“According to Adobe Digital Insights, which aggregates data from 24.6 billion visits to the top 100 websites, the 2016 holiday season generated $91.7 billion in online sales, representing an 11% increase over last year,” according to a Seeking Alpha analysis of IBUY. “E-commerce sales as a percentage of total retail sales has been steady climbing, and now represents 8.4% of total retail sales. But if you think about it, that is still a relatively low percentage. There is still huge potential for growth!”
Last year, the internet retail sub-industry revealed the highest earnings growth at 143.1% for all 13 retail sub-industries, according to FactSet. In contrast, the department store sub-industry reported the largest year-over-year drop in earnings of all 13 retail sub-industries at -47.8%.
IBUY provides exposure to many familiar online names, such as WayFair Inc (NYSE: W), Etsy (NasdaqGS: ETSY), FTD Companies (NasdaqGS: FTD), Overstock Com Inc (NasdaqGS: OSTK) and Priceline (NasdaqGS: PCLN).
“In the battle between bricks and clicks, the clicks are clearly winning. Online commerce is not a “fad” but a nascent trend with legs for years to come. So investors in traditional retail ETFs, may want to reevaluate their exposure and consider an allocation to online retail to capture positive consumer spending trends, because that is where the future growth is. In increasing numbers, consumer dollars are not going to the mall, they are being spent online,” according to Seeking Alpha.
For more information on the retail sector, visit our retail category.