A slew of data points confirm that many shoppers are using online venues for holiday purchases, a theme that could potentially benefit some exchange traded funds.
Shopping and consumer trends are changing as more buyers rely on the convenience of online retailers to quickly and easily meet their discretionary needs. As the retail landscape changes, investors can also capitalize on the trend through exchange traded funds that target the e-commerce segment.
With the rise of online retailers or e-commerce, many retail stores are seeing less foot traffic. The ProShares Decline of the Retail Store ETF (NYSEArca: EMTY) and ProShares Long Online/Short Stores ETF (NYSEArca: CLIX) both take a short position in brick-and-mortar retail stores to capitalize on weakness in traditional stores. Meanwhile, the ProShares Online Retail ETF (NYSEArca: ONLN) takes on a long position in online retailers.
ONLN, which debuted last July, follows the ProShares Online Retail Index. The ETF holds 21 stocks with an average market capitalization of $70.42 billion, according to issuer data.
Impressive Data
“Already this holiday season, a record $110.6 billion has been spent online, an increase of nearly 18 percent from a year ago, according to a new report,” reports CNBC. “By this time last year, $93.9 billion had been spent online since Nov. 1, said Adobe Analytics, which tracks the web transactions of 80 of the top 100 internet retailers in the U.S.”
The spate of bankruptcies from brick-and-mortar retails stores could be spooking investors as companies like Sears Holdings filed for bankruptcy protection last month after 125 years in business. However, some data points could support an uptick in consumer spending.
“ONLN’s strategy pinpoints retailers that principally sell online or through other non-store channels, such as mobile or app purchases, and separates them from those reliant on bricks-and-mortar stores,” according to ProShares.
Online sales this holiday season are expected to top $125 billion with more shoppers using mobile venues to make purchases.
“Adobe said mobile transactions this holiday season have so far reached $33.3 billion, up 57 percent from a year ago,” according to CNBC.
For more information on the consumer sector, visit our consumer discretionary category.