributors.

"I don’t think it competes at all," Plepler said. "The most important thing to remember about our Amazon decision is its three-year-old window library and what we basically decided is somewhere in the neighborhood of 65 or 70 percent of Amazon Prime subscribers do not get HBO. So we thought this

You mean when you raise prices, it affects subscriber levels?  No one told Reed Hastings and nor did he forewarn the market of the drop which was coming.  NFLX already has streaming competition from HBO (TWC) and talk is being bandied about that CBS will be joining that pool along side AMZN and others and well, it all equals = more competition.  NFLX is no longer 'unique'.  Yes I am short this pos based off the technical divergences on the daily chart.  Burnt popcorn anyone?

When EBAY was blow torched this week after AAPL unveiled Apple Pay at their investor event on September 7th, I saw the knee-jerk fear that Apple Pay would take down PayPal as one to raise an eyebrow, however considering the possible number of iphone6 and Apple watch sales (because it won't be available on current Apple products) versus worldwide usage of PayPal, this would not something that would immediately destroy the EBAY name.  On Wednesday I jumped in on EBAY calls (cheap at that point) feeling the reaction was over done.

Booyah!  Was I glad today that I did.  Dumb luck is definitely better than no luck at all.

Not only are other market participants now beginning to question the depth of impact from Apple Pay (again only available on the new iPhone6 or Apple Watch), but it's overall security in a day and age of endless hackers when it comes to one's digital wallet replacing their plastic card and cash.

Then today the news hit when EBAY announced they are set to launch an

When Jack Ma founded the Chinese e-commerce company Alibaba in 1999, one of his stated goals was to build a company that will last for at least 102 years so that it would span from the 20th to the 22nd centuries. Now with products, technology and marketing -- what Alibaba has done is a great combination of all three.

Chinese ecommerce giant Alibaba ($BABA) is expected to begin an eagerly awaited roadshow for what could be the largest ever IPO early in the week of September 8, and its shares could list as soon as September 18 or 19, according to a person familiar with the situation.

Expected to raise about $20bn when it lists on the NYSE rivaling the Agricultural Bank of China’s $22.1bn IPO from July 2010, currently the largest on record.

Alibaba’s ability to make a transition to mobile has been a focus of analysts and investors as China’s tech groups square off for customers glued to smartphones. Last week, the company announced a surge in mobile revenues for the second quarter.

A tenf

Is Amazon's cloud play becoming gloomy?  Amazon, specifically Amazon Web Service (AWS) is in an out war with for the cloud with Google, Microsoft, and many, many others and it doesn't look as though these pressures are going to ease up any time soon.  Indeed everyone has or is (late bloomers) is getting into the cloud and of course, cost savings by having your own data servers is quite the enticement.

A quick look at the facts.

AWS sales dipped this quarter as Amazon announced Thursday that for its second quarter that the category that includes AWS saw a 3% sequential revenue slip. That “other” category — which also includes advertising services and co-branded credit card agreements — also logged 38% growth year over year which sounds fantastic until you realize year-over-year growth in the first quarter was 60%. There have been other slight quarterly dips in the category’s otherwise relentless rise over the past few years, but they’ve mostly happened between fourth and first quarters.

Jeff Bezos knows; continue to innovate, acquire and turn out new products.....or die.  Investors have rewarded the stock accordingly.  AAPL had the same growth and innovation.  When investors began to doubt, they rang the register until Tim Cook was able to convince them that all was well.  Great job Bezos - keep it up; or else. (click chart to enlarge)

Courtesy of Twitter

Off the 50week SMA which has been prior support.  If it works, I'll throw it in a drawer.  If doesn't hold that channel trend line, what does that say for the tech sector overall? Risking 10%  Click chart to enlarge.

Amazon.com has reshaped American commerce in just two decades. But how much of the online shopping empire’s success owes to innovation and entrepreneurial genius, and how much of it stems from cheating the system?

Without the loopholes it uses to avoid state sales taxes, new research shows, Amazon loses a substantial portion of its customers’ spending to alternative retailers. In five states that closed the sales tax loopholes that make Amazon’s prices more competitive than what in-state retailers can charge, the site’s sales fell by 9.5 percent.

For large purchases where the sales tax advantage would be most pronounced, the researchers found an even steeper drop in Amazon spending. When states close their online sales tax loopholes, “consumers decrease their spending by 15.5% on purchases larger than $150, and by 23.8% on purchases equal to or larger than $300.” These findings come from a National Bureau of Economic Research (NBER) working paper which examined data on millions of shop

• Amazon ($AMZN) is developing plans to roll out it's own payment solutions program to compete with PayPal ($EBAY) but sorry guys.........no Bitcoin is not part of their master plan. Note Amazong already has over 200 million credit cards already in their registered accounts.  This after plans came out the Facebook ($FB) is planning the same.  We have been accumulating EBAY for months but all of this is not good news for the online name.
• People's Bank of China disclosed it withdrew 172B yuan ($28B) through repurchase agreements. China's money supply grew at its weakest pace in over a decade during March. Shares of banks and brokerage firms in China stumbled on concerns of capital outflow. 
• Many will be watching for a follow through up day in the indexes today as the Nasdaq bounced off of February support.  If this is the case, watch for precious metals to take a beating.
• Investor confidence in Germany fell for a 4th straight month which has a depressing effect on sentiment because German

I've never been big on ordering online because I'm a touch-n-feel kind of consumer who still still prefers to read a package, try on my clothes, read an hard cover book, etc but will the typical consumer find the price hike too much?  Apparently JPM doesn't think advising that the loss of customers going form $79/yr to $99/yr. would more than be offset by the increased revenue.  BusinessInsider took a look at just how often you need to shop Amazon using their prime services and broke it down for us.

• Basically if you order 20+ items per year less than $35 each
• Order 10+ items per year over $35 each
• Comparable to NFLX cost in streaming video
• More expensive than Kindle by 1/3 at one book per month

Clearly anyone earning $7.25/hour is priced out of this product but isn't that they way things are going anyway? 

This comparison chart from Quartz speaks volumes.  We knew brick and mortar was dying a slow death but man...........

(click image to enlarge)

I see education in the future being done exclusively in the home Via the Web and Biometric ID or as I like to call em the "digital truancy officers." Also consisting of virtual hologram technology. Both on the lower and higher levels meaning pre-k on up to collegiate. Not only driven by advancements in technology, but combined with the vast data resources/info present NOW that would allow us to do so. And for sure within 10 years time. It's a shame that MIT professor Nicholas Negroponte's XO-Laptop or the "$100 Laptop for Every Child in the World Program" was just a little early. But not wasted nor in vain. Yet one of the Bush Family members is capitalising on the revamping of the computer aided education system not only in this country, but in the bombed out countries we invaded and destroyed their school systems in. A story for another time. The power that be were just too stacked against it along with where we were development and market release wise.. Also with the added catalyst o