November is shopping season: How to invest in retail stocks this month

Many investors buy retail stocks because it gives them opportunities to own parts of the businesses where they shop. But just because you like shopping at a particular store doesn't mean it's a good portfolio investment.

For those that have some retail stocks, now it is time to get those wallets ready, because eToro are about to go shopping. Be it you enjoy matching shoulders with other customers at the store or prefer the comfort of your own couch, you may possibly find yourself doing at least some shopping this November. Below are some of what to expect from this e-commerce month of November, and how investors can look for potential stocks to invest in during this time to get the benefits.

Whats coming this November

Every year, we tend to observe an increase in shopping after Halloween. The stock market shopping after Halloween. The stock market named it as the Halloween Effect, an investigation that recommends stocks perform better between October 31 (Halloween) and May 1 than they do during the rest of the sessions per year. Also we can refer Post-Halloween days as the time when many employers dash out their yearly bonuses to their staff and clients, leaving employees with more money to spend for their needs. And it's known that, The month of November is popularly marked as e-commerce month, during which three of the most important and well-known shopping days take place. Billions of dollars are spent each year on Singles Day, Black Friday and Cyber Monday, and while some of us will be busy shopping, investors will follow sales numbers closely and will try to exermine which stocks is good to buy during that period of time. The three most well known shopping days of the year are:

1. Singles Day

The Singles' Day (simplified Chinese: 光棍节; traditional Chinese: 光棍節) or Double 11 (Chinese: 双11), originally called Bachelors' Day, is a Chinese unofficial holiday and shopping season that celebrates people who are not in relationships. The date, 11 November (11/11), was chosen because the numeral 1 resembles a bare stick (Chinese: 光棍; pinyin: guānggùn), which is Chinese Internet slang for an unmarried man who does not add 'branches' to the family tree.The four '1's also abstractly refer to the demographic group of single people.

Singles‘ Day has become an international phenomenon, with retailers throughout the world offering special discounts, sometimes for 24 hours only. Last year’s Singles Day ended in roughly $75 billion in sales for Alibaba alone1.

Those numbers are substantially higher than numbers in the US, as companies in China place higher emphasis on attracting international audiences to celebrate the online shopping with them. Amongst the China‘s biggest players in the e-commerce industry can be found in eToro’s ChinaTech Smart Portfolio.

2. Black Friday

Black Friday is a colloquial term for the Friday following Thanksgiving Day in the United States. It marks the start of the Christmas shopping season. Many stores offer highly promoted sales on Black Friday and open very early (sometimes as early as midnight), or some time on Thanksgiving Day. Also important to retailers: Cyber Monday, the first day back to work for many consumers after the long holiday weekend, and online retailers offer major discounts. It got its name in the early 1960s, when police officers in Philadelphia used it to describe the chaos that resulted from huge numbers of people storming the stores at once for shopping.

Almost every retailer in the US offers sales and discounts on Black Friday, and many Americans use the day to shop. Last year, sales from online shopping alone surged 22%, reaching a record of $9 billion2. And this year's Black Friday is soon to start.

3. Cyber Monday

Cyber Monday is a marketing term referring to the first Monday after the Thanksgiving holiday in the United States. Its a 24-hour online shopping event that was originally created by businesses to encourage people to do their shopping online and is now often regarded as an extension of the Black Friday sales. Cyber Monday 2021 will fall on November, 29. It's directly following Black Friday (26th), which in turn follows the prior Thanksgiving holiday (25th).

For Retailers in the US and across the globe offer special discounts and major sales, in order to attract both local and international shoppers at lower prices. As of Last year, shoppers spent $10.8 billion3 on Cyber Monday, making it the biggest e-commerce day ever in the US for the shoppers. The switch to online shopping as opposed to in-store shopping started before the pandemic, but there is no doubt that COVID-19 gave this trend a major boost. About 66% of consumers say they increased their online spending activity during the pandemic4, since they Can not go out for shopping rather than to place order from stores and the average value of an order grew 20% to 40% received from the clients.

4. Christmas time and post-Christmas sales

Also know that the Holiday shopping does not just end in November. It goes on well into December, peaking in post-Christmas days. The day after Christmas is known in some parts of the world as Boxing Day. Although it was originally intended as a day to give gifts to the poor, today, it is mostly associated with shopping, as stores cut their prices once Christmas is over to normal market.

How does the shopping season impact retail stocks？

The month of November presents not only shopping opportunities, but it can also be a good time to consider investing in e-commerce and retail stocks. If consumers follow up Thanksgiving by spending a lot of money on Black Friday and retailers show strong numbers, then investors might have their first indication that it is shaping up to be a particularly profitable shopping season. This confidence can be reflected in the stock prices of the retailers that post strong sales. Conversely, many take it as a sign of trouble if retailers are unable to meet expectations on Black Friday. Concern over the economy is magnified if consumers are perceived to be reining in their spending. In the US, Black Friday and Cyber Monday are considered indicators for the entire shopping season, and strong sales during those days can push companies stocks upwards. The biggest E-commerce such as Amazon, Alibaba, ASOS and others are expected to benefit from the November shopping frenzy every year.

Investing in e-commerce

eToro is a world known social trading platform, offering a wide array of tools to invest in capital markets. eToro, investors can explore the retail and e-commerce sectors via the ShoppingCart Smart Portfolio. With some of the worlds biggest retailers on file, ShoppingCart is a diverse portfolio of e-commerce stocks.

Some of the highest-profile e-commerce stocks in the portfolio are:

• Amazon: The worlds largest online retailer, which reached a market cap of $1.77 trillion in 2021.

• Revolve: Established in 2003, this Internet retail company specialises in high-end clothing, accessories, and beauty products.

• eBay: This veteran online commerce platform connects buyers and sellers from around the world.

• Etsy: A global marketplace for creative goods and related services, Etsys market cap is currently valued at $33 billion.

• And many others…

eToro users looking to gain exposure to a diversified portfolio of e-commerce stocks, can start by checking out the ShoppingCart Smart Portfolio.