Most people are well aware of the woes affecting the retail industry. Brick-and-mortar retailers like JCPenney, Macy's and Target have been battered due to disappointing sales and increasing competition from online retailers such as Amazon.

Many of these companies—which have been around for decades in some cases—have seen their share prices decline by more than half in the past year alone.

Now with the all-important holiday shopping season swinging into full gear, investors are wondering whether there's opportunity in the beaten-down industry and if so, how best to capitalize on it.