Retail Channels

A look at how DTC is evolving, through 10 Shopify product releases​

Shopify has new tools for B2B sales, Twitter and in-person payments.

Shopify Editions apps

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 commerce

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.

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