Shopify’s mission has long been to is to arm the rebels. Now, it’s making necessary changes to its business model in order to stay relevant as the strategies of the “rebel alliance” evolve with the times. As we wrote at the precipice of the pandemic:
When you arm the rebels, do whatever you can to make sure that they win.
After specializing in developing software for websites and offering eCommerce tools for DTC brands, Shopify is now investing its time in helping retailers sell more in offline retail. Its new payments device, called Shopify POS Go, lets merchants handle in-store checkouts that connect to their online Shopify stores:
Made for modern retail: POS Go is Shopify’s most powerful, secure, and revolutionary mobile POS device that fits in your hand. Turn it on and instantly connect to critical features to grow your business.
POS and in-person payments have become one of Shopify’s fastest-growing divisions, Quartz reported. The growth reflects a post-pandemic return to in-store shopping as well as brand recognition that the direct-to-consumer strategy is an incomplete distribution strategy. As more brands push into in-store retail, having inventory awareness across all channels is a must. From Quartz:
For example, many shoppers enjoy being able to buy online and return in person, or vice versa, but disjointed software for these kinds of hybrid interactions can turn that into a headache for many merchants.
Shopify isn’t just recognizing that there’s a void to fill in physical retail, it’s right-sizing a previously “overly aggressive bet on the speed at which the economy would move online,” according to the Financial Post. Indeed, Shopify was the primary infrastructure of the venture-financed DTC era. It made it possible for both resource-rich and resource-poor brands to quickly and easily start and operate online stores. The more that this class of brands built their businesses online, the more Shopify expanded upon its own capabilities. These add-on tools included email marketing plugins and customer acquisition integrations. Over the years, it adapted to meet the needs of its rebels and it’s doing the same now as it expands to account for offline sales.
According to Shopify, this particular period in its fabled history is somewhat of a reckoning. While sales shifted online during the pandemic, they’ve now moved back offline and brands with only online DTC levers to pull for growth are at a great disadvantage. The move to the marketplace and the in-person retailer have been closely followed by 2PM:
El modelo de mercado será cada vez más importante para las marcas nativas digitales a medida que el comercio electrónico siga evolucionando y las fronteras se difuminen. Los minoristas más capaces llegarán a los clientes allí donde estén.
Shopify needs to follow the brands as well, in the best way that the company can, otherwise it risks irrelevance. The company spent the summer months shaken by the clear signs that online commerce’s heyday during the pandemic was not to last after restrictions were lifted. Shopify announced that it would be cutting 10% of its workforce in July, with CEO Tobi Lutke taking the blame for betting too big on eCommerce’s quick growth jump. 2PM reported at the time:
Marketplace strategies for brands is the answer to customer lifetime value. Just this week, Glossier signed to sell within Sephora. Just a few years prior, Glossier was adamant that it would remain a direct brand. More DTC retailers will move to develop wholesale relationships with top marketplaces.
Hay indicadores que sugieren que los mercados en línea son más resistentes durante los periodos de dificultades económicas. Si nos fijamos en una muestra representativa de valores minoristas de comercio electrónico (Amazon, JD, Alibaba, Ebay, Etsy, etc.) y los comparamos con valores de software (Shopify, BigCommerce, etc.), los marketplaces obtuvieron mejores resultados que las empresas de software. Y aquí es donde las cosas pueden tomar un giro positivo para Shopify.
The momentum is moving in the direction of marketplaces, especially the largest of them (to include Walmart). Shopify is still the infrastructure for many brands’ who require online presences but something has to give. The question becomes, how does Shopify equip brands that are moving into the enterprise marketplace format? Shopify must move beyond app integrations to meet its vendors where they want to be. That is, in physical stores and / or stocked in the warehouses of these top marketplaces. How does Shopify apply its new focus as (an enabler of physical retail) to a stodgier part of the retail industry? I believe that Shopify’s next win will be a major equipment contract with a national retailer, a move that will communicate Shopify’s commitment to omnichannel retail and the many merchants that now require it to grow.The solution may be in the words from Shopify’s VP of Product, Arpan Podduturi:
[Shopify’s POS Go] is the type of experience that you would find at an Apple store or Nike store but given to the masses to small-medium businesses all over the world who can now bring that level of service to their stores.
A Shopify partnership with a retailer as notable as Nike would capture the imaginations of Wall Street, its many merchants, and the marketplace retailers who do want greater access to the brands that Shopify considers its core audience. SHopify has to make moves now though – the brands certainly are.
Por Web Smith | Editado por Hilary Milnes con arte de Alex Remy
