Shopify Inc. (TSX: SHOP)(NYSE:SHOP) has kicked off 2018 with a bang, already tacking on nearly 26% year to date as of this writing. While I have my reasons to believe that Shopify stock won’t disappoint investors this year, recent news that broke out caught my attention, and should catch yours as well.
Shopify’s offices had a special visitor last week: Apple Inc.’s (NASDAQ: AAPL) CEO Tim Cook. When the leader of the Cupertino giant talks, you can’t help but pay attention.
Cook is a Shopify fan
Cook visited Shopify in Toronto last week to watch a demo of the e-commerce platform’s augmented reality (AR) technologies. Here’s what Cook had to say, according to Financial Post: “I’m a big fan of Shopify. I love the fact that their focus is on democratizing technology for entrepreneurs that are largely artisans and bringing their products to market so that these merchants can focus on what they are great at.”
Cook even believes that “AR is the most profound technology of the future.” AR technology superimposes computerized images on a person’s view of the real world, adding sounds, smells, graphics and so on to provide an immersive experience. The game Pokémon Go is one of the best examples of AR, in which virtual creatures appeared on a player’s smartphone screen as if they were present in the real-world surroundings of the player.
Apple is striving hard to make a breakthrough in AR by building the world’s largest AR platform through its software development toolkit called the ARKit, that it released some months ago to make it easier for developers to build AR apps for iOS. Apple is now reportedly working on an AR headset.
Cook’s interest in Shopify’s AR capabilities, therefore, isn’t surprising.
What Shopify plans to do with AR
Shopify’s CEO Tobi Lütke sees big potential in AR and wants Shopify to become an “AR-enabled e-commerce platform,” where small businesses — remember, Shopify is essentially a business platform for small and medium business merchants — can take advantage of the technology and transform the way we shop.
During its third-quarter earnings call, Lütke highlighted how Shopify had recently worked on an app with one of its customers, where it integrated Apple’s ARKit into their iOS app. By doing so, customers could virtually place products sold on Magnolia into their homes to see what it would look like before making a purchase decision.
Shopify plans to use ARKit to make headway into AR.
What it means for Shopify investors
Lütke is a new-age entrepreneur who doesn’t want to be left behind in the race as the world becomes technologically smarter. In case you didn’t know, Shopify was among the first establishments to allow merchants on its platform to accept payment in Bitcoin. As Lütke said during the company’s Q3 earnings call, “[W]e see our objective here at Shopify to just be ahead of the curve on what our customers might need.”
Shopify’s laser-focus on building a customer-centric platform where small merchants can access trends and technologies that are mostly thought to be viable for large-scale companies could be one of its biggest competitive advantages in coming years.
Shopify is already growing its merchant base and revenue at a torrid pace, and it’s likely to continue doing so as it innovates. Don’t miss anything that Lütke might have to say about AR and other plans during Shopify’s upcoming fourth-quarter and fiscal 2017 earnings and call mid-February. Meanwhile, keep an eye on new technologies, as chances are, Shopify might want to dabble in it.
