Shopify (TSX:SHOP) (NYSE:SHOP) continued its efforts to partner with social media through a new partnership with Alphabet (NASDAQ:GOOGL) subsidiary YouTube.
Shopify Merchants Will Be Able to Sell Via YouTube
According to an announcement on Tuesday, creators on YouTube can now “easily integrate their online store” with the video site. The new initiative, YouTube Shopping, will allow Shopify to deliver live streams and videos and add a store tab that creators can install on their page.
David Katz, vice president of shopping products at YouTube, said a more seamless e-commerce integration that can help its creators’ entrepreneurial spirit is a crucial goal for YouTube. Extending content to online shopping is a logical step in building designer brands, he says.
“Commerce today is multichannel, and YouTube is one of the most influential channels on the planet,” said Kaz Nejatian, VP of Product at Shopify. “Shopify’s new YouTube integration will fundamentally change what opportunity looks like for independent brands in the creator economy.”
Shopify also plans to extend shopping features to its live, short and long-form videos.
YouTube said viewers in the United States, Brazil, and India will see products they can buy in the Explore tab starting next week, with more countries to roll out later this year.
The partnership expands the existing cooperation with Google. The e-commerce company also touts ties with TikTok, Facebook, Instagram, and other major platforms to connect social media and e-commerce.
Wells Fargo Has a Cautious View on Shopify
Wells Fargo warned of traffic pressure for Shopify with data for June showing visits were down 14% year over year and unique visitors to the login page of SHOP decreased by 5%.
Analyst Jeff Cantwell and his team said they were increasingly pessimistic about Shopify’s second-quarter gross merchandise value ahead of the July 27 report.
Wells data dive: “With the inclusion of June data, we now have a complete picture of SHOP’s web traffic trends for the entire quarter. Declines in both visits (-13% Y/Y) and unique visitors (-5% Y/Y) on a Y/Y basis were similar to 1Q (-14%/-4% respectively), while sequentially, visits (-5%) and unique visitors (-2%) both declined. Wider lens, unique visitors have now declined in the low- to mid-single-digits range Y/Y for the past 3 quarters (4Q21: -2%; 1Q22: -4%; 2Q22: -5%) and have also declined sequentially (Q/Q) in both quarters this year.”
Wells Fargo lowered its price target on SHOP to $40 split-adjusted from $55, which is based on 7.0x revised 2023 revenue guidance.
Longer term, Shopify is still rated overweight by Wells Fargo. It is called a unique disruptor that it sees moving into a period characterized by continued expansion of the company’s merchant base and deepening relationships with customers because it helps merchants consolidate their vendors.
Shopify is Cutting Internships After Stock Fall
Shopify is reducing the number of student internships it offers this fall as the company rethinks its hiring plans following a market crash that has seen its stock price drop more than 80% since November.
Shopify confirmed that it hasn’t canceled any signed offers to its fall interns, but the company said it was pausing recruiting efforts to “focus on more immediate initiatives.”
Shopify didn’t immediately say how many interns it plans to hire this fall or how that number compares to previous years.
Cancellations will primarily affect college and university students as well as some early-career workers. The company hires interns in three separate application cycles each year for roles such as developers, digital product designers, and data engineers.
The move comes as Shopify is reportedly cutting hiring on other fronts and cutting staff amid a downturn hitting the tech sector.
The Globe and Mail recently reported that the company is delaying a plan to overhaul its compensation model that would give employees more leeway to decide how much of their salary is paid in stock and how much is paid in cash. The report also says Shopify has laid off at least 50 people since April and paused dozens of job postings as it braces for further economic uncertainty.
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