Black Friday's Plague on Retailers Could Make This Holiday Season Their Last

Everyone knows what Black Friday is. It's the day after Thanksgiving, when retailers kick off big sales events to get consumers into their stores.

And these days, most people know about Cyber Monday too, the Monday after Black Friday when online retailers and merchants entice shoppers with more sales.

What most people don't know is that when this holiday shopping season sets records for online sales, it will be the beginning of the end for at least a dozen brick-and-mortar retailers.

In other words, this Black Friday was Black Death Friday for some of your favorite stores, the companies that own them, and their stocks.

The Rubicon's been crossed. This is the end of retailing as we used to know it.

Here's how I know which retailers have one foot in the grave - and how you can profit from their demise...

The Game Has Changed

Online retailers aren't waiting for Cyber Monday to push sales anymore. Cyber Monday is now just another "big draw" day, like Alibaba Group Holding Ltd.'s (NYSE: BABA) "Singles' Day."

No online seller waited until Monday to launch sales when they knew every other retailer was trumpeting Black Friday sales.

Amazon.com Inc. (Nasdaq: AMZN), of course, launched Black Friday deals before Black Friday.

It sliced and diced prices in 30 categories of goodies, including toys, electronics, fashion, beauty, kitchen, and sporting goods. It was even better if you're a Prime member, because you got even earlier notice about deals.

And really, why go out shopping on Black Friday when Amazon's fulfillment and delivery options could have your merchandise delivered to you in the comfort of your home?

Shopping was even easier with Amazon's voice-activated Echo, and consumers who own one got an exclusive shopping window several hours earlier than the general public.

As far as missing out on items you might've forgotten you wanted, Amazon had that covered, too. Its mobile app could be set for "Watch a Deal" alerts to notify customers of a price drop, and it offered AR views (that's "augmented reality," for you mall shoppers) to see how items look in their space.

Not to be left behind, eBay Inc. (Nasdaq: EBAY) started offering Black Friday deals on Tuesday, Nov. 14 - a full 10 days before mall zombies make it out on the official Black Friday.

Adding insult to injury, eBay's even flagging prices on items that beat or match prices at Macy's, Kohl's, or other rivals. Talk about a frontal assault.

eBay said price-matching would continue through Cyber Monday, with no blackouts during the Black Friday shopping days.

Online retailers are smarter than ever before. They know exactly how to target the dying brick-and-mortar dinosaurs, and their firepower is devastating.

This Black Friday Was Many Retailers' Last Gasp

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For retailers, the two weeks leading up to Black Friday are all about advertising. According to Kantar Media, they spent $474.6 million last year and $488.4 million in 2015 during that period.

That spending likely increased this year, analysts say, because this year wasn't about letting shoppers know about upcoming sales. It was about giving them notice for sales that had already begun.

Amazon even struck "the urgency chord" by having a ticking clock next to some deals.

Competing brick-and-mortar retailers, of course, launched special prices early. But for them, advertising spending was more expensive and less effective than the targeted, direct advertising that online retailers are capable of.

And then there's consumer sentiment against retail openings on Thanksgiving Day. That negative impression of compromising family time for shopping sales doesn't translate to online retailers. Online, families can shop together at their dining room tables if they want to.

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Everything's changed for brick-and-mortar retailers - forever. This year's early push by online retailers will take the last breath away from more than a dozen retailers already on their last legs.

They'll do what they can to put on a brave face this holiday season, but we know what their advertising budgets are, what their cash flow looks like, and what their debt levels are.

The only thing we don't know is whether they'll be able to sell enough this season to keep their doors open.

With the earlier onslaught by online retailers stealing sales long before Black Friday, it will be just a matter of months into the New Year before bankruptcy announcements will be headline news.

Those dozen dying retailers are on our list at my Zenith Trading Circle service, where we track who's got the cash, the sales, the vendor credit, the debt, and the breathing room to make it through this year. Then we target the ones whose graves are being dug this holiday season.

Just last Friday, Zenith Members had the opportunity to score 117% on a retailer play they held for just four days, and they've had dozens of other triple-digit opportunities just like it. If you're interested in learning how we do it, you should click here while there's still time.

These retailers' demise won't be pretty. The plague that is online shopping for brick-and-mortar retailers will turn Black Friday into the Black Death for those dying dozen.

And we'll be profiting from their fall, all the way down.

The post Black Friday's Plague on Retailers Could Make This Holiday Season Their Last appeared first on Wall Street Insights & Indictments.

About the Author

Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.

The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.

Shah founded a second hedge fund in 1999, which he ran until 2003.

Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.

Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.

Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.

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