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Shopify Unveils Mobile App for Better Customer Interaction

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Shopify Inc. (SHOP - Free Report) has released a free mobile app for Apple (AAPL - Free Report) iOS devices. It has been made accessible to Shopify merchants in the App Store. The latest offering called Shopify Ping will be of extremely convenient to customers as the demand for mobile internet continues to rise.

The launch of Shopify Ping has made it easier for merchants to process payments, ship products along with securing financing through messaging for their working capital needs. The idea is to combine and collect messages, emails and other useful data used to interact with users via social media and bring them together in one single interface. Through this move, merchants leverage the transactional dataset to get meaningful insight into the sales channel growth prospects and consumer behavioral aspects. This improves their ability to target prospective customers more easily, manage conversation and reply in real-time, which drives sales growth.

Moreover, the new Shopify Ping will be compatible with Facebook (FB - Free Report) and Instagram ads helping merchants connect to a wide customer base, consequently increasing the number of active users on the platform. We also believe that the company’s strong partner referral system will boost merchant base, eventually driving top-line growth in 2018.

Merchant Solutions revenues soared 75% to $114.1 million in the last reported quarter, driven primarily by growth in Gross Merchandise Volume (“GMV”) which surged 64% from the year-ago quarter to $8.0 billion. Growth was also evident from robust performance of Shopify Shipping and Shopify Capital, revenues of each improving more than 50% on a year-over-year basis.

Mobile Focus

Mobile focus provides significant leverage to Shopify. The company launched its iPhone-based Shopify Mobile application way back in 2010. Mobile traffic to merchants’ stores continued to grow, reaching 75% of traffic and garnered 64% of orders for the quarter ended Mar 31, 2018, up from 69% and 59%, respectively, reported in the year-ago quarter.

We note that the company is benefiting from retail’s rapid transition to mobile and social sales channels. Per market research firm comScore, during 2017 holiday season (Nov-Dec), mobile commerce grew 44% from the year-ago period, with $17.1 billion spent through smartphones and tablets. Per eMarketer, M-commerce sales are projected to grow 32.7% in 2018. We believe that this rapid growth presents significant opportunities for Shopify in the long term.

Share Price Movement

Notably, the company’s shares have gained 82.9% year over year, substantially outperforming the industry’s rally of 8.9%.

To Conclude

Shopify provides a multi-tenant, cloud-based, multi-channel commerce platform for small and medium-sized businesses (SMBs). The company continues to launch a number of merchant-friendly applications to meet the requirements of a dynamic retail environment, consequently adding to merchant base. An expanding merchant base drives top-line growth. Moreover, it is benefiting from retail’s rapid transition to mobile and social sales channels.

Further, the company has been developing various apps, including various augmented reality (“AR”) based applications to streamline customer experience. The first-of-its-kind merchant product on the Shopify platform has been built on Shopify Mobile Buy SDK and Apple's ARKit, enabling users to check how the goods look in real life surroundings.

Moreover, investments in latest technological developments such as Virtual Reality and Augmented Reality will reap benefits for the company going forward.

Zacks Rank & Key Pick

Currently,Shopify carries a Zacks Rank #3 (Hold) stock.

A better-ranked stock in the broader technology sector is Western Digital Corporation (WDC - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.

Western Digital has a long-term expected EPS growth rate of 19%.

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