The holiday shopping season has officially begun. For some people, there’s nothing like waiting on line for hours in the cold on Black Friday just to have the privilege of elbowing a fellow shopper out of the way. For the rest of us, true holiday cheer can be found as we bask in the warm glow of our laptop, tablet or smartphone to do our shopping.

What do this year’s sales numbers indicate? They confirm what we’ve been seeing for a long while: the way we shop has evolved. Online retail sales are growing significantly, while brick-and-mortar sales actually declined last weekend. Thanksgiving weekend sales were down almost 3% according to the National Retail Federation.1 Brick-and-mortar retailers were the main victims of that decline. Online retailers actually saw an estimated 20% pick up in year-over-year sales, a trend likely to carry through to the rest of the holiday season. Think about it: Cyber Monday wasn’t even around 10 years ago and now predictions are that sales could hit $2 billion this year.2 Interestingly, mobile sales accounted for almost 22% of total online sales during the weekend.

Shopping trends are not that different on the other side of the Atlantic, with retailers increasingly reliant on online spending to boost earnings. The British version of Cyber Monday, Mega Monday, serves as a kick-off of the holiday online shopping season. Total online sales in the U.K. are expected to hit $8 billion this year, up 19%.3 While the near-term numbers are impressive, it’s the long term that we’re most interested in. Across Europe, online retail sales are expected to reach €191 billion by 2017, implying growth of about 11% per year over the next five years.4

The Online Shopping Business Is Tricky

We think this divergence between online and brick-and-mortar sales can continue for the foreseeable future, creating opportunities as well as stumbling blocks for retail companies. In this brave new world where consumers can use their smartphones to compare products across a variety of retailers before even entering a store or going to a website, the right marketing, pricing and promotional strategy takes on even more significance. Rising consumer expectations about the timing and cost of delivery has major implications for logistics, and if Amazon manages to get a fleet of delivery drones in the air, the game will really be changed. And what of the huge real estate portfolio that many retailers are sitting on: how many stores do they really need and what size and where?

Most retailers, the smart ones at least, have been adjusting to this latest shift in consumer behavior for a while. The winners are going to be those retailers that create an online strategy not aimed at defending their market position, but at growing it. For equity investors, this means that stock selection in this industry is key. This is because not all retailers are positioned to capitalize. Whether offline or on, we look for companies that, among other things, can reap the benefits of a strong brand, have scalable distribution, an IT infrastructure that can handle the increasing complexity of the retail industry, and management that has a history of good capital allocation.

When it comes to global retail stocks-and getting gifts for loved ones-I say look for quality and “happy shopping.”

1Deutsche Bank – Black Friday Wrap, December 1, 2013.

2comScore – Crystal Ball: 5 Bold Predictions for the 2013 Holiday Season, November 19, 2013.

3CNBC – Online sales ‘to hit £5bn’ this Christmas, November 25, 2013.

4Forbes: U.S. Online Retail Sales to Reach $370B by 2017; €191B in Europe, March 14, 2013.