Looking for a stock that is benefitting from the novel coronavirus pandemic, but is also positioned for sustained growth after? Look no further than Canadian e-commerce superstar Shopify (NYSE:SHOP). After an impressive 2019, Shopify stock has been absolutely on fire in 2020.

With small retailers scrambling to shift to online, SHOP has gained 167% so far in 2020. And that growth isn’t likely to end any time soon.

Shopify stock would have been a prime candidate for my feature “The 7 Best Growth Stocks to Buy for Less Than $1,000” if it had been published in September.

However, despite dropping as low as $870 at the height of the September tech stock selloff, SHOP stock’s recovery has been swift. It quickly outgrew the less than $1,000 cutoff.

Pandemic Pushed Small Business Online, Shoppers Might Not Switch Back

In April, Harvard Business Review published “A Way Forward For Small Business.” In it, the case is made for small business building an online presence not just for the pandemic, but moving forward as well.

The first thing to consider is that people are building new habits right now. There are millions of isolated households whose normal routines have been upended, and just like them you have to experiment if you want to remain a part of their lives. Some restaurants are offering takeout comfort food, even if they usually just serve in their dining rooms. Retailers are emphasizing online experiences … Some of their new habits will persist after the pandemic, which means it is particularly important for you to figure out how to continue to offer services that deliver value during the crisis … Some of them may have decided that they like ordering online.

Barbara Kahn, a professor of marketing at the Wharton School, was interviewed by the Washington Post as part of a feature about small businesses rushing to get online and stay competitive during the pandemic. Professor Kahn pointed out the importance of shopping local, especially for younger generations:

We see Gen Z and the young people put their money where their mouth is. Now people think of the entire transaction of what they’re paying for. That there’s value in sustainable transactions, in supporting the local community, that’s over and above the value of the goods.

How are these two concepts related? Shopify has figured it out.

Shopify Helps Businesses Get Online and Retain Their Uniqueness

Small retailers have the option of selling online as a third party vendor through one of the big e-commerce chains. However, doing so means they are competing directly against other vendors selling the same or similar products — and often against the e-commerce company itself. They also lose that unique, local identity that many shoppers value.

With Shopify, small businesses and retailers get many of the benefits they would by joining a huge e-commerce site. This includes a professional website with a shopping cart, the ability to offer sales and discounts, credit card support, mobile payment support, and shipping solutions — including Shopify’s own, growing fulfilment network.

However, Shopify lets users completely customize their websites to retain that local, unique flavor. They have their own domain. Prices are affordable, ranging from $29 to $299 per month, plus a small percentage of transactions (ranging from 2.4% to 2.9% + 30 cents, depending on plan and payment method).

With the pandemic forcing small businesses online, and a desire to remain independent, Shopify added new accounts at a frenzied pace. In the second quarter, the company reported new stores created on its platform grew 71%, year-over-year.

With numbers like that, is it any wonder that Shopify stock is on fire?

Supporting Omni-Channel for Small Business

In May, Shopify launched an updated version of its POS solution for retailers. The beauty of Shopify POS is that it supports in-store shopping, integrated with online shopping. Inventory levels are tracked in real-time across all channels and multiple locations. It even supports mobile checkout for curbside pickup.

The Pro version of Shopify POS goes for $89 per month, and I can see adoption being huge when we transition to a post-pandemic world. Many of those small retailers are going to keep their online presence to serve the customers who have become hooked on online shopping.

With Shopify POS in the mix, they’ll have more reason to fully integrate into the Shopify platform. And spend even more on Shopify services.

Bottom Line on Shopify Stock

Shopify stock has increased in value by nearly 170% so far in 2020. Trading near $1,100 it’s not cheap. SHOP is a high-growth stock with a bright future and a stellar ‘A’ rating in Portfolio Grader. Yes, it would have been better to get onboard back in January when shares were going for $400, but even at current prices there is still plenty of room for growth.

— Louis Navellier

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Source: Investor Place