The arrival of Amazon seems to have every investor and analyst in a tizz about what's going to happen.
It's true that some businesses will lose market share. It's true that a lot of businesses will see their profit margins reduced. However, I don't think it means the end of every retail-related share on the ASX.
In my opinion, the following four shares will continue to thrive over the next few years:
Afterpay Touch Group Ltd (ASX: APT)
Afterpay is taking the retail world by storm. It allows customers to pay for products with a series of payments instead of one lump sum.
A whole array of businesses have taken up Afterpay's services, two of the latest are Qantas Airways Limited's (ASX: QAN) Jetstar service and Wesfarmers Ltd's (ASX: WES) Target.
The one major issue I think could be a risk for Afterpay is that its loan book is rapidly expanding. This is a good thing for earnings in the short-term but could be bad in the long-term because most customers who are using Afterpay's service could be the first to run into trouble in a downturn.
Afterpay Touch isn't yet making a profit.
Greencross Limited (ASX: GXL)
Greencross is currently priced as though there isn't going to be much profit growth over the next few years. It's priced at 13x FY18's estimated earnings.
However, FY17's statutory revenue grew by 11.4% and underlying earnings per share grew by 5%.
Greencross is heavily investing in its co-location strategy which is a detraction to short-term profits but should be a big winner over the long-term in my opinion. Putting a Greencross vet in many of the Petbarn stores is a great idea to boost revenue by cross-selling and saving on rental costs.
I think pet owners will continue to buy from Petbarn in-store and from its online store rather than changing over to Amazon to buy all their pet needs.
Bapcor Ltd (ASX: BAP)
Bapcor owns many auto part businesses including Autobarn and Burson.
Autobarn's earnings may be somewhat disrupted but the bulk of Bapcor's earnings comes from Burson, with around 80% of earnings generated from Burson.
Mechanics rely on Burson's two-hour delivery service for parts so they can finish the job on-time for clients. I can't see this relationship or delivery being replicated by Amazon for a long time.
Burson is currently trading at 23x FY17's earnings.
Kogan is Australia's very own fast-growing online site offering a wide variety of products.
It may not have the product depth or other services of Amazon but it has the range of cheap products to compete.
Australian shoppers may continue to be drawn to the Australian-owned business and that differentiator could be what keeps Kogan winning in the retail wars.
Kogan is currently trading at 119x FY17's earnings.
Foolish takeaway
All four businesses should beat the market but I would be hesitant about buying Afterpay Touch and Kogan shares at the current prices.
Greencross and Bapcor both look like good value for the growth on offer in my opinion.
