Bet on Brick-and-Click Retailing With These ETFs

Amazonization may have dealt a blow to department stores causing them to reel under pressure, but all is not lost yet from the brick-and-mortar space. Several traditional brick-and-mortar retailers have strengthened their presence in the digital space over time and are now trying to catch up with Amazon AMZN.

In fact, the frequency of people buying items on Amazon six times or more per month has declined to 40% this year from 80% in 2017, according to surveys by First Insight, as quoted on CNBC. A survey shows that 55% of population are preferring Walmart WMT to Amazon for their shopping this year, up from about 47% a year earlier (read: Gearing Up for Holiday Season: Amazon Versus Walmart ETFs).

Physical Stores Yet To Lose Charm

Not only success of Walmart’s digital drive, but also fears of the death of brick-and-mortar seem exaggerated. A huge share of shoppers is planning to hit physical stores this holiday season. RetailMeNot data shows that 80% of consumers plan to go into a physical store for gift shopping in December.

About 58% of shoppers report that in-store product availability will be one of the top influences on their holiday purchases this year. Additionally, in-store surfing frequency is rising too, as 25% is likely to check stores more often this year than last.

Brick-and-Click: A Hot Shopping Mode This Year?

Consumers are also open to a brick-and-click hybrid experience as about 54% Americans say they go for BOPIS (Buy-Online-Pick-In-Store) purchases which gives them scope to look for more deals or discounts. According to a case study from Adobe Analytics, the volume of BOPIS grew 73% between Thanksgiving to Black Friday in last holiday season. Adobe also found last year that 60% of millennials want to go to a store first, and then shop online.

Target TGT has been seeing success through this mode of service. Comparable digital sales were up 31% in the third quarter, where 80% of the retailers’ digital growth was driven by customers’ use of same-day services, like Drive Up, which transports packages to shoppers’ cars. Moody’s expects Target to be on its way to record solid holiday season sales.

Investors should note that the holiday season this year is six days shorter. As a result, last-minute digital shoppers will evidently flock to retailers that offer click-and-collect or BOPIS option and avoid any kind of delay in delivery.

Salesforce predicts that e-commerce sites offering click-and-collect are expected to record 28% more revenue share, on average, during the last five days of the season compared to those that do not have that service, as quoted on mytotalretial.com.

ETFs in Focus

Against this backdrop, we believe that it will be prudent to bet on brick-and-click retailing this holiday season instead of only online or offline retailing. To do so, investors have ETFs like SPDR S&P Retail ETF XRT, VanEck Vectors Retail ETF RTH, First Trust Nasdaq Retail ETF FTXD and Invesco Dynamic Retail ETF PMR at their discretion (see all Consumer Discretionary ETFs here).

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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
VanEck Vectors Retail ETF (RTH): ETF Research Reports
 
SPDR S&P Retail ETF (XRT): ETF Research Reports
 
First Trust NASDAQ Retail ETF (FTXD): ETF Research Reports
 
Invesco Dynamic Retail ETF (PMR): ETF Research Reports
 
Walmart Inc. (WMT) : Free Stock Analysis Report
 
Target Corporation (TGT) : Free Stock Analysis Report
 
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