Venture capitalist Marc Andreessen said that “software is eating the world” in a famous essay published in “The Wall Street Journal” back in 2011. He was referring to the way that software is reshaping a growing number of industries – from airlines to manufacturing — and how it’s becoming a necessity to embrace software to remain competitive.
The good news is that these trends have created many opportunities for investors keeping a close eye on Apple, MySize, BlackBerry, Alphabet and Qualcomm.
It’s hard to purchase clothing online because you can’t try it on beforehand. But, that hasn’t stopped online shoppers from purchasing billions of dollars worth of clothing and shoes online each year. Many shoppers purchase multiple items with plans to return the items that don’t fit. These shoppers are expected to return about a third of these goods, according to Customer Growth Properties (http://tinyurl.com/kq8mllp), which is twice the return rate of goods bought in stores.
The Retail Equation (http://tinyurl.com/lzk46se) reckons that merchandise returns cost retailers over a quarter of a trillion dollar in lost sales each year. While returned electronics may have a high resale value, clothing is often worth just pennies on the dollar after it has been returned. Many retailers opt to throw away 30% to 40% of goods that don’t make sense to send back through the reverse supply chain, which creates billions of tons of waste per year.
Software is truly “eating the world”and investors looking for above-market returns may want to look for software developers targeting the largest industries ripe for innovation. MySize could reshape the way that online retail works, while companies like BlackBerry are pivoting into enterprise software solutions that could power the next generation of autonomous vehicles.
