Disruptive technology like artificial intelligence (AI) is definitely leaving an indelible mark amid a COVID-19 pandemic where social distancing measures are forcing more reliance on tech. The same can be said in the retail sector and as more consumers head online to do their shopping the retail industry is deploying AI to enhance the experience.

“Since the coronavirus outbreak, online retailers like Wayfair, Etsy Inc. and Pinterest Inc. are ratcheting up efforts to leverage data from a surge in e-commerce to get better at helping customers find what they are looking for—even when they don’t know what that is,” a Wall Street Journal article noted. “To do that, these Web-only stores are supercharging search-and-recommendation engines by feeding data into sophisticated algorithms, building predictive models with a level of accuracy unimaginable just a few years ago.”

“Not all of the capabilities are new—algorithms have been around for decades,” the article added. “But the rapid expansion of computing power and cloud storage in recent years has enabled sellers to gather and crunch data on a massive scale. Shoppers generate data on retail websites every time they place an item in a virtual cart, hover over product pages, click on product recommendations and ultimately make a purchase. Stores create more-robust customer profiles by adding their shoppers’ ages and genders, where they live, the local weather or seasonal events and holidays—and in some cases data drawn from all over the internet by third-party services.”

To capitalize on this trend of retailers using more AI technology, one ETF to look at is the VanEck Vectors Retail ETF (RTH). RTH seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the MVIS® US Listed Retail 25 Index.

The fund normally invests at least 80% of its total assets in securities that comprise the fund’s benchmark index. To be initially eligible for the index, companies must generate at least 50% of their revenues from retail. Retail includes companies engaged primarily in retail distribution; wholesalers; online, direct mail and TV retailers; multi-line retailers; specialty retailers; and food and other staples retailers.

RTH gives investors:

  • Access 25 of the world’s largest and most traded retailers
  • Technology and innovation are remaking the retail industry
  • Global online sales are expected to grow 85% from 2019 to 2023, led by many of the largest names

RTH Chart

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