Innovation: The Mandalorian, Revolution, and Eagles Autism Challenge
Last week was a relatively slow one for macro news that mattered.
- Federal Reserve Chairman Jerome Powell testified before Congress; consensus is that rates should remain unchanged following the next several FOMC meetings.
- There were a few economic releases; industrial production remains weak and GDP expectations continue to trend lower.
- Various officials commented on the ongoing U.S. / China trade talks; expectations remain optimistic and this is the main driver of daily market action.
Haverford had a much more exciting week. On Friday, Haverford’s Nonprofit Solutions team hosted a meeting focused on growing sustainable endowments. Over 150 clients and friends of the firm joined us at the Kimmel Center to hear from executive staff members of the Eagles Autism Foundation, the Museum of the American Revolution, and the Girls Scouts of Eastern Pennsylvania. One significant takeaway: growing a foundation’s financial resources is borne out of shared passion, an identifiable long-term vision, and innovation.
The Eagles Autism Foundation is bringing innovation to their donors’ resources through 100% transparency and a commitment to every dollar donated being funneled to peer-reviewed and ranked Autism research, whose successes and progress can be tracked. The Museum is committed to designing innovative programs to teach us the Revolution isn’t just a bygone war. It was the beginning of a great experiment in self-government, founded out of the unity of groups as diverse as the Oneida Nation and freed slaves, that persists to this day. The Girl Scouts build girls of courage, confidence, and character, in an effort to make the world a better place. The Scouts must be continually innovating their programs to remain relevant in a world full of distractions.
We are often asked about corporate innovation. Are the mega-cap companies capable of innovating? Yes, they are. Below are just a few examples of companies changing our lives through innovation.
On Wednesday, long-time portfolio holding Disney (DIS) reported that over 10 million households signed-up for their new streaming service Disney+ on day one. Disney is not the first mover—Netflix is— but they may be the best mover. Disney is continually innovating, and new content such as Star Wars spin-off The Mandalorian appeals to all generations. Disney+ is an example of old media tapping into an incredible content library to upend new media and again change the way consumers interact with media content.
Starbucks (SBUX) and McDonald’s (MCD) have modernized and personalized ordering, keeping up with consumer demands, including faster order times, delivery, and a digital interface. Starbucks has been highly successful with its app, which enables their customers to place orders ahead of time and have beverages or food items available upon arrival. McDonald’s has been modernizing its store base by adding order kiosks and has bought technology companies that will enable a more personalized drive through experience. Delivery has also made ordering from McDonald’s more convenient and is helping drive sales growth. It is no wonder both companies are leading their peer groups with strong sales trends in the United States and abroad.
Walmart (WMT) has an eCommerce platform that rivals Amazon in depth of offerings, delivery speed, and service. Walmart, already the country’s largest food retailer, is using that dominance to drive online grocery sales. Walmart’s national store base gives the retailer the flexibility to provide many convenient options for its customers, including home delivery and buy online pick up in store (BOPIS) options.
Medtronic (MDT) was highlighted in Barron’s this past weekend. Medtronic has been successful at miniaturizing their pacemaker. The Micra is just one-tenth the size of competing models and may now be able to treat dual-chamber pacing conditions. We are also excited for Medtronic’s launch of surgical robots.
United Parcel Service (UPS) is providing consumers faster delivery. They are the only company with an FAA license to operate drones for delivery. They recently completed the first commercial drone delivery through a partnership with CVS Health Corp (CVS). Drones will not only shorten delivery schedules, but will also allow them to provide services for difficult to reach areas.
Apple (AAPL) has done it again, unveiling yet another must have item for the holiday season with the Airpod Pro, which has noise canceling technology. As such, Apple’s Wearables (Apple Watch, Airpods and Beats) grew more than 50% last quarter. The tech giant continues to innovate on many avenues for growth, including Apple TV, the Apple Arcade for gaming and the Apple Card.
MasterCard (MA), long a leader in enabling credit and debit transactions, is displacing traditional payment methods and cash at an ever-increasing pace. Most recently, MasterCard is collaborating with the MTA in New York City to offer contactless payment options for the subway. We continue to see many growth opportunities for MasterCard as it continues to drive seamless card payment options for consumers and expands into payment options for small- and mid-sized enterprises.