The last quarter of the calendar year is generally known for festivities and everything else that comes with it. The holiday season start from the end of October marking Halloween, Thanksgiving in November, Black Friday and Cyber Monday following shortly afterwards leading up to Christmas and New Year celebrations, there are a few opportunities to snap a few deals on the market too.

During this time people are doing more shopping, travelling, looking for bargains and looking forward to the holiday season.

Companies also prepare for the holiday rush and start stacking the shelves early especially with concerns about shortages in the Global Supply chain, there are concerns that items customers want this holiday season may not be available quickly enough. Amazon and similar companies hire more sale reps around this time of the year to help with the increased volume.

Retail Stores

As our spending habits have shifted more online, the number of brick and mortar stores have reduced but have not been entirely eliminated. If anything, Amazon has invested in more physical stores recently and that can be seen as a positive sign at least.

Beyond Amazon, there are other stores that have physical locations and some people will prefer to buy certain items in a physical store. 

During the festive period as people spend more these stores should see an increase in sales. In some places shortages has led to an increase in prices and demand at the same time. Companies are stacking their shelves with goods sooner rather than later and consumers are buying early rather than waiting so they are not caught up with the shortage.

Walmart, Amazon, Costco and CVS are among the largest brick and mortar retailers and there are several ETFs that track companies in this sector. 

XRT and RTH are two examples of ETFs in this sector and ETFs will be considered as they provide a low cost way for the owner to benefit from the performance of the stocks they track.

ETFs track the companies in the sector however the actual company stocks too can be considered.

Online Retail

It should come as no surprise that online retail will see an increase in sales during this festive period. The convenience of purchasing items from the comfort of our homes with a few clicks and having them delivered right to our front doors is something we are not ready to forgo anytime soon.

This space has a few big players such as Amazon, Alibaba, eBay and Etsy but also includes the brick and mortar retailers that provide an online option to their customers to purchase.

A few ETFs in this space to consider to make the most of any opportunities are IBUY, EBIZ, ONLN, CLIX and EMQQ should you wish to focus on Emerging Markets too.

Credit and Payment Processing Services

The rise of online purchases has also boosted companies that operate in payment processing services. These companies in simple terms allow you to pay for those items that have been purchased and are integral to the online shopping process.

In some cases they provide credit facilities which allow you to break down the payments into instalments or buy and pay later.

Companies such as Paypal, Klarna, Stripe and Amazon Pay are just a few out there are worthy a second look this holiday season.

ETFs in this space include IPAY, TPAY, FINX and ARKF; these tracks Fintech companies most of which deal in processing online payments.

Warehouse Processing and Storage

Another part of this process of purchasing items online is warehouse processing and storage. An increase in consumer spending can also lead to the amount of items warehouses will process and store until they are delivered to the customers.

In this space, REITs can be considered to see where opportunities are. A lookup for REITs or any ETFs will show a few companies in that space.

Delivery Companies

Delivery companies are the last hop between the warehouse and the knock on the door when we are handed that long awaited parcel. These companies are important to the logistical aspect of retailing and should see an increase in volumes during the holiday season and possibly onwards.

This is not on fundamental analysis however we can apply some of the principles here for example, an increase in the price of fuel will have impacting the bottom line of these delivery companies since the delivery trucks and vans run on some sort of fuel.

The size of this impact will vary from one company to the other depending on their business model and other factors.

The important thing to note is the mere fact that a company is delivering more items over the last quarter due to increase shopping volumes does not mean the company is in a healthy financial state.

Collect Plus, DPD, Hermes, Royal Mail and Amazon Logistics are a few companies in this space.

Final Note

The holiday season is a good time today closer attention to the market to find opportunities. These opportunities come about primarily due to consumer habits during this time of the year and how companies looks to fulfil those needs.

Shopping online and in store are therein drivers of volume for many businesses and despite the shortages and lockdowns, it presents an opportunity for companies to make a good profit.

Companies such as Paypal, Stripe, MasterCard, Visa or any others that help facilitate the retail transaction present opportunities that are worth considering.

Delivery companies are the last part of this process and they can also benefit from an uptick in volumes in this holiday season.

There are other sectors worth mentioning such as Travel, Airbnb, perhaps Airlines too but the uncertainty and complexity of the travel restrictions make it a bit challenging to determine if many customer are ready to deal with the extra checks required to travel these days.

The holiday period is a good chance to look at these sectors and companies in this sector and follow their performance over the coming months and maybe years. ETFs are one way to go about finding the sectors and provide an excellent way to benefit from the performance of the companies in that sector, diversify risk, all at a lower cost.