Shopify in 2021: Staying at the top of the online retail game
It’s been a while since the world shifted its shopping habits from offline to online modes. Smart retailers had realized the need to deliver a purchasing experience that was independent of the consumer's location. And online retail stores solved that need.
The growth of online retail is nothing short of a fairy tale. Back in 2014, total retail eCommerce sales worldwide reached $1336 billion in value, and it is projected to hit $6388 billion by 2024 at a staggering CAGR of 16.93 percent!
And when you dig deeper into this stellar growth of online retail, you will find commerce platforms like Shopify at its epicenter. Shopify enables businesses to create a full-scale online store using its site creation, hosting, and payment solutions. Although it started with humble beginnings back in 2006, it’s since become an industry leader and a name synonymous with eCommerce.
Today, almost fifteen years since it was founded, Shopify powers more than 1,750,000 businesses in 175 countries. So how does a platform like Shopify stay relevant and continue to sit at the top even after so many years? Let’s find out.
Offering a robust infrastructure for small businesses
Investing in digital innovation and transformation can be an expensive proposition for most small businesses. But without them, these businesses can perish in the deep red ocean.
Shopify offers these SMBs the ability to set up their online stores as well as place advertisements, process payments, fulfill orders, and manage inventory, all for a nominal fee and that too with minimal efforts.
This is much less expensive and consumes very little time than hiring a software developer to build their own online store. And it is a more profitable alternative to Amazon, which takes the lion’s share of every sale in the form of commission.
Most Shopify merchants aren’t your quintessential techpreneurs who can dedicate their time to working with multiple tools and solutions to connect different workflows across their store. One of the pillars of Shopify's success is its ability to provide a comprehensive toolkit of low-code/no-code solutions such as Shopify Pay, Shopify Hosted, and Shopify Gift Cards to tailor the store according to a retailer’s needs.
In summary, Shopify offers a strong infrastructure that helps small entrepreneurs easily create, operate, and scale their business operations.
It is an ecosystem for everyone to thrive
The core of Shopify’s unique ecosystem is its developers and partner networks. Shopify allows third-party developers to build apps that extend their native functionality. This encourages freelancers, designers, and small agencies to become 'Shopify Experts' who can guide and assist merchants in creating and managing their online storefronts.
Each stage of a merchant’s entrepreneurial journey is a lucrative opportunity for these Shopify Experts to build solutions to diverse problems -- from sourcing products, marketing, order fulfilment, customer management, and more.
In 2009, Shopify's app store was born, and this resulted in the creation of several unique applications that retailers could plug into their Shopify website as add-ons. There are plenty of apps in the marketplace which hundreds of thousands of store owners use. This tight integration and easy availability of a comprehensive ecosystem increases the stickiness of the platform.
Today, you can find over 6,000 apps available to the public across the Shopify App Store. An average Shopify merchant uses around six apps to run their store.
A study shows that in 2020, more than 450 million people shopped in Shopify stores. This is roughly $120 billion in gross merchandise volume. Shopify has also claimed that its partners earned a whopping $12.5 billion in 2020. This is 4x the revenue of Shopify’s own platform.
"There are a lot of verticals that help along the merchant journey -- marketing, customer service, shipping, and fulfillment. Each one is a billion-dollar industry on its own". says Fatima Yusuf, Shopify’s director of ecosystem partnerships.
With its Square-like POS system, Amazon-like online stores, Google-like SEO services, and finally, with its newly launched DHL-like logistics network, Shopify has disrupted almost every domain in the retail industry.
Creating New Experiences For All Audiences
A study by Gen.video and Geometry Global states that more than 90 percent of social media users are persuaded to make a purchase after seeing social media content about the products or brand. Out of this, 33 percent of users state that influencers had a role to play in their shopping decisions.
More and more Shopify merchants are relying on social media platforms to build their businesses. The recent TikTok and Shopify alliance is a classic example. It poses a unique opportunity for Shopify’s 1.75 million merchants to reach TikTok’s millennial and Gen-Z audience.
Shopify merchants were empowered to create, run and manage their TikTok marketing campaigns via their Shopify dashboard.
In this TikTok Shopping, users checkout via the Shopify app. All they have to do is click the product link within TikTok. The user will be taken to the merchant’s website, where they can make the purchase. Shopify takes care of the entire transaction and payment.
These innovations allow Shopify users to stay competitive and disruptive in their individual markets as new consumer behaviors continue to reshape the future of retail.
Conclusion
Tobias Lutke once said in a tweet, "Amazon is trying to build an empire. Shopify is trying to arm the rebels." Even today, Shopify keeps up with this philosophy. It is on a mission to build a more democratic eCommerce environment where even small and medium-sized businesses can thrive and create a unique space for themselves in a marketplace predominantly run by behemoths like Amazon and Walmart. And that’s the success story of Shopify!
Baskar Agneeswaran is currently the Chief Executive Officer at Vajro, a technology company dedicated to enhancing the mobile app experience for small to medium businesses. Leveraging his years of experience in AI- and software-driven solutions, Vajro is becoming one of the global leaders in live video commerce technology.