Retailers Best Placed to Profit from the Web

Some retail businesses like clothing and consumer electronics have seen sales slashed as as customers go online

Morningstar Analysts 25 November, 2013 | 7:05AM

Retailers have become more aware of the different ways consumers shop. While some retail business models have been largely insulated from e-commerce competition, others like clothing and consumer electronics have seen sales slashed as as customers go online.

As consumers continue to become more information-hungry and connected in a digital way, we believe we will see new and innovative ways for retailers to reach their clients over the longer term.

E-commerce leaders like Amazon (AMZN) and eBay (EBAY) have garnered quite a bit of attention the past few years as the most disruptive forces to traditional retailers to emerge in decades. Although we believe that these wide-moat e-commerce leaders will continue to gain market share, many traditional retailers have responded through competitive countermeasures in 2013, including price-matching efforts, proprietary product offerings, online order fulfillment in stores, store-within-store partnerships with key vendors, and other omnichannel and mobile commerce investments. In this report, we‘ve developed a framework to assess which retailers are best positioned to compete over the long haul. While no consumer discretionary name is completely immune to e-commerce competition, we believe investors can identify potential opportunities across the broader retail space through a thorough examination of the current playing field.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Amazon.com Inc3,161.02 USD-0.04
eBay Inc56.28 USD1.42

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