Amazon’s (NASDAQ:AMZN) annual Prime Day has become an icon in the retail world.
A few years ago, Prime Day wasn’t even a thing. Now, it is one of the biggest shopping events in the world! It’s such a large shopping event, and it has grown so quickly, that Prime Day has some significant investment implications.
First off, investors want to judge whether or not Prime Day performed well relative to expectations to see whether Amazon remains an e-commerce juggernaut. Secondly, investors also want to see what sold well on Prime Day to glean insights as to where consumer demand is strongest.
With that in mind, here’s a list of three winners and one loser from this year’s Amazon Prime Day:
Amazon Prime Day Winner: Amazon (AMZN)
Perhaps it goes without saying, but the biggest winner from Prime Day is the event’s host, Amazon.
Despite website glitches and worker strikes, third-party data and Amazon statements have come together to paint a picture that Prime Day was a huge success for Amazon. According to algo-commerce company feedvisor, total sales in the first 12 hours of Prime Day were up 89%, versus an 80% gain in the prior year. Google Tends shows a huge spike in search interest to all-time highs for both “Amazon.com” and “Prime Day“.
Meanwhile, Amazon said in a press release that more than 100 million products were purchased worldwide during Prime Day. They also said that the best selling products of those 100 million were Amazon products like Fire TV Stick and Echo Dot.
Thus, not only did Prime Day generate a ton of sales through Amazon’s e-commerce platform, but it also helped Amazon sell a ton of its own products. That is a double win for Amazon, and it comes despite noise in the background from website glitches and worker strikes.
What does all this mean? The Amazon e-commerce powerhouse remains as strong, as important, and as irreplaceable as ever.
Amazon Prime Day Winner: Royal Philips (PHG)
In the world of smart devices, everything is going smart. We aren’t just talking smartphones and smartwatches, but also smart appliances.
The smart appliance market is admittedly limited in scope at the present moment. But there are pockets of it that are booming, and one of those pockets that is booming is the smart lighting category.
Smart lights have been a consumer favorite for some time now. This popularity continued on Prime Day. Philips Hue smart lights and related appliances, made by Royal Philips (NYSE:PHG), were a top seller on Prime Day across multiple countries, including the United Kingdom, Netherlands, Belgium, and Australia. Also, PHG’s smart toothbrush was the top top-selling item on Prime Day in China.
What does all this mean? Clearly, PHG is at the forefront of the smart appliance trend. In many respects, that makes PHG stock an Internet of Things (IoT) stock with huge growth drivers on the horizon.
Indeed, PHG’s growth strategy is all about the connected health market, and consequently, results have been quite good for the past several years. That is why PHG stock has nearly doubled over the past two years. Further gains seem possible considering the huge tailwinds in connected health and smart appliances.
Amazon Prime Day Winner: Sony (SNE)
The PlayStation gaming console, made by Sony (NYSE:SNE), had a strong showing on Prime Day.
PlayStation gaming consoles, games, and related accessories and memberships were top-sellers on Prime Day across multiple countries, including Germany, France, and Australia. In Australia, PlayStation made a particularly strong showing with the top two selling items (a PlayStation 4 gaming console and the FIFA 18 game for PlayStation 4).
What does all this mean? Sony isn’t purely a gaming company. But, games are a big part of what the company does. This business has been doing well, thanks to growing demand for next-gen video game consoles as well as the explosion in eSports and the huge digital shift in the video game industry. With augmented and virtual reality catalysts right around the corner, this business also promises to keep doing well over the next several years.
A strong PlayStation showing on Prime Day simply bolsters the bull thesis on Sony’s gaming growth prospects. As such, it looks fairly certain that Sony experiences strong growth in gaming over the next several quarters and years, and that this growth helps power SNE stock higher.
Amazon Prime Day Loser: Newell Brands (NWL)
The biggest loser from Amazon Prime day is Newell Brands (NYSE:NWL), the company behind the once mega-popular Crock-Pot.
The Crock-Pot has been on its way out for a few quarters now. The new fad centers around multipurpose cookers like the Instant Pot, which are widely viewed as more versatile and less dangerous. Indeed, over the past several quarters as Instant Pot has stolen market share from Crock-Pot, NWL has reported sluggish sales growth and even reported negative core sales growth in the past two quarters.
Prime Day suggests there is more pain ahead for NWL stock.
The Instant Pot, which was the top-selling Prime Day item in the U.S. and Canada in 2017, was again the top-selling Prime Day item in the U.S. and Canada in 2018. Considering the U.S. and Canada are presumably two of Amazon’s biggest markets, Instant Pot nabbing the top-selling spot means that a lot of Instant Pots were sold through Amazon on Prime Day.
What does all this mean? The Crock-Pot continues to lose popularity, and that will continue to show up in NWL’s numbers. Bad numbers usually lead to a weak stock, so I think there is more weakness ahead for NWL stock.
As of this writing, Luke Lango was long AMZN and PHG.