Shopify Stock Jumps 5% on YouTube Deal

Shopify (STORE) has signed a strategic partnership with Alphabet’s (GOOGL) Youtube. According to the company’s press release, the partnership will allow merchants to integrate their online stores with YouTube to sell items and reach over two billion monthly users.

Shopify stock jumped 5.6% as investors reacted positively to the strategic partnership.

Other Shopify Efforts to Counter the Post-Pandemic Slowdown

According ReutersThe association with YouTube comes barely a month after Shopify launched a new set of features allowing merchants to do business with others on Twitter (TWTR). It has also partnered with TikTok and Meta Platforms’ (META) Facebook and Instagram. Integrations were the catalyst for the quadrupling of orders on Shopify in the first quarter.

Shopify is under pressure to counter the post-pandemic slowdown in online shopping. According Reuters, it lost its spot as Canada’s most valuable company. It has also lost more than three-quarters of its value due to slowing online sales as consumers return to stores.

Shopify and YouTube: Live Shopping Features

The strategic partnership with YouTube will make it easy for Shopify merchants to showcase their products across different channels on the platform, which is crucial for increasing sales. Additionally, Shopify merchants will be able to sell their products in three ways through live streams, videos, and store labs. Additionally, merchants and creators will be able to connect with consumers in powerful ways.

Eligible creators who integrate their stores should take advantage of Shopify’s inventory sync tool to ensure that no product ever goes out of stock. In the press release, YouTube confirmed that viewers of the platform can make purchases without leaving the video platform.

According CNBC, the whole transaction will happen while watching a video on YouTube. Therefore, this should help YouTube reunite with viewers who would otherwise have had to leave the site to complete the transaction. Starting next week, YouTube viewers in the US, Brazil and India will start seeing products they can buy. There are plans to add support for the service in other countries later this year.

Wall Street is bullish on Shopify

The Street is bullish on the stock, with a moderate buy consensus rating, based on 13 buys, 14 holds and two sells. The average Shopify price target of $70.30 implies a potential upside of 104.54% from current levels.

Reviews of bloggers

Data from TipRanks shows that opinions of financial bloggers are 82% optimistic on SHOP, compared to an industry average of 65%.

Key takeaway for investors

Shopify has responded adequately to a slowdown in sales on its platform. A deal with YouTube and other social media platforms is a strategic marketing plan that should help marketers and creators reach a much larger target market.

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