Morningstar Advisor - August/September 2013 - (Page 30)
Sector Rap
Shopping in the Digital Age
By Basili Alukos
Amazon and eBay are the clear online leaders, but brickand-mortar stores aren’t ready to concede the retail battle.
More and more shoppers continue to go
online to find their wares instead of traveling
to traditional brick-and-mortar stores.
E-commerce retailers that are well-capitalized
and that have a strong distribution infrastructure are proving to be a disruptive factor
in the retail industry. In 2012, online sales in
the United States totaled $225 billion,
with Amazon AMZN representing almost a third
of that in terms of gross merchandise volume.
EBay EBAY had a gross merchandise volume of
about $75 billion. Globally, e-commerce
sales are around $1 trillion. But with total
30 Morningstar Advisor August/September 2013
global commerce at $10 trillion, e-commerce
still only has a small piece of the retail
pie. Amazon and eBay both have been enjoying
revenue growth of more than 20%, and
there’s still plenty of room for these and other
e-commerce companies to grow.
To find out where e-commerce is headed, and
what traditional retail stores are doing to
defend their turf, I sat down with Morningstar
retail equity analysts R.J. Hottovy, Liang
Feng, and Paul Swinand. Our discussion took
place June 6.
Basili Alukos: In what areas is e-commerce
making the biggest dent in the sales
of traditional retail stores?
R.J. Hottovy: The commoditized retail
categories—consumer electronics, office
products, toys, books, where consumers don’t
care about the shopping experience and just
want the lowest price possible—have felt the
most pressure from Amazon and other online
players. Amazon is able to undercut pricing of
traditional retailers, simply because it doesn’t
maintain a physical storefront and historically
Table of Contents for the Digital Edition of Morningstar Advisor - August/September 2013
Morningstar Advisor - August/September 2013
Contents
Contributors
Letter From the Editor
Under Pressure
Has Your View of Bonds Recently Changed?
The Simple Life Cuts a Path to Prosperity
How Extended Is Your Bond Fund?
A Bond Contrarian Scours the Globe for Value
Investments á la Carte
Investment Briefs
Bond Market Behemoths
Shopping in the Digital Age
Shopping in the Digital Age
Diverse Crowd
Motor City Meltdown
Bond Convergence
Corporates Are Fairly Valued, but Opportunities Will Arise
A Legend Still Pines for the Good Fight
Greener Pastures
Forecasting Market Bubbles and Crashes
Forecasting Market Bubbles and Crashes
Home-Court Advantage
Overcoming Technophobia
These Funds Are Counting on Undervalued Sectors
Our Favorite Mutual Funds
50 Most-Popular Equity ETFs
Undervalued Stocks With Wide Moats
What Price Advice?
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