Shopify SHOP recently announced its partnership with Alphabet GOOGL split YouTube to allow merchants to sell through the video platform. Shopify intends to tap into the growing number of content creators who are significantly influencing consumer shopping habits.
Shopify’s recent partnership with YouTube builds on an already existing partnership with Google. SHOP has already integrated its local inventory data with Google features, which lets customers know when a particular product is available.
With the launch of YouTube Shopping on Shopify, merchants can integrate their online stores with one of the biggest entertainment platforms. This will allow merchants and content creators who have launched their own products to access a large pool of potential customers.
Merchants can not only tag and pin their products during live video streams, but also pre-record videos featuring a curated list of video-on-demand related products. They can also add a store tab below YouTube channels to showcase their products.
Commerce is currently a multi-channel event and YouTube is one of the most influential channels in the world. Brands try to create meaningful engagement with consumers, which puts content at the center of brand interactions. Content creators are now openly selling goods and creating their own brands or partnering with existing brands to sell products to customers using D2C channels.
Shopify Inc. Pricing and Consensus
Shopify Inc. price-consensus-table | Shopify Inc. Quote
Will the deal drive the price of Shopify stock?
Shopify’s e-commerce business has exploded during the COVID-19-induced pandemic, as global brands and smaller stores have created online platforms to sell products due to the closure of retail markets.
However, once the economy opened up and retail stores started to win back lost customers, Shopify lost momentum. Inflation and possible signs of recession have worsened the current market scenario, which in turn has slowed the growth of the e-commerce market.
As a result, investors are currently wary of the company’s future growth. Shares of Shopify plunged 78.1% compared to Zacks’ internet services industry’s 18.4% decline in the year-to-date period.
The company faces increasing competition from another e-commerce giant Amazon AMZN.
With the potential and changing dynamics of the global e-commerce industry with creators influencing the rapid growth of D2C channels, Amazon has also stepped up its efforts to attract more influencers to its e-commerce platform by offering signature bonuses and vacations. .
To counter growing competition and the current macro-economic turmoil, Shopify has invested heavily in building strategic integrations with major tech companies to deliver new services, like the Twitter The sales channel TWTR, Apple’s touchscreen payment feature for iPhone and Alphabet.
The Twitter sales channel allows merchants to connect with consumers directly from their Twitter profiles. Shopify noted that this is the first time a commerce platform has partnered with a social media company.
The recent integration with Apple allows shoppers to use Apple smartphones against the terminal to pay for goods. While this may not be a new feature in retail, Apple’s recent Pay Later installments have added a whole new dimension to retail marketing.
Although the short-term growth prospects look bleak for the company in the current market scenario, the recent integration with YouTube will help it generate new sources of revenue in the long term, which will have a positive impact on growth. revenues.
Shopify currently carries a Zacks Rank #3 (Hold). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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