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Shopify has long been known for helping new and emerging brands get off to a fast start in ecommerce. To kick off 2023, the software company is planting a flag in the enterprise market.
The news: Shopify on Tuesday launched Commerce Components by Shopify (CCS), a product offering that allows larger, more established brands and retailers to access parts of its ecommerce infrastructure. With the new package, Shopify is aiming to provide a modular approach for enterprise retailers that typically require more customized systems to run their digital commerce operations. “Enterprise retailers can take the components they need, and leave what they don’t, and developers are free to build with any front-end framework they choose,” Shopify writes.
What's in it? As part of CCS, Shopify said it is rolling out new back-office management that is designed specifically for enterprise retailers. At launch, the product offerings include:
- Checkout: Shopify’s checkout will be available to enterprise brands. This will also open up access to customers who use Shop Pay, which is Shopify’s checkout service for storing payment info and tracking orders.
- Flexible APIs, which now have no rate limits. These allows brands and retailers to integrate existing services with Shopify components.
- Infrastructure: Shopify says it has over 275 network edge points globally, which enables speed.
- Ecosystem: Shopify has a dedicated account team with solutions architects, specialized support and a network of seasoned agency partners and system integrators like Deloitte, EY, and KPMG.
- Find a full list of the 30+ components here.
Key quote: “Commerce Components by Shopify opens our infrastructure so enterprise retailers don’t have to waste time, engineering power, and money building critical foundations Shopify has already perfected, and instead frees them up to customize, differentiate, and scale,” said Harley Finkelstein, president of Shopify, in a statement.
Who is using it? Mattel, for one. The Barbie and Hot Wheels maker is bringing its entire portfolio of toy brands to Shopify. The companies first worked together on a creator platform called Mattel Creations, and are now expanding their work together.
Shopify goes bigger: Tuesday’s launch is a product-level outgrowth of rhetoric that has been emerging from Shopify in recent months. With existing clients like Coty, Spanx and Staples, Finkelstein recently told analysts that growth of enterprise clients using the existing offering Shopify Plus outpaced that of Shopify’s overall GMV in the third quarter. Coupled with recently-launched hardware that powers in-person retail, the strategy reflects an aggressive roadmap for Shopify that sets up the Ottawa, Canada-based company to serve markets beyond the digitally-native, direct-to-consumer brands and small businesses with which it has long been associated.This comes as DTC brands are facing challenges following post-lockdown shifts in shopper behavior, Apple’s App Tracking Transparency changes and a pullback of once-plentiful venture capital. Many in retail are also bracing for a difficult year as a result of inflation and interest rates. Landing larger clients can deliver sizable and stable recurring revenue from brands with established footholds in the market. That’s a good way to ride out the storm.
Let’s be clear: Shopify is not alone here. There is already a big, existing market for enterprise ecommerce, and more platforms are gearing up to make a splash in it. In recent weeks, BigCommerce also shared plans to shift its entire sales and marketing infrastructure toward growing its enterprise account. Both companies conducted layoffs in 2022 as they shifted course.
Trends to watch:
Composable commerce. Remember the term. This launch also points to a trend in ecommerce software: Brands and retailers, especially on the larger side, are increasingly opting to build commerce technology stacks by combining elements from a number of different providers. They want to create their own systems that meet their needs, and they want the different parts to be able to easily work together. This points to an environment where choice is prized, and the best components get selected. With CCS, Shopify is signaling that it believes it can stand out with checkout. In turn, partnerships with consulting firms like Deloitte, EY, and KPMG show it is tuning for how these solutions are sold in the market.
Land and expand: The progression with Mattel shows how enterprise sales presents the opportunity to take a "land and expand" approach, as Finkelstein put it to analysts. Start with one part of a brand's work, delight them and there may be a chance to bring in the whole account.
Trending in Retail Channels
Labor disputes on the West Coast could cause further disruption heading into peak season.
When the first half of 2023 is complete, imports are expected to dip 22% below last year.
That’s according to new data from the Global Port Tracker, which is compiled monthly by the National Retail Federation and Hackett Associates.
The decline has been building over the entire year, as imports dipped in the winter. With the spring, volume started to rebound. In April, the major ports handled 1.78 million Twenty-Foot Equivalent Units. That was an increase of 9.6% from March. Still it was a decline of 21.3% year over year – reflecting the record cargo hauled in over the spike in consumer demand of 2021 and the inventory glut 2022.
In 2023, consumer spending is remaining resilient with in a strong job market, despite the collision of inflation and interest rates. The economy remains different from pre-pandemic days, but shipping volumes are beginning to once again resemble the time before COVID-19.
“Economists and shipping lines increasingly wonder why the decline in container import demand is so much at odds with continuous growth in consumer demand,” said Hackett Associates Founder Ben Hackett, in a statement. “Import container shipments have returned the pre-pandemic levels seen in 2019 and appear likely to stay there for a while.”
Retailers and logistics professionals alike are looking to the second half of the year for a potential upswing. Peak shipping season occurs in the summer, which is in preparation for peak shopping season over the holidays.
Yet disruption could occur on the West Coast if labor issues can’t be settled. This week, ports from Los Angeles to Seattle reported closures and slowdowns as ongoing union disputes boil over, CNBC reported. NRF called on the Biden administration to intervene.
“Cargo volume is lower than last year but retailers are entering the busiest shipping season of the year bringing in holiday merchandise. The last thing retailers and other shippers need is ongoing disruption at the ports,” aid NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “If labor and management can’t reach agreement and operate smoothly and efficiently, retailers will have no choice but to continue to take their cargo to East Coast and Gulf Coast gateways. We continue to urge the administration to step in and help the parties reach an agreement and end the disruptions so operations can return to normal. We’ve had enough unavoidable supply chain issues the past two years. This is not the time for one that can be avoided.”