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The U.S. retail sector is returning to normalcy, driven by robust online sales. The Commerce Department said on Apr 15 that retail sales totaled $709.6 billion, growing 0.7% month over month in March, which easily surpassed the consensus estimate of a rise of 0.3%.
Year over year, retail sales grew 4% in March. Total retail sales for January through March climbed 2.1% from the year-ago levels. Excluding auto, retail sales rose 1.1%, also beating estimates of a rise of 0.5%. e-commerce played a major role in driving sales of the month. Online retail sales grew 2.7% sequentially in March.
The report also pointed out that e-commerce played a major role in driving sales. Online retail sales grew 2.7% sequentially in March.
Rise of Online Shopping Post-Pandemic
Since the onset of the pandemic, the preference for online shopping has surged as people adapted to the necessity of remote shopping. According to a Forbes Advisor report on e-commerce statistics, it is projected that 20.1% of overall retail purchases will be conducted online globally in 2024. Furthermore, e-commerce sales are expected to record a notable uptick of 8.8% in 2024. The global e-commerce market is forecast to reach $6.3 trillion by the end of this year.
E-commerce Growth in the United States
In the United States, online sales surpassed $1 trillion for the first time in 2022, marking a significant milestone. Since then, this figure has continued to rise steadily. The report predicts that the e-commerce market will exceed $7.9 trillion by 2027.
This data points to the importance of embracing e-commerce now as it is still an emerging opportunity. Digital Commerce 360's analysis of U.S. Department of Commerce data reveals that e-commerce's share of overall retail sales increased to 22% in 2023, up from 21.2% in 2022.
Wells Fargo CEO Charlie Scharf said during that bank’s latest earnings call, “spending patterns and consumers using our debit and credit cards remain generally consistent and continue to grow year over year,” as quoted on pymnts.com. Citi CEO Jane Fraser also reported that “healthy spend growth persists in branded cards”. These comments indicate an uptick in consumer spending.
ETFs to Play
Given this scenario, it would be wise to invest in e-Commerce ETFs.
The underlying EQM Online Retail Index utilizes a rules-based methodology to select a globally diverse group of companies with 70% or more of revenue from online and virtual sales. The fund charges 65 bps in fees.
The underlying ProShares Online Retail Index is a specialized retail index that tracks retailers that principally sell online or through other non-store channels. The fund charges 58 bps in fees.
The underlying index consists of long positions in online retailers, included in the ProShares Online Retail Index, and short positions in the bricks and mortar retailers included in the Solactive-ProShares Bricks and Mortar Retail Store Index. The fund charges 65 bps in fees.
The underlying Solactive E-commerce Index provides exposure to exchange-listed companies that are positioned to benefit from the increased adoption of e-commerce as a distribution model, including but not limited to companies whose principal business is in operating e-commerce platforms, providing e-commerce software and services and selling goods and services online. It charges 50 bps in fees.
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E-Commerce Boosts U.S. Retail Sales: ETFs to Tap
The U.S. retail sector is returning to normalcy, driven by robust online sales. The Commerce Department said on Apr 15 that retail sales totaled $709.6 billion, growing 0.7% month over month in March, which easily surpassed the consensus estimate of a rise of 0.3%.
Year over year, retail sales grew 4% in March. Total retail sales for January through March climbed 2.1% from the year-ago levels. Excluding auto, retail sales rose 1.1%, also beating estimates of a rise of 0.5%. e-commerce played a major role in driving sales of the month. Online retail sales grew 2.7% sequentially in March.
The report also pointed out that e-commerce played a major role in driving sales. Online retail sales grew 2.7% sequentially in March.
Rise of Online Shopping Post-Pandemic
Since the onset of the pandemic, the preference for online shopping has surged as people adapted to the necessity of remote shopping. According to a Forbes Advisor report on e-commerce statistics, it is projected that 20.1% of overall retail purchases will be conducted online globally in 2024. Furthermore, e-commerce sales are expected to record a notable uptick of 8.8% in 2024. The global e-commerce market is forecast to reach $6.3 trillion by the end of this year.
E-commerce Growth in the United States
In the United States, online sales surpassed $1 trillion for the first time in 2022, marking a significant milestone. Since then, this figure has continued to rise steadily. The report predicts that the e-commerce market will exceed $7.9 trillion by 2027.
This data points to the importance of embracing e-commerce now as it is still an emerging opportunity. Digital Commerce 360's analysis of U.S. Department of Commerce data reveals that e-commerce's share of overall retail sales increased to 22% in 2023, up from 21.2% in 2022.
Wells Fargo CEO Charlie Scharf said during that bank’s latest earnings call, “spending patterns and consumers using our debit and credit cards remain generally consistent and continue to grow year over year,” as quoted on pymnts.com. Citi CEO Jane Fraser also reported that “healthy spend growth persists in branded cards”. These comments indicate an uptick in consumer spending.
ETFs to Play
Given this scenario, it would be wise to invest in e-Commerce ETFs.
Amplify Online Retail ETF (IBUY - Free Report)
The underlying EQM Online Retail Index utilizes a rules-based methodology to select a globally diverse group of companies with 70% or more of revenue from online and virtual sales. The fund charges 65 bps in fees.
ProShares Online Retail ETF (ONLN - Free Report)
The underlying ProShares Online Retail Index is a specialized retail index that tracks retailers that principally sell online or through other non-store channels. The fund charges 58 bps in fees.
ProShares Long Online/Short Stores ETF (CLIX - Free Report)
The underlying index consists of long positions in online retailers, included in the ProShares Online Retail Index, and short positions in the bricks and mortar retailers included in the Solactive-ProShares Bricks and Mortar Retail Store Index. The fund charges 65 bps in fees.
The Global X E-commerce ETF (EBIZ - Free Report)
The underlying Solactive E-commerce Index provides exposure to exchange-listed companies that are positioned to benefit from the increased adoption of e-commerce as a distribution model, including but not limited to companies whose principal business is in operating e-commerce platforms, providing e-commerce software and services and selling goods and services online. It charges 50 bps in fees.