Consumers were not deterred away from holiday spending over the Thanksgiving weekend due to the pandemic-induced economic recession. The National Retail Federation (NRF) estimated that 186.4 million consumers took advantage of deals offered throughout holiday weekend shopping events, shopping both in-person and online.
"As expected, consumers have embraced an earlier start to the holiday shopping season, but many were also prepared to embrace a long-standing tradition of turning out online and instore over over Thanksgiving weekend to make gift purchases for family and friends," said NRF President and CEO Matthew Shay in the firm's annual survey conducted with Prosper Insights & Analytics. "Many things have changed since the onset of the pandemic, but the commitment by retailers to meet the consumer where, when and how they shop at the prices they want to pay never changes."
Amazon (NASDAQ: AMZN) moving its Prime Day deals to October prompted other major retailers to provide deals all throughout October and November. Consumers welcomed the early holiday savings, with 52% of those surveyed saying they took part in the early promotions.
Retailers also encouraged more ecommerce shopping by offering services like curbside or in-store pick-up, which evolved brick-and-mortar locations into pseudo-warehouses which helped facilitate stay-at-home trends while taking pressure off delivery services.
Consumers were more eager towards online shopping this year compared to prior years. The trend most likely extended from the year's shift to home delivery for retail and essential goods amid pandemic related business closures and other efforts to keep people in their homes. The NRF survey estimates that 44% more consumers shopped only online this year compared to 2019, totaling 95.7 million.
In addition, Black Friday and Saturday shopping saw tremendous growth in online shopping, with online Black Friday shoppers surpassed the 100 million mark for the first time ever. Compared to last year, Black Friday saw an increase of 8% in online shopping, while Saturday rose 17%.
For Cyber Monday, holiday shoppers spent an estimated $10.8 billion, setting a record for the largest U.S. online shopping day ever, according to Adobe Analytics data.
The NRF forecasts that holiday sales throughout the season will increase over last year by 3.6% to 5.2%, with total sales falling between the range of $755.3 billion to $766.7 billion. The firm also expects online and all non-store sales to increase between 20% to 30% year-over-year. The NRF defines the holiday season as Nov.1 through Dec. 31.
The survey added that 91% of consumers intend to continue shopping beyond Thanksgiving holiday deals.
ETF Check-In
Since consumers are expected to continue to do the majority of their holiday shopping online this year, investors can easily benefit from exchange-traded funds that provide broader exposure to the online retail market. Here's three funds set to benefit from global online shopping adoption:
Amplify Online Retail ETF (NYSE: IBUY)
IBUY tracks an index of global companies that make the majority of their revenues through online retail. The fund holds about 40 stocks in its portfolio that are weighted across market capitalizations, with its biggest sector holdings being internet services and department stores. IBUY currently commands about $1.21 billion assets, but is sold at a premium compared to other broad retail ETFs with an expense ratio of 0.65%. IBUY is currently up over 106% for its year-to-date.
Global X E-Commerce ETF (NASDAQ: EBIZ)
EBIZ tracks a market-cap-weighted index of global ecommerce companies, including ecommerce platforms, internet software providers, and other online retail names. The fund has over $123 million assets under management from about 40 holdings. EBIZ charges a reasonable fee for its exposure, with an expense ratio of 0.50%. The fund is up about 69% for its year-to-date.
ProShares Online Retail ETF (NYSE: ONLN) 99%
ONLN tracks a global, modified market-cap-weighted index of online retailer stocks. The fund provides concentrated exposure with about 27 stocks totaling $821 million assets under management. Like the two funds above, ONLN's top sectors are department stores and internet services and has an expense ratio of 0.58%. ONLN is currently up over 99% for its year-to-date.