Change is constant and necessary for survival in the constantly evolving environment. In this e-age, cutting-edge technologies are shaping every facet of the ecosystem, from business to business.

The pace of technological adoption varied between different sectors of the economy and business. However, the COVID-19 pandemic gave this one another boost to become a lifeboat for the small and medium-sized businesses that had slowly started moving.

These stores traditionally operated from their brick and mortar stores and suffered massive losses when people were forced to stay inside. At that time, it was of paramount importance to adopt modern retail technologies that can help them compete in any retail environment and interact directly with their customers from anywhere.

As a result, investments in technology overhaul to completely transform processes on online platforms for businesses have skyrocketed since last year. And this transition is made possible by companies that provide a fully digitized operating system with tools and functions.

Increasing expenses for increasing automation

By new American Express Co. (AXP quick offerAXP Free Report), automation is the fastest anticipated area of ​​growth among US companies surveyed. While many companies have already digitized in recent years, the pandemic has helped accelerate this trend on a wider scale.

The GBSI found that out of the six countries surveyed, US companies had the highest level of automation in most business functions, including purchasing / procurement, payroll, payment from suppliers, supplier analysis, and synchronization of payments with the existing ledger. In fact, nearly half of the US companies surveyed automate most or all of the processing (48%) and receipt (51%) of payments from business customers. In addition, there are other opportunities as nearly half (46%) of organizations plan to automate or further automate each of these functions over the next 12 months.

Overall, according to the study, US companies’ technology spending rose an average of 4.1% to an estimated $ 25 billion between the first quarter of 2020 and the same period in 2021. Almost a quarter (22%) of the US companies surveyed are increasing their online presence, which is one of their top three strategic goals.

In the next 12 months, US companies cite increasing profitability (34%), securing new business or attracting customers (32%) and maintaining competitiveness (31%) in the survey.

Stocks in mind

Below we mention the companies that hold companies in their hands and provide them with all the tools and platforms they need to transform their business. All stocks currently have a Zacks rank of # 3 (Hold). You can see the full list of current Zacks # 1 Rank (Strong Buy) stocks here.

Shopify Inc. (SHOP quick offerBUSINESS Free Report) offers a multi-tenant, cloud-based, multi-channel commerce platform for small and medium-sized enterprises (SMEs). It is well positioned to benefit from the growth in retailer numbers as more join its cloud-based platform.

In the latest quarterly release, revenue grew 110% while subscription solutions revenue grew 71% year-over-year as more merchants joined its platform.

The company’s focus on developing the Shopify Fulfillment Network, its all-in-one mobile shopping assistant called Shop, should attract more merchants to its platform.

Shopify’s balance sheet strength increases its liquidity position minus any liabilities.

The company’s growth in 2021 could slow somewhat due to the launch of vaccines, pushing higher consumer spending on services and offline shopping into the second half of the year. But the online transition revolution will continue even after the pandemic subsides. This long-term change offers the company ample opportunities for growth.

In six months, the stock is up 16.7% compared to the industry’s 20.6% growth

Image source: Zacks Investment Research

Wix.com Ltd.‘s (WIX Quick QuoteWIX Free Report) provides web development, design, solutions and apps through an online platform that enables businesses, organizations, professionals and individuals to create a solid digital presence. Its user-friendly applications and the cloud-based platform attract traders.

Management believes that registered users will increase as the company expands shipping partners and adds functionality. Its product innovations and partnership agreements will expand the user base that will increase sales in the long run.

The company is on track to acquire Rise.ai, which aims to improve its offerings on the WixeCommerce platform.

Management is optimistic about its potential and believes that Wix will become the main engine of the Internet and that in the next five to seven years, 50% of all innovation on the Internet will be on Wix.

For the first quarter, the company’s collections were $ 351 million, 41% more than a year earlier. Over the years, it expects future collections from the existing cohorts to total $ 14.2 billion.

The balance sheet is also solid with a favorable dent. The positive net cash balance provides the flexibility needed to pursue any growth strategy, be it through acquisitions or otherwise.

In six months, the stock is up 1.1% compared to the industry’s 15.8% growth

Zacks Investment ResearchImage source: Zacks Investment Research

Lightspeed POS Inc. (LSPD quick offerLSPD Free Report) is a leading provider of software, solutions and support systems for small and medium-sized retailers and restaurateurs.

The company delivered strong results for the most recently reported quarter and year, with small and medium-sized businesses increasingly turning to the company’s cloud-based trading platform to enable their omnichannel strategies. Fiscal year 2021 revenues increased 84%.

In the current fiscal year, the company announced three landmark acquisitions, namely Vend, ShopKeep and Upserve, and launched a number of new offerings such as Lightspeed Capital, e-commerce for restaurants and Order Ahead. These strategies are likely to contribute to growth.

The company’s main focus is on digitizing the catering and retail sectors, the majority of which do not yet have a fully-fledged digital operating platform. Lightspeed’s niche position in its operating landscape promises to be a lever in the years to come.

While the company doesn’t need to make profits just now as it is still in the early stages, this shouldn’t intimidate investors as its fundamentals bode well for the long term and have a clear long-term growth path ahead

In six months, the stock was up 18% while the industry was down 9.5%.

Zacks Investment ResearchImage source: Zacks Investment Research

Bottom line

Several companies are innovating from the physical to the digital. This trend will drive demand for products and services from the above companies. These stocks are safe long-term investment options.

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