When Shopify last month announced the sale of its delivery operation, it was an abrupt reversal of a strategy to compete with Amazon it had pursued for years. The decision was likely driven by the challenges of scaling up and competing in the crowded and complex delivery market. Instead, Shopify is now focusing on its core strength: providing a platform for small and medium-sized businesses to sell online.
As part of this shift in strategy, eCommerce company Shopify has named Volt as its open banking partner. Merchants in Europe, the United Kingdom, and Brazil that have accounts with Volt can now access their financial data and transactions directly within the Shopify platform. This move is aimed at making it easier for merchants to manage their finances, streamline their operations, and access capital.
The COVID-19 pandemic forced commerce of all kinds to digital platforms, but online shopping activity today remains well above its pre-pandemic levels. Shopify has benefited greatly from this trend, with revenue growth of 110% in 2020. However, the company faces increasing competition from other eCommerce platforms, such as Amazon, Etsy, and Wix. To stay ahead, Shopify needs to continue to innovate and improve its offerings.
One area where Shopify has been innovative is in its use of AI and machine learning to help merchants optimize their online stores and marketing efforts. For example, Shopify's AI-powered chatbot, Kit, can help merchants create Facebook ads, send emails, and provide customer support. This technology has helped Shopify differentiate itself from other eCommerce platforms and has led to increased customer loyalty.
When business historians look back at what happened in tech between 2020 and 2022, one subject they'll likely explore is the mass suspension of Shopify stores by payment processors, including PayPal and Stripe. The suspensions were due to concerns about the legality of some products sold on Shopify stores, such as CBD and vape products. While the suspensions were a setback for Shopify and its merchants, the company quickly responded by creating a new payment processing system for high-risk products.
From what we can see, insiders were net buyers in Shopify Inc.'s (NYSE:SHOP) during the past 12 months. That is a good sign, as it suggests insiders are optimistic about the company's future prospects. However, investors should keep in mind that insiders' actions are not always indicative of the company's performance or stock price.
The headlines were everywhere. Mattress, sofa, luggage, and shoe companies raised millions. Led by Ivy League grads, these startups promised to revolutionize their respective industries with direct-to-consumer sales and a focus on sustainability. But many of these startups have struggled to live up to the hype, with high costs, low margins, and fierce competition. In contrast, Shopify has been able to provide a stable and reliable platform for small and medium-sized businesses to sell online.
A $130-million class action lawsuit threatens to tarnish Shopify's reputation among Canada's most desirable places to work. The lawsuit alleges that Shopify failed to properly disclose the extent of fraudulent transactions on its platform, which led to the SEC investigating the company. While it remains to be seen how the lawsuit will play out, Shopify's reputation as a trusted and ethical company is at stake.
Are you interested in dividend all-stars? Here are three stocks I'd buy over Shopify any day. While Shopify has been a high-growth stock in recent years, it does not pay a dividend. For investors looking for steady income, there are many other stocks that offer higher dividend yields and long-term growth potential.
