The first quarter was a rough one for traditional retailers like Macy's(M) - Get Report and Nordstrom(JWN) - Get Report , partly due to online players like Amazon(AMZN) - Get Report stealing market share. Christian Magoon, CEO of Amplify ETFs, said smartphone shopping will never entirely replace the physical experience, but the recent results illustrate that the trend is not reversing.

"Brick-and-mortar retail is broken and the shift is accelerating to online retail," said Magoon. "Even Macy's said its online sales is seeing double-digit growth, but it's too small a piece of its business."

Magoon launched the Amplify Online Retail ETF (IBUY) - Get Report last month. IBUY seeks to replicate the price and yield performance of the EQM Online Retail Index (IBUYXT). The rules-based index is comprised of a diverse group of companies that generate at least 70% of their revenue from online and virtual retail sales.

Current index constituents offer exposure to various market capitalizations, countries and industries. The index has a maximum of 25% exposure to non-U.S. stocks like Alibaba(BABA) - Get Report and Mercadolibre(MELI) - Get Report , and uses a modified equal-weighting methodology so stocks like Etsy(ETSY) - Get Report have a similar weighting to giants like Priceline (PCLN) or eBay(EBAY) - Get Report . Companies in the IBUY portfolio fall into three online retail categories: marketplace, traditional retail and travel.

The IBUY ETF has dropped 4% since its launch in April, yet it has still outperformed the more bricks-and-mortar biased SPDR S&P Retail ETF (XRT) - Get Report , which has dropped over 9% in the same period.

Magoon said traditional retailers are weighed down by real estate costs and labor costs that are going up due to rising minimum-wage laws.

That said, Magoon does not think online retail will be able to chip too deeply into the sales of home improvement players like Home Depot(HD) - Get Report , which reported Street-beating first-quarter earnings, or Lowe's(LOW) - Get Report .

"Home Depot will not be disrupted by the companies in the IBUY," said Magoon. "It's hard to shop for lumber, mulch and large plants online."