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Holiday Season 2018 Should Make This ETF Jump in Joy

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Brick-and-mortar retailers have been facing constant threats from digitization. The latest Thanksgiving Day, Black Friday and Cyber Monday deals corroborate the fact. With retailers like Walmart Inc (WMT - Free Report) and Amazon.com Inc. (AMZN - Free Report) coming up with deals both online and offline, one thing has become clear that “the transaction is more important than where it occurs,” per analysts (read: Guide to E-commerce ETFs).

Record-Breaking Online Sales

Online sales jumped 23.6% to about $6.22 billion on Black Friday, according to data from Adobe Analytics. On Thanksgiving, online sales were estimated to have gone up 28% to $3.7 billion, helping it to become the fastest-growing day for e-commerce sales in history. Black Friday this year was also the first day in record to haul in more than $2 billion in sales stemming from smartphones, per Adobe, as quoted on CNBC.

Along with easy access, one of the reasons for this online binge is low prices. Adobe expects online Cyber Monday sales to set another record of $7.8 billion, up nearly 18% from last year. About $400 million had already been spent online by Saturday morning, up about 24% from a year ago. Adobe’s data showed that Small Business Saturday was on its way to touch a new record of $3 billion in online sales.

Mobile Commerce Is Hot

Mobile commerce has made up about 33.5% of the online sales this year, up from 29.1% in 2017. The buy-online, pick-up in store option has also gained popularity this year, seeing a 73% surge from Thursday to Friday. Average order values from phones were up 8.5% year over year to reach $146, based on Adobe's data.

Declining Euphoria for Brick-And-Mortar Retailing

Preliminary data from analytics firm RetailNext showed that in continuation of the trend witnessed in recent years, net sales at brick-and-mortar stores dropped 4% to 7% over the two days, while footfall declined 5% to 9%.  

Per RetailNext, brick-and-mortar sales were down 8.9% year over year in 2017 for the Black Friday weekend and traffic fell 4.4%. In 2016, store sales and footfalls plummeted 4.2% and 4.4% (read: What Tech Crash? Tap Online ETFs for Black Friday & Beyond).

Investors should note that Deloitte predicts holiday sales surpassing $1.1 trillion this year, up 5% to 5.6% from a year ago, while e-commerce sales are expected to jump a staggering 22% to $134 billion.

Against this backdrop, betting on online sales while having a short position on offline transaction could be a good idea. In order to do so, investors can bet on ProShares Long Online/Short Stores ETF (CLIX - Free Report) .

CLIX in Focus

The fund follows the ProShares Long Online/Short Stores Index, which consists of long positions in the online retailers included on the ProShares Online Retail Index and short positions in the bricks and mortar retailers included on the Solactive-ProShares Bricks and Mortar Retail Store Index. The fund has about $44.1 million and charges 65 bps in fees (read: Guide to E-commerce ETFs).

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