Amazon’s influence

Putnam Investments, 06/25/20


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A thematic approach is a distinctive feature of Putnam Growth Opportunities Fund. The team analyzes global trends, as well as problems and potential solutions, to identify which themes could drive sustained growth for businesses over a multi-year time horizon.

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THEME: Amazon’s influence

By 2040, U.S. e-commerce retail sales could well surpass brick-and-mortar store sales. The influence of e-commerce is often referred to as “the Amazon effect” — the pressure placed on traditional retailers from online competition. Amazon’s platform has caused disruption and share loss for legacy retailers — a trend that we expect to continue well into the future.

As Amazon continues disrupting business models and industries, we are working to find companies with niche products or services that give them a competitive edge.

STOCK: The Home Depot (HD)

In the context of Amazon’s influence, we look for retailers with differentiated offerings that do not translate well to an e-commerce model. For example, those with products that are too heavy, products that need frequent and fast deliveries or returns, or services that are difficult to replicate in a digital setting.
  • The Home Depot targets the do-it-yourself and professional markets, and also offers installation services. Its products and services should prove resilient to the competitive threat from the likes of Amazon.

Home depot holdings: 1.65% (as of 5/31/2020) | See complete holdings


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