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Consumer ETFs Win on Prime Day Becoming "Summer's Black Friday"

Sanghamitra Saha

All eyes are on retail behemoth Amazon AMZN as the company is preparing for its epic summer shopping event called Prime Day, which will run through Jul 15 to Jul 16. Amazon started Prime Day five years ago to offer heavy discounts on a wide variety of stuffs.

The move was designed to extend benefits to Prime members, who pay subscription fees to enjoy free shipping and other services like Amazon Video streaming, Amazon Prime Music, Prime Reading and Amazon Photos.

Amazon has now more than 100 million Prime members. With this event, Amazon manages to bring new members on Prime. Since inception of this great deal day, there has been 20.5% growth in the number of U.S. Prime Day shoppers, according to Adlucent.

Last year, Amazon reported record Prime Day sales. While this year should be no exception to this mega shopping event, other retailers are also following the footsteps of this online retail giant probably to capture some market share.

“According to a survey of 1,000 U.S. consumers conducted by digital ad and analytics agency Adlucent, about 72% of shoppers will go beyond Amazon to comparison shop,” as quoted on MarketWatch.

Prime Day sales in 2018 were roughly $4.19 billion and Prime Day 2019 sales will likely cross $5 billion and could even reach to about $6 billion, per marketingland.com. More than 50% of sales will be derived from outside the United States. Investors should note that Black Friday 2018 generated about $6.2 billion, according to Adobe. No wonder, Prime Day is being touted as the "Summer's Black Friday" by many analysts.

Shopping Deals Flowing Everywhere

Target TGT is running "Deal Days" on the same days as Amazon's Prime Day event. There will be 40% discounts on some furniture, 30% off on some small appliances and cookware, and other deals on toys, sporting goods and bedding at Target.

eBay Inc. EBAY announced three weeks of July deals including an additional “Crash Sale” on Jul 15. Pricking at Amazon’s site outages last year, eBay promised to add even more deals "if history repeats itself and Amazon crashes that day."

Nordstrom JWN also looks to cash in on the “summer version of Black Friday” by beginning its two-week "anniversary sale" on Jul 19. There will be discounts on brands such as Topshop and Madewell, per an article published on CNN.com.

Walmart Inc. WMT will also showcase “thousands” of discounts between Jul 14 and Jul 17 on the Walmart.com site, including on items like HP laptops and Dyson vacuums.

How to Gain From the Trend With ETFs?

The scenario may be changing in the retail landscape, but consumer ETFs are gainers in any case. July is going to see a surge in shopping. More than half of back-to-school consumers plan their shopping around this big shopping spectacle, according to the National Retail Federation.

To make the most of parents’ and students’ planning, Amazon recently launched a “Happy School Year” store, which will be loaded with classroom supplies, required electronics, backpacks and back-to-school apparel.

Consumer Discretionary Select Sector SPDR Fund XLY and Fidelity MSCI Consumer Discretionary Index ETF FDIS are top-ranked ETFs while Vanguard Consumer Discretionary ETF VCR has a Zacks Rank #3 (Hold). The trio is hovering around a 52-week high (read: 5 ETF Strategies to Win in a Pricey Market).

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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
eBay Inc. (EBAY) : Free Stock Analysis Report
 
Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports
 
Fidelity MSCI Consumer Discretionary Index ETF (FDIS): ETF Research Reports
 
Consumer Discretionary Select Sector SPDR Fund (XLY): ETF Research Reports
 
Nordstrom, Inc. (JWN) : Free Stock Analysis Report
 
Walmart Inc. (WMT) : Free Stock Analysis Report
 
Target Corporation (TGT) : Free Stock Analysis Report
 
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