I just bought myself an early Christmas present.
See, I recently took up the sport of skeet shooting, and I want to get better. So over the Thanksgiving weekend, I bought a two-hour instructional video.
The process couldn't have been any easier. I sat at the dining room table on Black Friday – the kickoff of the Christmas shopping season – with my iPad. I went to the website, ordered the video, and paid for it using a credit card, all in a matter of minutes.
My purchase may have been unique, but it was hardly isolated. Fact is, online and mobile sales soared on Black Friday. That's critical because, as online shopping grows, these stats are now serving as a snapshot of our economic health.
Consider that Adobe Analytics says Black Friday alone accounted for $6.2 billion in online sales, up 23% from a year ago. Some 33.5% came from mobile phones and 10% from tablets.
That means mobile commerce accounted for nearly half of all e-commerce orders for this shopping bonanza.
With that in mind, let's dig into a great way to tap the fast-moving world of mobile commerce.
It's a trend that shows no signs of slowing down anytime soon.
So check it out...
Sales Go Mobile
As great as Black Friday was, Cyber Monday did even better. Adobe Analytics says online sales that day rose 19.3% to a record $7.9 billion, with mobile transactions climbing some 55% higher than last year.
From the standpoint of broad economic health, I believe the mobile sales numbers are nothing short of awesome. I say that because handhelds are extending commerce well beyond E-Commerce King Amazon.com Inc. (Nasdaq: AMZN).
Don't get me wrong, I'm still an Amazon bull. But I think that a great season for brick-and-mortar stores shows what I have been reminding you for some time now – the U.S. economy is in overall great shape.
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Consider that Macy's Inc. (NYSE: M) now expects to do roughly $1 billion in mobile sales this year, much of it during the crucial holiday season. Over the last couple of years, the vaunted retailer has adopted several initiatives designed to pump up sales through handhelds.
Other retailers are joining in as well. Analysts at Sensor Tower say that this year's Black Friday saw the top 10 mobile shopping apps add roughly 500,000 first-time users, up 16.3% from last year.
Of course, with 115,000 downloads, Amazon came in first. But Walmart Inc. (NYSE: WMT) came in second with 95,000 downloads. That represented a 39.7% increase from a year ago. Target Corp. (NYSE: TGT) came in third, with 62,000 new users.
To be sure, online sales are growing four times as fast as brick-and-mortar sales. But mobile commerce sales are growing up to 10 times faster than standard retail.
The Best Way to Play Mobile Commerce
No wonder merchants like Walmart, Macy's, and Target have beefed up the mobile experience. Many of these apps allow buyers to order on a mobile device and then drive to the store to pick up the item.
Add it all up and you can see that the red-hot trend of mobile commerce is moving in many directions, all at the same time.
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That's why I believe the ETFMG Prime Mobile Payments ETF (NYSE Arca: IPAY) is the way to invest in this breakout field.
Launched in July 2015, the fund is focused on a major growth platform that is sweeping the world as the mobile phone becomes not just a primary shopping device, but one for payments as well.
As you might expect, the ETF holds several of the traditional big payments firms. Its 38 stocks include American Express Co. (Nasdaq: AXP), Mastercard Inc. (NYSE: MA), and Visa Inc. (NYSE: V), all of which have new mobile offerings.
But IPAY goes well beyond the big credit card companies. It owns firms at the leading edge of mobile commerce. And it gives us some global exposure.
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Let's take a look at some of its other key holdings...
- Fiserv Inc. (Nasdaq: FISV) takes a broad approach to the overall world of payments and digital transactions. It serves more than 12,000 banks, credit unions, retailers, and other clients around the world. The firm's mobile solutions cover everything from simple banking inquiries to a complete set of mobile alerts and payment models. Its solutions also allow consumers to send and receive money from their mobile devices.
- Brazil's PagSeguro Digital Ltd. (NYSE: PAGS) is bringing the mobile-payments revolution to Latin America's largest economy. It was founded in 2006 as an online payment platform to provide digital payment infrastructure. The firm now offers affordable, mobile-first solutions for merchants to accept payments and manage their cash through digital systems, all without the need for a bank account. It's a great business model – the World Bank says Brazil has one of the world's highest concentrations of mobile phone use.
- PayPal Holdings Inc. (Nasdaq: PYPL) formerly served as the payments unit for eBay Inc. (Nasdaq: EBAY). It spun off from its parent a little more than three years ago and has become a top provider of digital transactions. In particular, the company owns the Venmo mobile payments firm popular with young people, who use it to send and receive money to and from friends and family with the app. PayPal, which has its own mobile app, counts more than 200 million active users around the world.
- Square Inc. (NYSE: SQ) is a pioneer in mobile payments that got its start by giving small merchants a credit card reader they could attach to their smartphones or tablets. As a result, the firm has become a leading ally of small- and mid-sized businesses with its full-fledged mobile commerce platform that can process and track all of the sales, marketing, inventory, and accounting tasks a firm must fulfill.
- Cyprus-based Qiwi Plc. (Nasdaq: QIWI) provides mobile payment solutions to more than 18 million clients, mostly in Russia and Eastern Europe. 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 Western Europe and the United States, letting former citizens of those ex-Soviet states send and receive funds from family and friends back home.
On the Comeback Trail
Now then, IPAY has come under pressure of late, along with the rest of the market. The good news is we can get – at a nice discount – an ETF that had been on a tear for the last two years.
From its peak on Oct. 1, IPAY had declined nearly 16% before hitting bottom on Nov. 20. It then tacked on more than 3% gains in four sessions in what has been a tough market.
I believe this fund will once again greatly outperform the market, as it had been doing. I say that because I'm expecting a rebound for the overall market, and because Wall Street is clearly waking up to the fact that mobile commerce is still a massive growth field.
Shares trade at around $38, which is much cheaper than many of the stocks it holds in its portfolio.
In other words, this is a cost-effective way to play the breakout field of mobile payments that should continue to show massive growth for at least the next few years.
And that makes this a great way to build your net worth over the long haul.
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As you look toward your retirement, it's absolutely critical that you find out which of the 26(f) programs you should "enroll" in now.
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.