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With tools that made it easy for entrepreneurs to set up online stores and sell consumer goods, Shopify became synonymous with the rise of the direct-to-consumer (DTC) model. The Ottawa, Canada-based company helped to normalize a setting for ecommerce marketplaces beyond Amazon, and created its own ecosystem that flipped the established model on its head in the process. Over the last decade, the brands that set up web-based shops were many, but a large number were powered by the Ottawa, Canada-based company's software and the DTC playbook it enabled.
Now, following a spike in digital adoption that included shopping during the pandemic, ecommerce generally and the DTC approach in particular are more established parts of how we shop. This has led a growing number of platforms to make space for commerce. In turn, DTC brands have more places than ever to meet potential customers. These startups are not only advertising on Facebook and directing customers to their websites. They’re also testing new marketing channels and social media shopping functionalities, expanding to physical stores, exploring web3 and more. What's more, the merchants that tapped Shopify to get started are now seeking tools to scale.
It’s in this context that Shopify on Wednesday rolled out Editions, a look at more than 100 recent product releases that expand the scope of what the company offers merchants. Some of the releases are freshly announced, while others were rolled out in recent months. Each is the reflection of an identification of specific places in a merchant’s process where software can play a role in solving a problem, product strategy about the best approach to address it and engineering that brings a solution to life.
Taken together, they make a bigger point about commerce and how it has evolved. Shopify said Editions points to a new era: Connect to Consumer (C2C).
So what will characterize the C2C era? Admittedly, Shopify didn’t share a treatise to define it. However, it's clear that each product release is part of the equation.
Given that, here’s a look at 10 Shopify product updates that reflect key themes shaping commerce. These are just some of the 100+ features Shopify detailed with the release of Editions, but they each point at a bigger shift taking place:
Selling to businesses, as well as consumers
Shopify merchants are increasingly selling to other businesses, while others want the opportunity to do so, the company said. This is reflected in part through a rise in DTC businesses selling wholesale. To enable growth in this area, Shopify is debuting a new feature called B2B on Shopify. Initially available to Shopify Plus members, this will allow merchants to sell to businesses using the same platform where they sell to consumers. Shopify created a store experience that is designed to be optimized for businesses, with considerations such as bulk buying and flexibility in pricing for individual customers. It also partnered with ERP providers such as NetSuite, Brightpearl, and Acumatica to integrate data.
Social media is becoming more shoppable, as platforms integrate features to enable not just discovery of products, but also buying and selling. A new Shopify partnership with Twitter is growing the presence of stores on the bird app. Shopify has a new app allowing brands to create a sales channel through Twitter. This allows brands to showcase products on their Twitter profile through Twitter’s Shop Spotlight or Twitter Shops. The idea is that after a user discovers a brand's product on Twitter, the path to a purchase gets easier.
DTC brands expand IRL
As they embrace a return to in-person activities and seek to create a venue to meet shoppers in-person, direct-to-consumer brands are adding physical retail channels. At the same time, they’re embracing digital tools to help reinvent the experience. Shopify itself is seeing this, as the company’s GMV for offline commerce grew 80% year-over-year in Q1 of 2022. A new Shopify release called Tap to Pay on iPhone allows for more seamless payments. Partnering with Stripe, Shopify created a payment tool for iPhone that doesn’t require additional hardware. This is initially rolling out for Shopify point-of-sale merchants, but the company pointed to potential for using it in other settings like farmers markets, pop-up shops and new stores.
Search online, buy local
Google has noted that searches for “in stock near me” are an increasing trend of online shopping behavior. It reflects a consumer mode where a shopping journey might start online and end at a store, or vice versa. Shopify has a new product enabling brands to sync local inventory. Available through Shopify’s Google channel, this allows brands to automatically notify customers when a product is available in store.
Access through digital ownership
The rise of web3 will usher in an era where an exchange of currency for ownership extends to digital items, as well as physical ones. Non fungible tokens (NFTs) are one of the early constructs allowing brands to offer digital ownership. Rather than selling goods one-to-one, many brands see these as an opportunity to power loyalty by allowing NFT ownership to build communities and unlock rewards. A new release called Tokengated Commerce on Shopify allows merchants to give NFT holders access to perks and products. This gives shoppers the ability to connect their crypto wallets to a Shopify store. Then, they can use their NFTs to unlock experiences. There’s also collab opportunities, as brands can invite NFT holders of other brands to their storefront where a specific experience is being offered.
On the topic of loyalty, Shopify also put the early word out about a new product called Shop Cash that will provide rewards through the Shop app, and allow brands to boost their own presence, providing a promotion tool.
Customize your store
The trend toward headless commerce reflects a desire by brands to create experiences that are unique to them. Shopify previously released Hydrogen and Oxygen, a set of developer tools to create custom storefronts. Now, it is providing tools for the backend. Shopify Functions allows developers “to extend or replace Shopify’s backend logic with custom code,” Shopify said. An initial tool called Discounts is designed to enable the building of customized volume discounts or free gift with purchase offers.
Advertising and privacy mix
Rising customer acquisition costs and privacy-oriented changes rolled out by Apple with iOS 14.5 are changing the landscape for brands in digital advertising. Where Facebook ads were once a primary source of scale, brands are now exploring other advertising venues, like TikTok and even offline billboards. However, Meta properties remain a part of the marketing mix, and brands are seeking new tools to succeed there in a post-App Tracking Transparency world. In response to this, Shopify rolled out Shopify Audiences last month to allow brands to leverage Shopify’s network to build high purchase intent audiences, and export them to other ad networks. Read a full breakdown here.
Cross border commerce
As the saying goes in international trade circles, a business is international once it stands up a website, with a digital presence enabling access to a brand from anywhere. Selling goods internationally requires a considered approach, however, as currencies, culture and regulations create unique selling environments. Shopify last year released Shopify Markets to enable global sales. This allows businesses to create customized storefronts for particular markets, sell in the language of a country and collect fees for selling across borders.
Creators and commerce meet
Influencers and creators rose as a force in ecommerce as Instagram and then TikTok became key channels. To provide tools for brands, Shopify in April acquired Dovetale, a platform which helps brands manage influencer campaigns. As they take a bigger role in connecting people and products across different platforms, creators are forging a bigger presence as entrepreneurs themselves, as well. To that end, Shopify released Linkpop, a link-in-bio tool that allows creators to promote their presence across multiple business lines and channels, and syncs with a product catalog.
Fast and timely delivery
As ecommerce becomes more normalized and shoppers move across online and offline channels, consumers will increasingly want items to be available where they are. At the same time, supply chain issues of the last two years made fulfillment and logistics a top concern for brands and customers alike. To give brands a way to provide peace of mind for consumers, Shopify is rolling out Shop Promise, a badge that provides a two-day delivery and “hassle free returns.” Shopify is also building out a fulfillment network to power merchants shipping and delivery behind the scenes. It acquired logistics platform Deliverr in May, and is looking to combine it with its own capabilities and previously acquired fulfillment tech company 6 River Systems. Check out our full analysis here.
Trending in Retail Channels
Can Shop Cash entice more users to use the app for browsing and buying?
Shopify is launching a new rewards program for items purchased through its checkout system.
Shop Cash will provide the opportunity for consumers to earn 1% back on purchases made through Shop Pay.
The feature includes a direct tie-in with the Shop app. Users can check their balance through the app, and the rewards are redeemable for future purchases through Shop, as well.
“This is a coming of age moment for Shop. It’s become an incredible app that allows shoppers to discover great brands, check out with one tap, and track orders in real time,” said Harley Finkelstein, president of Shopify, in a statement. “Shop Cash represents the next evolution of Shop, connecting independent brands to more shoppers, and rewarding those shoppers for being loyal fans.”
The launch falls on Shopify’s 17th birthday, so the ecommerce software company is giving away Shop Cash to celebrate. For Shop Day, Shopify partnered with dozens of merchants, including Trixie Cosmetics, MrBeast and Monday Swimwear. They’ll share custom links across channels that offer cash to spend on the Shop app. In all, Shopify will give away more than $1,000,000. Brands will also be running exclusive Shop Cash offers throughout the day.
The rewards program marks a new way that Shopify is aiming to transform Shop into more of a shopping app where users can discover new items, extending beyond its initial use for post-purchase order tracking and management at launch in 2020.
Shopify has been making moves over the last year to provide more opportunities to browse and buy recommended products, as well as giving brands more tools to showcase storefronts and tell their stories. With Shop Pay, the app offers one-click checkout. There are signs that it is all inspiring users to seek out the app. Shopify said 35% of the orders on the Shop app are repeat purchases.
With more brands joining the app and infrastructure for the shopper experience and checkout in place, rewards can help make the app stickier for consumers. The opportunity to earn cash, redeem it and even check a rewards balance are all reasons to keep returning to the app, and make it a destination to shop.
Shopify has long been known as the infrastructure layer of commerce, as it provided the tools for brands to run and manage an online store under their own name. With the Shop app, it is aiming to make Shopify itself a destination for shopping. It remains a nascent effort, even as more brands have taken advantage of the new features to enhance storefronts.
This comes as marketplaces continue to rise across ecommerce, and giants like Amazon and Walmart experiment with tools that do more to boost discovery of new products.
Social media has long been the engine of discovery in ecommerce, especially in the direct-to-consumer realm that Shopify has owned. Users found products on Facebook or Instagram, then finished checkout on a brand's phase. With the push toward privacy making performance marketing more difficult and customer acquisition costs rising, the ecommerce platforms are attempting to take that power into their own hands. With advertising placed close to the point of sale through retail media and the ability to check out on the same page where a user sees a product, marketplaces and Shop are realizing new opportunities to attract, convert and deliver for users within one app. For Shop, the trick is to attract more shoppers to the app. Rewards like Shop Cash are a carrot to do just that.