Shopify
SHOP
recently unveiled a plethora of new features and updates to its first-ever semi-annual showcase — Shopify Editions.
Shopify launched more than 100 new tools, including ones to support business-to-business as it is expanding operations in the wholesale market, and TokenGate commerce, where customers can connect their crypto wallets to a store and enjoy special features.
The company has made strategic integrations with major tech companies to provide new services, like the
Twitter
TWTR
sales channel,
Apple’
s
AAPL
iPhone tap-to-pay feature and
Alphabet
’s
GOOGL
local inventory integration with Google.
The Twitter sales channel allows merchants to connect with consumers directly from their Twitter profiles. Shopify noted that it is the first time a commerce platform has partnered with a social media company.
The recent integration with Apple enables shoppers to use Apple smartphones against the terminal to pay for goods. While this may not be a new feature in retail but Apple’s recent Pay Later installments added a whole new dimension to retail marketing.
Shopify’s Google feature syncs local inventory data with the Shopify platform to let customers know when a particular product is in stock.
Shopify Taps into New Markets to Drive Performance
Shopify hit the jackpot during the COVID-19-induced pandemic as global brands and small stores were setting up online platforms to sell products as retail markets closed down. This created a boom in the e-commerce space.
However, this was a momentary hike in the market since the economy opened and retail stores started winning back their lost customers. Inflation and possible signs of recession have aggravated the current market scenario, which in turn slowed down the growth in the e-commerce market.
As a result, investors were wary of the future growth of the company. Shopify’s stock plunged 75.5% compared with the Zacks
Internet Services
industry’s decline of 25.1% in the year-to-date period.
To counter this, Shopify has forayed into the wholesale market, which is far bigger than direct-to-consumer from a market capitalization point of view.
The company is changing its operational strategies in the retail business segment to address the growing demand for consumer-to-consumer rather than direct-consumer.
People are shopping via social media platforms where people can advertise their products and pay through their phones. The recent partnership with Apple and Twitter will help Shopify address the changing dynamics in the retail market.
Shopify has entered the NFT space with its TokenGate commerce platform, which will aid it in attracting a whole new group of customers and gaining access to a whole new asset class.
The new unique feature of this platform is that the company is not operating as a NFT trading or selling platform. Rather it provides NFT holders exclusive access to special products, perks and experiences unavailable on other platforms.
Although the short-term growth prospects look bleak for the company under the current market scenario, the recent launch of new products and foray into new markets will help it generate new revenue sources in the long haul, thus impacting revenue growth positively. This will impact shareholders’ wealth positively.
Shopify currently carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
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