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Shopify (SHOP) Merchants Witness Solid BFCM Weekend Sales

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Shopify Inc. (SHOP - Free Report) recently announced that its worldwide merchant base of over 500,000 sold more than $1 billion worth of gross merchandise volume (GMV) during the Black Friday and Cyber Monday (BFCM) weekend. Merchants also generated above $1 million transactions in a minute during the peak hour.

As a result, management was extremely positive about the strong response received by the small business owners and entrepreneurs who list their products on their portal, especially during a time which has always been under the dominance of prominent retailers.

Shopify noted that UK, Spain and South Africa were the top international sellers. Currently, the sales figure was the highest in the United States, California, New York and Texas. Mobile sales accounted for around 64% of the total figure, which had 10% year-over-year increase. In terms of sales volume, apparels, accessories and house wares were the leading product lines.

Recent Upgrades of the Platform

Prior to the BFCM weekend, Shopify’s platform was upgraded with enhanced features that aided the merchants during the sale. In fact, the company unveiled the BFCM tool box to assist merchants better connect with the customers.

In third-quarter 2017, the company’s Instagram channel was unveiled connecting merchants with a huge base of monthly active users. The newly launched eBay Inc. (EBAY - Free Report) sales channel has also been beneficial.

The shipping partnerships with the likes of UPS and DHL Express are added positives. The application called Live View helped in real-time reporting of the performance of the stores. Also, the discounting procedure was simplified.

In addition, the company’s new application called Buy Online for Shopify POS that enabled shoppers to try products in person and then buy those at a later convenient date is encouraging.

Furthermore, the improvisations of the checkout process by including features like Google Autocomplete and Checkout with Phone have made it easy for the consumers to use the platform.

Shopify’s Growing Merchant Base

Shopify continues to launch a number of merchant-friendly applications to meet the requirements of a dynamic retail environment, thereby adding to its merchant base. This, in turn, gets reflected in the compnay’s year-over-year top-line growth. The company’s effective partner ecosystem also helps it identify and reach out to the merchants, which otherwise unreachable.

In the third quarter, the company added quite a few prominent brands like Phoenix Suns, RBS, Josie Maran and Rebecca Minkoff. Consumer packaged goods providers like Gurmay, Mai, Blue Diamond Growers and Beer Nuts also enriched the merchant base.

We believe the company’s easy-to-use upgrades and expanding merchant base have boosted the GMV, which soared 69% from the year-ago quarter to $6.4 billion in the preceding quarter. This trend is anticipated to continue, thereby aiding the company to perform impressively, going ahead.

Zacks Rank & Key Picks

Shopify carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include NetApp, Inc. (NTAP - Free Report) and NVIDIA Corporation (NVDA - Free Report) sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NetApp and NVIDIA has a long-term earnings growth rate of 11.34% and 11.2%, respectively.

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