Does Your Portfolio Need Exposure to E-Commerce Innovation?

On the back of stimulus payments in the U.S. in early 2021, online purchases surged by $8 billion, and global online retail sales for 2021 grew 27.6% and totaled a record $4.3 trillion, according to Goldman Sachs.

Even as brick-and-mortar retailers have reopened around the world, customers have continued to shop online, creating extensive growth opportunities within the industry. 

E-commerce companies are investing heavily in data-driven infrastructure optimization and digital and smart logistics solutions to improve the shopping experience and drive revenue expansion. Fulfillment and omnichannel strategy investments are taking center stage, and they are broadening outside of the retail giants traditionally associated with these capabilities, according to Brook Dane, portfolio manager at Goldman Sachs Asset Management

Dane said that the industry is also seeing a ramp-up of fulfillment investments beyond the Amazons and Walmarts of the world. 

“Smaller e-commerce companies have notably stepped up their investments in the ‘last mile’ according to their unique contexts. In particular, companies with more specialized relationships with small- to medium-sized enterprises (SMEs) are investing to provide differentiated solutions for this client base,” Dane said. “Fulfillment is a major driver of churn for SMEs. Investing in fulfillment enables the often smaller e-commerce companies that are focused on these SMEs to protect and strengthen relationships with their highest-revenue customers and maintain high retention.”

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