Jim Cramer saw many portfolio managers scrambling to figure out where the consumer dollar is going these days, and it led them in a startling direction.
The biggest buzz on Wall Street on Wednesday was the shocking decline in business and stock of Macy's. While many investors did not expect Macy's to do well, the sharp sell-off in the stock took Cramer's breath away.
Macy's chairman and CEO Terry Lundgren acknowledged in the company conference call that the retail group is going through a difficult time and was clearly distressed over the situation.
And while there are plenty of positive signs in the economy such as lower unemployment rates and higher disposable income, Cramer says the sell-off in Macy's could have a large impact for the entire stock market.
Why does it matter?
Two-thirds of the economy is based on consumer spending. That means two-thirds of dollars are going somewhere, and if investors can figure out where the money is flowing than they can discover excellent investment opportunities.
The changes indicated in Macy's sales could allow investors to make bets on where the profits will be better than expected in the future.
"As I teach, every day, if you can find out where the profits are going to be above expectations, you can figure out what stocks might be best to own," the "Mad Money" host said.
The first step is to figure out if the problem is just with Macy's. Has management "lost it?" Cramer says not all is lost with the management of Macy's and thinks Lundgren is working harder than ever.
The next step is to take into consideration that the weather has been unusually warm, thus department stores like Macy's are filled with cold-weather gear that may need to be sold at an aggressive discount. That could make next quarter terrible, too.
But Cramer thinks there is a larger force behind the decline at Macy's.
"I think the consumers' habits have changed, and changed not glacially, but at lightning speed," he said.
Read more from Mad Money with Jim Cramer
Gone are the days when consumers go to their local mall to do all of their shopping. As a result, bricks-and-mortar companies like Macy's are feeling the impact. No wonder Amazon traded to an all-time high of $674 on the same day that Macy's stock fell back to 2013 levels.
The other problem with Macy's is that almost everything it sells can be purchased somewhere else. Cramer sees too many stores selling too many of the same goods.
Put it all together, and Cramer has discovered a secular shift in the way people shop these days. They have shifted from being a browsing mall shopper to being the user of a browser on a cellphone that buys the cheapest and most convenient goods.
It happened fast, and it is happening now. And, unfortunately, that shift is not happening at Macy's, or any of the old department stores in the U.S.