What’s boosting the U.S. consumer sector?

Mobile technologies are boosting sales in the U.S. consumer sector.

New sales-based and delivery technologies are making customer purchase experiences more convenient, says Michael Orndorff, vice president and portfolio manager at American Century Investments. He co-manages the Renaissance U.S. Equity Growth Fund.

Take Starbucks: the coffee chain “rolled out a mobile transaction app a few years ago,” he says. “And now, 18% of their transactions are completed on the app.” Orndorff has included the company in his portfolio for a number of years.

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As well, Starbucks has expanded that service to include mobile ordering at half of its U.S. locations. As a result, explains Orndorff, “Before customers leave the house in the morning, they can identify the cup of coffee they want and select the specific location they want to pick it up at.” So, by the time people arrive, their orders are ready.

Both consumers and companies benefit when new technologies are adopted, he adds. For a company like Starbucks, “[The use of the app] reduces the number of people waiting in line, and its throughput is better [since] more people are served over the course of the day. It also provides [the company] with more information about consumer[s].”

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And, since its introduction of mobile payment tools, Starbucks’ same-store sales have increased from 6% to 7%.

Another U.S. consumer company that’s banking on new technology is Whole Foods, which Orndorff says is now offering delivery services.

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When investing, he explains, “We’re looking for companies that are able to use new technologies, but also innovate at the product level [to] capture new opportunities and geographies. It’s the combined effect [of these efforts] that’s working to lift the sales opportunity for companies.”

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