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Feb 15, 2018

Shopify eyeing voice-enabled buying; Q4 revenue surges

Could Shopify be the next BlackBerry?


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Shopify Inc. is eyeing voice-enabled e-commerce and says it will likely join in on the trend if voice-activated devices continue to rapidly pick up users.

Voice-enabled artificial intelligence, which allows shoppers to make a purchase by talking to an internet-connected home device, is being hailed by some as the future of retailing.

Currently, the big players in the field are digital voice assistants like Siri, Alexa and Google Now, which already allow shoppers to make payments, arrange shipping or products, build shopping lists and track orders.

"If that sort of vocal user interfaces or voice-enabled commerce is meaningful to your audience, I think that absolutely that's a place where Shopify will be," senior vice-president of data and analytics David Lennie said Thursday on a conference call.

The Ottawa-based online store platform hinted at the potential move after it reported a better-than-expected fourth quarter on Thursday, during which revenue jumped 71 per cent compared with a year ago.

The company, which keeps its books in U.S. dollars, said it lost $3 million or three cents per share in the last three months of 2017, narrowing a loss of $8.9 million or 10 cents per share a year earlier.

Revenue totalled $222.8 million, up from $130.4 million.

On an adjusted basis, Shopify earned $14.7 million or 15 cents per share for the quarter, compared with an adjusted loss of $400,000 or zero cents per share in the fourth quarter of 2016.

Analysts had expected an adjusted profit of five cents per share and $209.3 million in revenue, according to Thomson Reuters.

The revenue surge comes as Shopify continues to dabble in rapidly-evolving technologies such as artificial intelligence and virtual and augmented reality.

It currently uses such technologies to allow shoppers to customize products on their phone or computer and then visualize them in their own home with a headset, and to offer in-game purchases of physical products.

It's earned praise from Apple CEO Tim Cook, who got a peek at Shopify's AR and VR offerings on a recent visit to the company's Toronto office.

"We've actually been very early to the AR and VR space and so we have teams that are always working on sort of the cutting-edge of technology and thinking about how could we deploy (voice-enabled e-commerce) in a way that will transform commerce," said Lennie.

Aside from technology, the company is also expected to benefit from a contract it landed with the Ontario government, which said earlier this week that it would use Shopify's e-commerce platform for cannabis sales online and in stores as part of its plan to be the province's sole distributor of legal recreational marijuana.

Its stock closed up 0.42 per cent at $171.91 Thursday. It has recovered from a steep sell-off in October 2017, sparked by allegations by high-profile short-seller Andrew Left of Citron Research. He said the company, which provides businesses with online checkout services, doesn't comply with Federal Trade Commission guidelines and suggested the stock's value is closer to US$60 before any potential FTC involvement.

Shopify CEO Tobias Lutke refuted the claims and told investors in October that the company sells an e-commerce platform -- not business opportunities -- and complies with FTC regulations.