GROWTH THEMES | THEME 2 CONNECTED COMMERCE

1. EditGenetics

2. Connected Commerce

3. Digital Reality

4. Conservation Capitalism

5. The Future of Manufacturing

2

GROWTH THEME

Connected Commerce

Beyond Bricks and Clicks

There used to be two discrete experiences, offline and online. They’ve now come together in an omnichannel world. But the world is not just being recreated click-by-click instead of brick-by-brick; it’s being reimagined.

In this installment of our Convergence series, we explain what we call “connected commerce”—a totally integrated shopping experience that combines the best of offline and online

experiences, then connects them in a way that allows them to share insights about what a consumer likes.

We’re now moving into a new level of connected commerce, where merchants or ecosystems can track a consumer’s journey. They see your past behavior, and use predictive analytics to help enhance your future experience.

There used to be two discrete experiences, offline and online. They’ve now come together in an omnichannel world. But the world is not just being recreated click-by-click instead of brick-by-brick; it’s being reimagined.

In this installment of our Convergence series, we explain what we call “connected commerce”—a totally integrated shopping experience that combines the best of offline and online >experiences, then connects them in a way that allows them to share insights about what a consumer likes.

We’re now moving into a new level of connected commerce, where merchants or ecosystems can track a consumer’s journey. They see your past behavior, and use predictive analytics to help enhance your future experience.

We’re still in the early innings of omnichannel penetration of the commerce opportunity. The current environment accelerated the pace of consumers transacting online. Still, less than a fourth or a fifth of global commerce is conducted over the internet.

Jayesh Kannan, CFA
Global Research Analyst

THE RISE OF OMNICHANNEL MARKETING

$0

Average return for
$1 spent on email
marketing

Average return for $1 spent on email marketing

0%

Higher customer
lifetime value when
a cross-channel
approach is adopted

Higher customer lifetime value when a cross-channel approach is adopted

0%

Of in-store purchases
are influenced by
digital transactions

Of in-store purchases are influenced by digital transactions

0%

Of consumers
shop on more than
one channel

Of consumers shop on more than one channel

Source: dotdigital Group PLC, as of 2020.

Anticipation and Analysis—
Essential to Active Investing

As active growth investors, we seek to anticipate and analyze possible outcomes in a way other investment approaches cannot.

We are ultimately betting against the very powerful reality of mean reversion. The adage that “the more things change, the more they may stay the same” is powerful, and is often true.

But in reality things do change. Consumer behaviors evolve. Humans innovate and create new solutions. Corporate profit pools shift. And new winners emerge. Just think about some of the things the world was predicting at the turn of the last decade.

And for now, the ability to predict changes is still the domain of humans. It is our job, then, to develop a practice of forecasting, which involves observing, learning, and anticipating the future.

Creating a framework for forecasting helps us decrease the variability around predicted outcomes, improve accuracy, and act on investment ideas earlier and with greater conviction.

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