Online Retail Monthly Report | December

04 January 2022

Online Retail ETF Monthly Report: Key Takeaways

  • Holiday Shopping Season a Mixed Bag – While vaccinations have made in-store shopping possible and nostalgically fun, the holiday season remains complicated as the pandemic is not over and there is a new COVID variant looming. [1] Supply chain constraints and labour shortages are also adding to holiday shopping woes.
  • Winners of the Holiday Shopping Season – Buy now, pay later (BNPL) and curbside pickup are two winners this holiday season. BNPL-based spending was up 422% and order volume up 438% according to Adobe as the BNPL option may be helping consumers cope with higher prices. Curbside pickup has also increased 70% compared to two years ago, out of ongoing pandemic concerns and greater convenience, being applied to 20% of online orders. [2]
  • Supply Chain Issues Mean Fewer Discounts –Online shopping has provided a life-line during the holiday season due to limited supply in-store, but out of stock messages are still up 124% over last year per Adobe data. This means fewer deals online and merchandise close to full price. Brick and mortar retailers have been more promotional to get shoppers into their stores which means higher margins for online retailers. [3]
  • Boomers the Only Demographic That Prefer to Shop In-Store – Internet users worldwide plan on shopping both in-store and online this holiday season. However a high percentage of Gen Zers (18%), millennials (16%), and Gen Xers (15%) plan to do all their shopping online this holiday season, while only 22% of boomers are still doing all their shopping in person. [4]
  • Cyber Monday Slightly Lower Than Last Year’s Peak Level, But Still On Track for Record Gains – While consumers made online purchases of $10.7 billion on Cyber Monday, this marked a 1.4% decrease from a year ago. Still Adobe expects the holiday season to be a record breaker this year as shoppers spread out their dollars over the remaining days. Adobe expects online sales from November to December 31 to hit $207 billion, which would represent a record gain of 10%. [5]

Please note that all performance figures are showing net data.

 

Macro Outlook

Global Ecommerce Set to Grow Double-Digits This Holiday Season

Even with physical stores open, online sales continue to outpace in-store purchases this holiday season. Just over 87% of consumers intend to shop online this holiday season according to PYMNTS 2021 Holiday Shopping Outlook for a record increase of 10% over last year. [6] With supply chains constrained, product availability is a big concern for holiday shoppers with 71% of online holiday shoppers citing it as a factor affecting their online purchasing decisions, with consumers willing to pay up for merchandise, translating into fewer discounts and higher online retail margins. Another big trend this holiday season in personalization, with consumers embracing those online stores offering features such as product recommendations based on past purchases and/or viewing histories. Hands down the hottest retail payments story of the season is buy now, pay later (BNPL) with the instalment credit option becoming one of the most popular among this year’s holiday shoppers along with curbside delivery.

 

Online Retail ETF Performance (As of 30.11.2021)

 

1M

3M

6M

YTD

12M

SI

Global Online Retail UCITS ETF

-11.92%

-16.69%

-15.96%

-17.98%

NA

-17.98%

EQM Global Online Retail Growth Index

-11.83%

-16.52%

-15.62%

-17.55%

-6.54%

-17.55%

Performance before inception is based on back tested data. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product. Source: Bloomberg / HANetf. Data as of 30/11/21. Please note that all performance figures are showing net data.

 

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