This earnings season we saw the Amazon effect pulverize tons of retail stocks. The latest victim is DICKS. All these stores are losing pricing power. Investors have responded by rage buying AMZN shares. Who else drives deflation and can thrive in an Amazon World?
The distribution center retailers. Costco will succeed. You shop inside their distribution centers. What a twist! Walmart will win. They have a huge web presence and massive DCs. Jeff Macke says Target should convert most of their stores into DCs if they want to be around in a decade.
Amazon will succeed. They are leading the way in DC automation. They are building a huge center in downtown Detroit and hardly hiring anyone. EFFICIENCY!
I think Alibaba succeeds also. This depends on the consumer falling in love with Ali Express. Ali Express does not have the business-to-business feel of regular Alibaba, it sells China wares a la carte. It is literally the Chinatown of the internet. Every city has a Chinatown, why should the internet be any different?
I have not held share of BABA in a long time. However, I know skepticism is high because last year they peaked out after Singles Day. I like when sentiment like that resonates. It helps me catch people flat footed.
I cannot chase Amazon; I can’t do it. You do it. But I like the idea of taking Walmart and Alibaba long term positions to expose myself to the major retail transition theme.
Comments »
