With holiday shopping underway in a roller-coaster year, Capital Markets Analysts believes the prolonged impact of COVID-19 causing the full reopening of physical stores will extend into 2021, which should "almost certainly solidify the permanent changes in consumer behavior brought about by this pandemic."
As holiday shopping underway a result of the pandemic that began this past February in China. Capital Markets Analysts believe the prolonged impact of COVID-19 causing the delay of the full reopening of physical stores will extend into 2021, which should "almost certainly solidify the permanent changes in consumer behavior brought about by this pandemic."
Analysts expect strength to continue for Amazon, Netflix, Shopify, Pinterest, Roku, and potentially Facebook. Booking Holdings, Expedia, Lyft, Uber, and Trip Advisory--all within Travel and Ride Sharing--will take a bit long to recover.
The magnitude and longevity of the shift to ecommerce is yet to be fully appreciated by investors, analysts wrote in a research note published late Monday, but retailers and brands that have the capacity to quickly fulfill orders will also feel the bump.
“Particularly as we head into what is likely to be (unfortunately) a COVID Christmas,” analysts wrote. “Based on our industry checks, we believe [Shopify] and [Amazon] should continue to see elevated ecommerce sales above current Street expectations, and we also expect a boost to [Pinterest’s] topline growth in the back half from Social Commerce ads.”
COVID also will have a trickle-down effect on cloud services required to support ecommerce. A trend companies like Amazon, Google, Microsoft, Oracle and others will benefit from.
Amazon, for example, is pursuing expansion of its datacenter capacity in Europe, Asia, and United States based on ground purchases, datacenter leasing, and fiber procurement, which in the view of analysts at Capital Markets is positive for the growth of Amazon Web Services.
For Q3, Capital Marketers is looking for AWS revenue of $11.3 billion, up 26% year over year, despite the chaos that pledged the company this year, from counterfeit goods to a former Amazon employees being arrested for taking bribes to “prop-up sketchy merchants, products.”
Amazon advertising revenue proved the most resilient in the June quarter, according to Capital Markets analysts. The analyst firm estimates Amazon’s ad revenue growth to be about 40% in Q3, largely consistent with Q2.
Raymond James analysts see a similar trend. The firm recently surveyed about 600 consumers across the U.S. to gauge the impact on consumer behavior and ecommerce using during COVID-19.
Aaron Kessler, analyst at Raymond James, sees continued gains at Amazon Prime—73% today vs. 70% in January. He also pointed to lost ground by Google Search, 16% today vs. 23% in January. Amazon Prime kicked off the holiday buying season today.
Apple also is expected to launch its new iPhone 12 today in an
The ecommerce survey also noted that consumers expect to shift 11% of spending online, compared with pre-COVID-19. Shifts include 32% of online spend pre-COVID-19, 48% currently, 43% expectation post-COVID-19.