A post-Thanksgiving case of food coma didn’t stop online shoppers as Black Friday reached record sales last week, which could have a spillover effect into Cyber Monday as retail exchange-traded funds (ETFs) could stand to benefit even further.
ETFs like the Amplify Online Retail ETF (NasdaqGM: IBUY), SPDR S&P Retail ETF (NYSEArca: XRT) and ProShares Online Retail ETF (NYSEArca: ONLN) were boosted by the strong showing for holiday shoppers on Black Friday as online sales reached a record total of $6.22 billion based on data from Adobe Analytics.
They are also forecasting that Cyber Monday could reach a record $7.8 billion in sales, which represents a jump of 18% from last year. As of 12:00 p.m. ET, IBUY gained 0.77%, XRT was up 1.14% and ONLN rose 2.63%.
“At a high level, we believe Black Friday week was a success, one that should give investors a little more confidence as we move deeper into holiday,” said Wells Fargo analysts, who also noted that last week’s Black Friday has been the strongest since 2013. “On top of the solid traffic, what we found to be equally as compelling was a fairly consistent pricing cadence during (Black Friday week).”
The sales increase speaks to the obvious shift of consumer spending habits from brick-and-mortar retail to the convenience of online shopping as Adobe Analytics also reported that half of the $6.22 billion in sales came from mobile devices like smartphones. Furthermore, shoppers were more inclined to use their mobile devices to locate deals and make purchases.
“For merchants, this portfolio of connected devices represents an unprecedented opportunity to capture and convert consumers into customers wherever they are, and whenever they happen to be in the mood to make a purchase,” said Karen Webster of PYMNTS.com. “In fact, Adobe reported that 49 percent of online traffic on Black Friday was generated by smartphones, and the devices were used to turn 30 percent of all online purchases into sales.”
This constant year-over-year migration from brick-and-mortar to online was evident as visits to physical retail stores was down for a fifth straight year, according to a Wall Street Journal report. However, the drop in 2018 wasn’t a steep drop-off from 2017 as consumers still use physical stores to purchase items they know are in stock or want to view an item prior to purchasing it online for a better price.
“Today, visits to physical stores are about the consumers’ certainty – even before she arrives – that what she wants to buy is in stock and available for her to purchase and walk out holding in her hands,” Webster noted.
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