‘Stay at Home’ Stocks Gain Strength as Economy Adjusts to Ongoing Global Crisis
The continuing global crisis has dramatically shifted the future direction of the wider economy, and brought several technology companies into the spotlight as tens of millions of people work from home.
I urge you to read the CNBC article outlining Jim’s picks. I am especially gratified by his short list of “stay at home plays,” which include HMG Strategy sponsor partners such as Zoom Video Communications, RingCentral, ZScaler, Okta and Crowdstrike. From my perspective, this is a strong affirmation of our vision and incredibly rapid pivot to a digital model.
Online Sales Jump for Target as Shoppers Shift to Digital Channels for Purchasing
Shoppers are avoiding stores and increasingly using digital platforms to purchase household goods during the pandemic. From my perspective, this clearly represents a tectonic shift and largely defines the “new normal” we are collectively experiencing as a society.
“Target has seen a sharp increase in online sales, as shoppers try to limit time inside stores or avoid the trips altogether during the coronavirus pandemic, CEO Brian Cornell said,” according to an article posted on CNBC yesterday. “The trend has worked in the discount retailer’s favor, and it expects to emerge from the coronavirus pandemic, having gained market share, Cornell said in a call with reporters.”
Target’s experience is definitely part of a wider trend that is likely to become permanent as more companies are forced to rely on their digital channels for sales, marketing and distribution.
“One factor that has helped Target is the investment it’s made to offer customers different ways to shop, including the ability to order online and either drive-up or walk inside to pick-up purchases,” writes Melissa Repko of CNBC. “It also has Shipt, a same-day personal shopping service that delivers to the home.”
Facebook to Invest Heavily in Indian Tech Giant
Facebook has announced it will invest $5.7 billion in Jio Platforms, a tech firm that makes it easier for consumers and businesses to use digital services. The strategic investment will likely strengthen Facebook’s capabilities as a global platform for digital commerce.
“Jio Platforms is a subsidiary of Reliance Industries, one of India’s biggest multinational companies and a major provider of cellular and internet services in the country,” write Mike Isaac and Vindu Goel of the New York Times. “Facebook said the move indicated its commitment to India. More than 388 million people in India have been connected to the internet over the past four years through Jio, Facebook said.”
Bloomberg News offered an interesting perspective on the investment, noting that an alliance with Jio might expand the economic potential of Facebook’s WhatsApp and boost its chances of competing successfully in India against rivals such as Walmart and Amazon.
“India, the last big global retail frontier with 1.3 billion people, is an open arena for technology giants as smartphone adoption balloons and cut-rate data plans fuel consumer entertainment and social media. That will prompt more and more Indians to shop over the internet,” writes Saritha Rai of Bloomberg.
Automakers Rely on Technology to Jump-start Sales
In another sign of how the broader culture is adjusting to the ongoing crisis, car and truck manufacturers are ramping up their use of digital technologies to reach potential buyers in their homes during the pandemic.
“Auto sales forecasts have fallen by millions of units from where they were in early 2020, sparking automakers to roll out unprecedented deals and adopt new tech-heavy methods of selling vehicles to shoppers stuck at home,” writes Robert Ferris of CNBC. “The pandemic is something the U.S. auto industry has never faced before … While online car sales were already a growing force in the automotive world, the spread of the virus has sped up dealer participation. In mid-April, tracking service Dealertrack had seen electronic transactions jump nearly 65% over where it was at the same time in 2019.”
I predict this shift to wider use of digital sales and marketing technologies by the automobile industry will accelerate, even after the pandemic is over.
SpaceX Launches More Broadband Satellites to Accelerate Internet Connectivity
SpaceX has launched another batch of broadband satellites as part of its continuing strategy to provide global Internet connectivity.
“The 60 Starlink broadband satellites rode atop one of SpaceX’s Falcon 9 rockets, taking off from Florida’s Kennedy Space Center …This launch brings the total number of Starlink satellites in orbit to more than 400,” writes Jackie Wattles of CNN Business. “SpaceX has said the satellites will allow it to beam Internet directly to terminals that consumers will set up at their homes or offices. Service is expected to roll out in the United States and Canada this year, CEO Elon Musk has said. The company plans to eventually grow its constellation to more than 40,000 satellites, blanketing the entire planet in cheap, high-speed Internet connectivity.”
I give Musk credit for sticking with his vision and following through on his strategy in a time of crisis. From my perspective, this is the hallmark of excellent and courageous leadership.
