The world is not just being recreated click-by-click instead of brick-by-brick; it’s being reimagined. In the second installment of our Convergence series, which examines five growth themes that are shaping the future of investing, Hugo Scott-Gall spoke with Global Research Analyst Jay Kannan, CFA, about what we call “connected commerce,” which covers the entire architecture of the digital economy.
Watch the video or read the recap below.
We think of connected commerce as an integrated shopping experience—that is, transactions that can take place anywhere, anytime, in a frictionlesss manner.
The old-world architecture involved two discrete experiences. One was offline and the other online. In the new way of doing things, we bring together the best of both offline and online shopping experiences in a way in which they can talk to one another and share insights.
We think about growth in the technology sector across five broad themes.
The first is ubiquitous connectivity—i.e., more devices, more connections, and democratized access to data.
We’re still in the early innings of omnichannel penetration when it comes to the broader commerce opportunity.
The second is digitization of the enterprise—that is, more companies adopting cloud-based digital infrastructure, including software-as-a-service solutions.
The third is next-generation computing—which we think about as the wide and cheap access to near unlimited compute power.
We think of the fourth theme as digitization of the consumer, which is the structural shift of lifestyle and everyday services that consumers have access to, from online to offline—and this would include entertainment, classifieds, food delivery, ride hailing, payments, so on and so forth.
The fifth and final theme is de-globalization, which we’ve seen for both geopolitical reasons as well as because of supply-chain disruptions over the past year or so.
I believe we’re still in the early innings of omnichannel penetration when it comes to the broader commerce opportunity. Less than a fifth of all commerce transacted today is conducted over the internet. We believe that connected commerce has a long runway of growth ahead.
Jayesh Kannan, CFA, is a global equity research analyst.
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