ETF Trends CEO Tom Lydon discussed the ProShares Online Retail ETF (ONLN) on this week’s “ETF of the Week” podcast with Chuck Jaffe on the MoneyLife Show.
ONLN tracks a global, modified market-cap weighted index of stocks issued by companies classified as online retailers. The fund tracks the performance of the ProShares Online Retail Index.
The fund provides an ETF strategy for the new consumers in a digital age. Americans spent a record $188.2 billion in online shopping over the 2020 holidays, a 32.2% year-over-year increase, and more e-commerce gains are expected.
Looking at the holiday shopping season, eCommerce sales during November, which included Cyber Monday, reached $100 billion for the first time. In another first, online spending exceeded $1 billion daily during the 2020 holiday season, and 50 days topped $2 billion.
Retailers like Target and Dick’s Sporting Goods that offer curbside and other convenient pickup options for online orders saw even stronger sales over the holidays. Their digital sales were up an average of 49% from a year earlier, compared with a growth of around 28% for the retail businesses that didn’t have curbside pickup and similar options.
Moving on to digital shopping, eCommerce has come a long way. In the Coronavirus environment, digital has been a way for people to connect, work, be entertained, and shop. As Covid-19 cases continue to rise and more lock-down measures return, online spending could remain elevated, at least for the early part of 2021. Salesforce expects $330 billion in global online purchases to be returned following the 2020 holiday season, representing about 30% of total purchases.
Additionally, there’s the potential to capture broad shift in economic activity ahead. Online retail has fundamentally disrupted the sector, putting pressure on traditional stores and the changing retail landscape. It may only be the beginning: under 60% of the world’s population is currently online. However, mobile devices are proliferating—especially in developing markets—and potentially creating new e-commerce consumers. Improving incomes among emerging market consumers will also increase demand for goods, especially in areas where internet access is quickly proliferating.