Bricks and Mortar Died. Where Did It Go?

NEW YORK (TheStreet) -- The fourth quarter of 2013 has not been kind for many retail stocks. Promotions pressured companies during the holiday season, a time when many retailers make a large portion of their annual sales. 

Some traditional retailers slipped by unscathed, but many did not. As a result, their share prices are getting shellacked when they report earnings or issue negative preannouncements. 

"Promotional, promotional, promotional." It's all we've heard since December in regard to the retail sector. Analysts knew it, the companies knew and we knew it. 

So why didn't investors prepare for such a disaster? I don't know. Perhaps the broader stock market's outperformance reassured them. Or perhaps it was the correct sense that the economy and the consumer are still intact.

What I do know is why the traditional retailers are getting hurt.

The tides have officially turned in favor of online shopping following the 2013 holiday season, as  Amazon ( AMZN) has become the go-to place for shopping. 

The company sold 37 million items on Cyber Monday, a 44% surge from the year before. On Black Friday, sales for the online retailer rose 35% year over year. eBay's (EBAY) sales increased 32% year over year on Cyber Monday, and 39% on Black Friday.

Amazon's sales from Thanksgiving through the third week in December were up 25% year over year, while eBay's were up nearly 10%. 

In general, online sales were on the rise, and specifically, mobile sales have at last seemed to increase in a meaningful way. The Friday-through-Sunday weekend before Christmas makes up three of the four top shopping days in the U.S. (the other being Black Friday). 

According to the Wall Street Journal, in 2013 online sales increased 37% year-over-year that weekend, while mobile sales increased 53% and accounted for 21.5% of all online sales. However, during that same period, in-store sales fell 3.1%, and store traffic dropped 21%.

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