Connected Consumer

Technology has given today’s connected consumers unprecedented access to goods and services across the world. But what does the rise of e-commerce mean for companies, consumers and investors?

What is the Connected Consumer?

Significant advancements in technology over the years have played out in favour of today’s consumer. Widespread availability of internet means that today’s consumer is in a better position to make more informed purchase decisions anywhere, anytime, on any platform. Businesses must also evolve to keep pace with consumer demand, and fintech is increasingly important for companies to improve how they interact with their customers. Keeping pace with technological advancements will enable companies to engage their customers more deeply in a digital economy. 

What is the Digital Economy?

The rise of smartphones has given consumers globally unprecedented access and choice when it comes to shopping. Digitally-savvy companies now offer a broader selection of goods, faster delivery, secure payments and 24/7 mobile access. E-commerce represents the part of this new digital economy that consumers are most familiar with today, and the internet retail market is expected to grow at an average rate of 14% per year over the next five years1.

What does this mean for investors?

Traditional businesses are reaching a critical juncture where they must adapt to the digital age or be disrupted by more digitally-savvy firms. Retailers are rapidly adapting to the needs of these connected consumers to make shopping quicker, easier and more personalised. We believe this represents a significant structural opportunity for investors seeking long-term growth. Digital-native millennials are also reaching their peak spending years, while older, wealthier generations are also increasingly connected and comfortable shopping online.

Investing in the digital economy

We see these trends as creating opportunities across the entire e-commerce value chain as traditional businesses embrace the digital economy. We refer to these opportunities as the four Ds:

  • Discovery – companies that help people find products through search engines, or digital marketing platforms.
  • Decision-making – e-commerce companies, web portals and mobile apps which provide consumers with convenient and reliable product choices.
  • Delivery – companies creating fintech solutions to keep pace with consumers’ increasing expectations of simple payment processes, or using automation in order fulfilment for same-day delivery and returns.
  • Data & Enablers – digital companies which help traditional businesses migrate to the digital world.

Why now for the digital economy?

The digital economy revolution is still in its early stages, and there is a growing number of new business segments emerging. For instance, the ‘Sharing Economy’ comprises high-profile companies, which are currently private, that will likely list in the coming years, expanding the investable universe and diversification opportunities.

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The Evolving Economy at AXA Investment Managers

  • Established thematic investor

    30-year track record of thematic investing and product innovation

  • Innovative research structure

    Collaborative research structure to prioritise Evolving Economy exposure over traditional geographic and sector information

  • Deep insight to performance drivers

    Our proprietary thematic exposure database quantifies Evolving Economy exposure across a universe of c.11,000 companies*

  • Active, long-term approach

    We distinguish between short-term investment hype and investment reality by focusing on long-term commercial viability.

1 Citi GPS: Technology at Work v3.0, August 2017.
2 Euromonitor International, Citibank ‘Technology at Work v3.0’, August 2017
3 Deloitte, 2018 holiday survey: retail in transition, November 2018
4 S&P via Forbes, April 2015

*Ageing & Lifestyle - US Department  of Commerce, latest data available as of March 2018
*Automation - IFR World Robotics Report 2017, latest available data as of March 2018.
*CleanTech - Financier Worldwide, “Investing in the clean technology revolution”, January 2016
*Transitioning Societies - UN, correct as at March 2018
*Performance Drivers - AXA IM, correct as at 29 December 2017 

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This promotional communication does not constitute on the part of AXA Investment Managers a solicitation or investment, legal or tax advice. This material does not contain sufficient information to support an investment decision.

Due to its simplification, this document is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.

Issued in the UK by AXA Investment Managers UK Limited, which is authorised and regulated by the Financial Conduct Authority in the UK. Registered in England and Wales No: 01431068. Registered Office: 7 Newgate Street, London EC1A 7NX.

In other jurisdictions, this document is issued by AXA Investment Managers SA’s affiliates in those countries.

Not for Retail distribution: This document is intended exclusively for Professional, Institutional, Qualified or Wholesale Clients / Investors only, as defined by applicable local laws and regulation. Circulation must be restricted accordingly.

This promotional communication does not constitute on the part of AXA Investment Managers a solicitation or investment, legal or tax advice. This material does not contain sufficient information to support an investment decision.

Produced in the UK by AXA Investment Managers UK Limited, which is authorised and regulated by the Financial Conduct Authority in the UK. Registered in England and Wales No: 01431068. Registered Office: 7 Newgate Street, London EC1A 7NX.
In Belgium, this document is issued by AXA IM Benelux SA. Registered office: 1 Place du Trône – 1000 Brussels Belgium.