Rachel’s note: This year, holiday sales figures for Black Friday and Cyber Monday surged to record levels over the long weekend in the U.S.
These high numbers were not what industry experts expected, as we are in a time of economic decline and crippling inflation.
This tells us that despite the current grim state of the market, certain businesses can still thrive. One type of retailer is a case in point, as it’s proving to be the most effective in this environment.
That’s why today, income investing expert and Casey Research colleague Brad Thomas will explain which retailers are seeing the most success… the strategies driving their profits… and how you can benefit, too.
By Brad Thomas, editor, Intelligent Income Daily
After breaking new records last week, holiday shopping is in full swing.
On Black Friday, Americans spent $9.12 billion online – the highest of any year since the retail holiday began.
And Cyber Monday brought in an impressive $11.3 billion in sales – 5.8% above last year’s figures.
But while ecommerce is here to stay, that doesn’t mean the death of physical stores. Adobe reported consumers spent $188 billion total during Black Friday in 2020. So even today’s record-high spending is only a fraction of that total.
And one type of retailer is proving to be the most successful in this environment.
Throughout these pages, our goal is to alert you to the biggest income-producing opportunities in the market. That’s why today, I’ll tell you what these retailers are doing differently and how you can profit from this trend, too.
The Most Successful Retailers
Despite what you might think, the retailers seeing the most success are neither the flashy, online-only sellers nor the stodgy, old, traditional brick-and-mortar types.
Instead, the companies that have embraced omnichannel sales are winning in the marketplace.
That means being able to make sales to customers wherever they are – at home through a website, on the go with a mobile app, or in store with options for pickup or delivery.
And behind the scenes, crunching data to customize advertisements and promotions or increasing loyalty with rewards are some ways these retailers are gaining an edge over the competition.
In fact, in 2021, Salesforce reported that stores offering curbside or in-store pickup grew their Black Friday revenue by 50% over the previous year compared to retailers not offering these pickup options.
These new trends are driving an increasing need for infrastructure and real estate to support the new realities of our economy. And demand will continue to grow as more and more retailers adapt. One great way to invest in this trend is through real estate investment trusts (REITs).
REITs are some of our favorite companies because they provide stable income backed by real estate assets that tend to appreciate over time.
But not every REIT is invested in the types of properties that will be needed to support this shift in buying habits. There are only a few types of REITs set to benefit from omnichannel sales, so let’s lay them out…
The Trifecta Powering Ecommerce
I call them the trifecta of the digital economy: cell towers, datacenters, and industrial properties.
In my book, The Intelligent REIT Investor Guide, I explain: “Every time you make a purchase on your smartphone or computer, it sets a sequence in motion that travels through a network of communications, data and logistics facilities… It’s more than safe to say that [REITs] play an integral role in getting your package from the warehouse to your doorstep.”
Let’s take a look at why each of these is a crucial part of the digital economy.
Cell phones have become an indispensable part of our lives, as a primary source of information, holding our personal identity, allowing payments, and much more. From a retail standpoint, for example, in 2021, 42% of online sales came from mobile devices.
And cellular networks make it all possible. Telecom operators need cell towers to connect the signals from your phone to their network. And as they continue to build out 5G networks, they’ll need more towers.
Datacenters process huge amounts of data to pass through millions of websites every day. On the retail front, this gives access to cloud services and helps algorithms and artificial intelligence optimize customer interactions.
The amount of data created every day continues growing at a rapid pace, increasing the need for data centers to process and store vast amounts of information.
Finally, industrial properties are the key to getting products from manufacturers to customers. From warehouses to sorting facilities to last-mile fulfillment centers, industrial properties form an incredible logistics network capable of putting a package on your porch within a few days.
As omnichannel retailers offer more choices to customers, we’ll need more industrial properties to keep up with the increasing amounts of goods which are shipped.
These three areas are crucial pieces of the omnichannel approach. And REITs in those sectors are a great way to profit from the increased demand in each of these categories.
Happy SWAN (sleep well at night) investing,
Editor, Intelligent Income Daily
P.S. If you’re interested in learning more about this trifecta of investment opportunities and which companies we think are best positioned to benefit, check out the Intelligent Income Investor. This service provides all our research on the highest-quality dividend-paying companies out there – including the retailers best utilizing the omnichannel approach. To find out more and get one of my favorite ideas for free, watch this video.