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Instead of Lamenting Cyber Monday’s “Retail Apocalypse,” Make This Move

2 | By Michael A. Robinson

Black Friday/Cyber Monday hit about two weeks ago – and all I’ve heard since is doom and gloom.

The “retail apocalypse” is here, and every “expert” out there is telling investors to “Short” brick-and-mortar retailers… wait, no, they should “Buy” retailers on the dip.

Then there are those who try to explain that this isn’t really an apocalypse, and that this specific retailer is going to survive (but this one or this one isn’t).

Over at Jim Cramer’s TheStreet, I saw one writer recommend an ETF – EMTY, as in “empty” stores – whose share price rises whenever a bricks-and-mortar retail stock index falls.

All this is ridiculous – and way more complicated than necessary.

Yes, Macy’s Inc. (NYSE: M), Sears Holdings Corp. (Nasdaq: SHLD), and Office Depot Inc. (ODP) are plummeting. And, indeed, J. Crew Group Inc. and Toys “R” Us Inc. are heading toward insolvency.

But check out these numbers…

Adobe Analytics tracked $5.03 billion in online sales on Black Friday – and an even more robust $6.59 billion on Cyber Monday. And the analysts there think the stage is now set for e-commerce sales to surpass $100 billion this holiday season, a new record.

In other words, technology is behind all the “apocalypse.” So instead of picking among retailers to “Buy” and/or “Short,” we should be investing in the technology that’s causing the “apocalypse.”

And though it’s a good start, we can do way more than “Buy” Amazon.com Inc. (Nasdaq: AMZN).

In fact, we can get into an e-commerce-focused investment that’s been doubling the overall market’s return all year long.

And that shows no sign of slowing down…

A New Thanksgiving Tradition

While sitting around the Thanksgiving dinner table, I’ll bet a few members of your family kept peeking at their phones. (I hope it wasn’t you.)

And they weren’t just checking the latest sports scores or texting Aunt Joanie in Iowa. Fact is, millions of us spent time on Turkey Day playing “Secret Santa.”

You see, many Black Friday deals this year started a day early on Thanksgiving – and didn’t even require a trip to the mall. All we had to do to take advantage was turn on our phones.

The numbers I’m seeing are telling me this campaign worked.

Amazon says that more than 50% of deal-related searches on Thanksgiving came through smartphones and tablets. Shopify Inc. (Nasdaq: SHOP), which hosts third-party resellers on Amazon’s platform, said a stunning 60% of its Thanksgiving sales leads came through such mobile devices.

And the growth rates here are off the charts. According the Smarter Commerce activity report from IBM Corp. (NYSE: IBM), Americans made 65.3% more purchases during Thanksgiving using their smartphones than last year.

To be sure, most online shoppers still use their home desktops or laptops. Roughly 70% of virtual purchases are still made on PCs. That’s because it’s still a bit tricky to make purchases on a smartphone – whether because of their small size or because you have to download an extra app.

But there are a range of technology and financial firms out there working hard to make “mobile” commerce – m-commerce – as easy as traditional desktop e-commerce.

And that should help our smartphones our primary e-commerce shopping tool very soon.

No More Glitches

If you haven’t done any mobile shopping yourself this year, I understand. Until recently, m-commerce has often been a complicated, glitch-heavy process.

But now, our mobile devices offer easy, clean access to virtually all of the leading e-commerce sites – right at the moment you’re inspired to look up a sale.

So really, gone are the days of having to wait to get back home (or to the office) to use your desktop to make a purchase. This is good news for e-commerce retailers. After all, you might forget what you’re looking for by the time you get there – and retailers love impulse buyers.

Firms with reliable, glitch-free, easy-to-use mobile sites are reaping the rewards.

Walmart Inc. (NYSE: WMT) says that its customers used to browse sales on their phones – but wait to get back home to make their purchase. But a much revamped mobile platform has led the volume of orders placed on Walmart.com to double from a year ago.

How did Walmart make it easier to shop on phones? The giant retailer made customer service easily available. It created better sorting and filtering options, better linked its home-page marketing banners to checkout pages, provided product reviews on every single page, and let mobile shoppers buy or reserve orders online and pick up in store.

Just a few years ago, mobile commerce sites simply lacked many of these features. But smartphones are now leading the way in e-commerce… and retail overall.

Overall online sales are growing four times as fast as brick-and-mortar sales. But m-commerce sales are growing up to 10 times fasterthan standard retail sales.  

Simply put, retailers without a viable m-commerce strategy have begun to enter a sales death spiral – that “retail apocalypse” we talked about earlier.

This is the best way to make some money while you watch…

The Perfect Retail Apocalypse Fund

The ETFMG Prime Mobile Payments ETF (NYSE Arca: IPAY) is the best way for you to profit as you watch brick-and-mortar stores get sunk.

Launched in July 2015, it has already drawn in $237 million in assets. And its portfolio is stocked with the strongest players in mobile commerce, including…

  • With a weight of 6.52%, PayPal Holdings Inc. (Nasdaq: PYPL) is IPAY’s second-largest holding. Payment processors like PayPal get a small slice of most e-commerce transactions. While it’s a small slice, it adds up. Consider that total global e-commerce market stood at $1.915 trillion at the end of 2016, according to the analysts at eMarketer. They see that figure more than doubling to $4.058 trillion by 2020.
  • This fund also makes room for fintech upstarts such as Square Inc. (NYSE: SQ), which has boosted sales at an average 87% yearly clip over the past four years. Square, which has a weight of 4.14% in IPAY, has become a leading ally of small and midsized businesses with its reliable and easy-to-use mobile commerce platform that can process and track all of the sales, marketing, inventory, and accounting tasks a retailer must fulfill.
  • WireCard AG (OTC ADR: WCAGY) is another key innovator of mobile payment systems. The German firm has secured a banking license, enabling it to issue virtual credit cards that are now a payment option offered by 29,000 firms, mostly in Europe. WireCard, thanks to a purchase of Citigroup Prepaid Card Services has begun to build a growing presence in the United States as well.
  • France’s Worldline SA (EPA: WLN) has built a robust mobile commerce platform that is tailored to the government, healthcare, and transportation clients. It underpins a broad range of e-ticketing systems, and can handle payment systems on many public train and bus networks. Its cloud-based customer service portal handles more than 2 million client requests each year – and from what I’ve heard, it actually helps resolve customers’ needs.
  • Cyprus-based Qiwi PLC (Nasdaq: QIWI) provides mobile payment solutions to more than 18 million clients, mostly in Russia and other former Soviet states. Think of Qiwi as a sort of “Western Union” for that region, helping clients use their mobile devices to transfer funds. Now, the firm is pushing into the rest of Europe and the United States, letting clients send and receive funds to and from family and friends back home.

IPAY has been a clear hit with investors. Its shares have risen roughly 35% this year. That’s roughly double the gain of the S&P 500.

And when you consider that m-commerce could make up more than 50% of the entire ecommerce market as soon as the 2018 holiday season, the stage is set for a lot more upside.

Shares of the IPAY trade for $34.50 and carry a 0.75% expense ratio.

Now, according to my ETF Profit Screens, that ratio a bit higher than I like to see. But I’m willing to look beyond that because this is a pure play on the huge and growing mobile commerce sector and holds so many quality stocks.

In other words, IPAY is a robust and cost-effective way to play the unstoppable trend of m-commerce.

With it, you’ll leave folks trying out complicated maneuvers to “play” the “retail apocalypse” totally in the dust.

The road to wealth is paved by tech – not trick shots.

Have a great weekend.

See you back here soon.

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2 Responses to Instead of Lamenting Cyber Monday’s “Retail Apocalypse,” Make This Move

  1. Marlin Miller says:

    Mr Robinson- thanking you for your ideas and vision! With IPAY ETF: I’m considering a LEAP (options call) on this. Can you advise me – IS now (DEC 13) a good time to expect a rise in this ETF? Or – is the month of Jan considered a down month, because of less retail buying?

    Thanking you very much,
    Marlin

  2. ken dickerson says:

    I’m vested in a co. that is in the process of buying out another co.(they just sent out proxy votes for all shareholders), the co. I have shares with is $5.48 p/s, and offering the other companies shareholders @7.05 p/s, if this passes what will it do to my stocks? thanks for the calif. pot explosion briefing, I’m all in on your top 3 stocks and looking forward to 2018. I live by your 5 rules to invest..Legislation passes stocks soar!

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