Industries with Opportunities in the Near Term
The unique challenges of a global pandemic are affecting different industries in different ways. Some industries, like brick-and-mortar retail and travel, have been hit hard and will be reshaped as companies file for bankruptcy. We expect that some will remain on their feet or regain their footing more quickly than others.
The obvious: online retail, cloud computing, and streaming
With everyone staying home, there are some industries that are (dare we say it) thriving versus surviving – including online retail, cloud computing, and streaming firms. Think of this as basically everything Amazon does, as they are one of the few large corporations spending money during this pandemic. But a company doesn’t need Amazon’s size to be standing tall.
Online retailers that offer what the public needs right now are experiencing demand – grocery services, meal kits, baby supplies, and home gardening to name a few. Retailers without large overheads are poised to bounce back when consumers are ready to spend on more discretionary items as well. On the flip side, we’re keeping an eye on big names like Nordstrom to see how they weather this particular challenge – great online service, loyal following, but a business model that doesn’t quite fit today’s consumer.
Any business that supports employees working from home should also be in position to survive and/or thrive. Zoom provided a big lesson here – not every service provider is ready to seize the opportunities created by the coronavirus. Zoom has addressed some of the security weaknesses that dinged its reputation recently and is working to address others. We’re watching to see if any competitors can take advantage of Zoom’s stumble or if consumers elect to stay with established names in the space. Superior technologies could provide an opportunity here.
Streaming content has been growing for several years and is largely owned by the biggest players in the space. That said, we believe there is room for disruption – one possible example includes new short-form video service, Quibi.
Digital healthcare is optimistic about adoption
Digital healthcare companies anticipate greater adoption of digital health services and more favorable regulatory and reimbursement environments, according to a recent survey. More than half of respondents said they expect the pandemic to increase patients’ acceptance of digital health technology, while 42 percent and 39 percent said they expect positive changes to the regulatory environment and payer acceptance, respectively.
Digital health services include telehealth or telemedicine, remote monitoring, self-testing, and at-home testing (see Pennsylvania company OraSure Technologies), data analytics, and symptom checkers. In addition, the majority of companies surveyed said that they have either launched or are planning to launch new digital services directly related to Covid-19.
U.S. manufacturing issues are complex, but needed
Global supply chains are challenging at this time. Many of us would love to see U.S. factories bounce back quickly and/or grow. The Harvard Business Review (HBR) explains why this is easier said than done, particularly when it comes to specialized facilities and skillsets. As HBR points out, we are excited to see innovators in this space who are unafraid to challenge the old ways of doing things (lean and just-in-time manufacturing isn’t the only way). Nimble manufacturers based in the U.S. will be very interesting to watch over the next year.
It is also important to remember that some spaces tend to be leading indicators of economic recovery. Semiconductors, or chip makers, tend to be one example – one that is easier to imagine since they already wear cleanroom suits, or “bunny suits,” during the manufacturing process.
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