As we move toward the all-important holiday season, projections from market research firms are coming to the forefront.This year's holiday season is six days shorter than last year, reducing the number of shopping days between Thanksgiving and Christmas to 26.

Online shopping once again is expected to be a bright spot for retailers. The NRF predicts that online and non-store sales will grow by 8% to 9% to $295.1 billion to $297.9 billion. This indicates a significant increase from last year’s $273.3 billion, reflecting the ongoing shift toward online shopping as consumers prioritize convenience.

Adobe predicts that online sales will reach $240.8 billion, indicating an 8.4% increase year over year. Strong discounts—as high as 30% off listed price—will drive shoppers to “trade up” in categories such as electronics, appliances and sporting goods, contributing over $2 billion in incremental spend this season.

The 2024 holiday season is expected to be the most mobile of all time, with a record $128.1 billion spent through mobile devices at 53.2% share over desktop, per Adobe. Cyber Week is expected to drive $40.6 billion in online sales, marking a 7% year-over-year increase. Cyber Monday is expected to drive $13.2 billion in online sales, suggesting a 6.1% increase. Black Friday and Thanksgiving are expected to see sales growth, as consumers embrace earlier deals.

Mastercard Economics Institute’s Holiday Forecast for the 2024 season (Nov. 1 to Dec. 24) predicts that overall retail spending (excluding automotive) will increase 3.2% year over year this holiday season with a 7.1% bump from online sales. Against this backdrop, below we highlight a few investing areas and their related exchange-traded funds (ETFs) that could boast higher sales in the upcoming holiday season.

ETFs in Focus

e-Commerce ETF – ProShares Online Retail ETF (ONLN)

As online retailing will rule holiday season shopping, this ETF deserves a look. The ProShares Online Retail Index is a specialized retail index that tracks retailers that principally sell online or through other non-store channels. The ONLN ETF charges 58 bps in fees. Amazon (21.90%) is the fund’s top holding.

Apparel ETF – SPDR S&P Retail ETF (XRT)

According to Mastercard, sales will increase by 4.5% year over year for online apparel and 2.0% year over year in-store. Retailers have enhanced online shopping experiences, and consumers are increasingly attracted to online-exclusive discounts and flexible purchasing options. The ETF XRT invests about 20% of its weight in XRT. The fund charges 35 bps in fees.

Semiconductor ETF – VanEck Vectors Semiconductor ETF SMH

Due to lower borrowing costs, lower prices and replacements of early-pandemic tech purchases, electronics sales are predicted to increase by 6.7% this season. The demand for electronics, gadgets and gaming products is especially set to rise significantly due to the continued evolution of AI, immersive experiences and digital work environments. The Zacks Rank #1 (Strong Buy) ETF SMH tracks the overall performance of companies involved in semiconductor production and equipment. The fund charges 35 bps in fees.

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SPDR S&P Retail ETF (XRT): ETF Research Reports

VanEck Semiconductor ETF (SMH): ETF Research Reports

ProShares Online Retail ETF (ONLN): ETF Research Reports

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