Did you set the alarm for 5 AM on Black Friday and bravely venture out to overcrowded stores in hot pursuit of the best doorbuster deals?

Yeah, me neither.

I did score a new belt at Dillard’s on my lunch break, but it wasn’t even on sale. Driving across town, I couldn’t help but notice that parking lots at local malls and retail centers were nowhere near capacity. If the data analytics folks are right, this same trend was probably noticeable in your neck of the woods as well.

According to Sensormatic Solutions, retail store traffic fell 28% from the same day in 2019 (pre-pandemic). Checkout lines were shorter than expected as well. Many who showed up to browse left empty-handed without any packages or boxes in tow (poor “conversion rates” in industry lingo).

Don’t read too much into it. Black Friday simply isn’t what it used to be. Retailers have become adept at luring shoppers into stores weeks before the turkey is carved. Whereas Thanksgiving used to be the official kickoff to the holiday shopping season, the big chains are now running promotional ads as early as Halloween to attract early-bird shoppers.

_{Source: Statista}

According to consumer surveys, 60% of consumers do the bulk of their shopping before Black Friday. In other words, most of what ends up under the tree has already been bought. Chalk it up to a behavioral shift. Speaking of which, many of those empty parking spots can also be attributed to the growing popularity of online shopping.

Remarkably, it’s estimated that nearly 9-in-10 U.S. consumers now conduct at least some (if not all) of their holiday shopping on the web. Retail websites have been clogged with visitors eagerly tossing toys, electronics, and other merchandise into their virtual carts. Between November 1 and Cyber Monday, virtual cash registers hauled in an impressive total of $109.8 billion — a healthy 12% increase over last November’s e-commerce sales.

And we’re only at the mid-way point of the season.

Social Media Meets Online Shopping

You can see why work productivity suffers this time of year. Between shopping and social media, it’s a wonder anything gets accomplished at all. When they’re not browsing Amazon or Target, consumers devote countless hours scrolling through Facebook, Twitter, and Instagram (maybe Snapchat or Tik-Tok for the younger crowd).

Personally, I’m not much of a social media user. But I’ve been spending some time in this space lately – all in the name of investment research, of course. And I think I’ve come across something big…

Browsing social media is almost a universal pastime by now. But things are reaching a whole new level, thanks to the confluence of trends… social media, advertising, retail, etc.

Let me explain…

Want to get ideas on how to decorate Christmas cookies? Or organize your kitchen pantry? Or throw the ultimate St. Patrick’s Day party? Or make a costume for a school play? You can find this on social media.

That’s always been true, of course. But thanks in part to Covid, the social media players are taking increasingly innovative approaches to make things “shoppable” on their platforms. And here’s why that’s important…

Statista projects that advertising on social media sites will reach $44 billion this year and could eclipse $50 billion by 2023. Such estimates vary by source, but they are invariably large – and growing. In fact, spending growth has accelerated to 16% in 2021 and averaged about 19% annually since 2017.

Social media sites now collect more than 30 cents from every dollar of digital ad sales.

Advertisers pay heavily to reach the massive pool of 3.8 billion social media users worldwide. But raw numbers are only part of the equation. Here’s what really has marketing execs salivating: the average user now spends two hours and 25 minutes per day on social media, versus mere seconds glancing at a highway billboard or listening to a radio spot.

A Hotbed Of M&A Activity

These businesses have become exceedingly efficient at monetizing their heavy website traffic and turning all those visits into recurring cash flows. Not surprisingly, many of them end up in the cross-hairs of an acquirer long before reaching their full potential.

— Remember the early mobile video-sharing site Vine, a pre-cursor to Tik-Tok? Fun fact: the app was acquired by Twitter back in 2012 before it even launched, and then went on to attract 40 million avid users over the next 12 months.

— Instagram was still a baby with just 30 million active users when Facebook saw the potential and dropped $1 billion to take control. The photo-sharing site has grown exponentially since then and now boasts 1.4 billion users (the world’s fourth busiest social media platform), accounting for a good chunk of the parent company’s revenues.

— Less than two years later, Facebook made an even splashier purchase, investing $19 billion in WhatsApp, a popular web-based messaging service. The deal is reported to have been closed at Mark Zuckerberg’s house over a bottle of Scotch.

— Not to be outdone, Microsoft agreed to pay $196 per share (a $26 billion bid) for LinkedIn, a social networking site for career-minded business professionals. Incidentally, the stock surged nearly 50% when the news first broke.

Action To Take

There are others, of course, but you get the point. There has been heavy consolidation in this space. And we haven’t seen the last of it. That’s one of the reasons why I’ve been following this sector closely. And I think I’ve found the next target…

Unfortunately, I can’t share the name of this pick with you today. I just covered it in the most recent issue of my premium Takeover Trader service. But mark my words, all of the major social media giants are looking for ways to make things “shoppable” in the interest of attracting more advertising dollars. And if a smaller player comes along that can offer a substantial advantage, expect to see rumors of takeover offers not too far behind.

My advice: Watch this space closely, because I think we’ll see more than a few takeovers in the months ahead.

In the meantime, I recently released a report with some shocking (and profitable) findings…

Officials have verified the discovery of the largest natural oil reserve in history. It’s so big, it could independently power America for the next 49 years… And one small Texas company is right at the center of this “black gold” boom.

You won’t find this talked about on the nightly news… yet.

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