Shopify is adding new features to its platform and opening a permanent physical retail location, as it looks to jumpstart growth by appealing to existing and new users.
The Ottawa-based e-commerce company, which says it will hit $1 billion in revenue this year, made the announcement during a keynote address from CEO Tobias Lütke at its third-annual Unite conference, held in Canada for the first time.
The changes to Shopify’s platform include stronger personalization services and expansion into physical spaces.
“We fundamentally believe that any situation is improved if there are more voices,” Tobias Lütke said in an exclusive interview prior to the conference. “We have become confident in … innovating (not) because of competitive pressure but based on how we think it all should work.”
The company released its latest quarterly earnings last week that beat analysts’ expectations for profit, but showed slower growth in both subscribers and the total amount of goods sold. Gross merchandise volume (GMV), a widely watched figure for the e-commerce industry, rose 64 per cent to $8 billion. Last year, GMV rose 81 per cent.
To attract more subscribers, Shopify will open a physical store — location to be announced — called Shopify Space, which will sell the company’s products (such as its point-of-sale systems), host workshops and one-on-one training in entrepreneurship or technology, plus hold community events.
“Shopify is making a huge investment in growing physical retail,” Satish Kanwar, the company’s vice-president and general manager of channels, said. “While we started as an e-commerce company, we plan to be the Shopify of retail, too.”
The company also announced a new Tap & Chip Reader accessory, which will be released this fall in the U.S. and will allow merchants to accept contactless payment in stores. The company’s point-of-sale system is also getting new features, such as in-store pickup and multi-channel returns.
“We want online stores to be successful in retail stores and we want more retail stores be able to grow online, and that really requires Shopify to also expand and support the way we do business to help these kind of merchants in our community,” Kanwar said.
E-commerce is still Shopify’s bread and butter, however, so the software announcements for its platform of roughly 600,000 merchants outnumbered the physical.
The company announced new tools in its dashboard for measuring marketing activities, as well as personalized recommendations for products and stores. It has also developed a services marketplace to connect merchants with other partners (such as for website design assistance or photography), BOGO and quantity discount support, plus a redesigned Shopify App Store that better curates add-ons through humans and algorithms.
“We launched (the app store) in 2012 and it has been hugely successful. In 2017 there were five million searches,” Atlee Clark, director of Shopify’s app and partner program said, adding that there are thousands of apps available in the store.
“Everybody’s business is different and we think that there are lots of solutions, but there are solutions that are the best for that person at that time and we want to surface that in a more intelligent way.”
The fact that Unite is being held in Canada — previously, it was in San Francisco — highlights the growing interest in technology domestically. Shopify employs nearly 3,000 people in this country, and offers its office space for community events and coding workshops.
“Most multinational companies are not Canadian … we realize that as a strength,” Lütke said. “So we said, ‘Why don’t we increase as a global company based on Canadian values such as strength through diversity and collective pursuit?’ ”
Though Tuesday’s keynote is the highlight of the week, the conference is also meant to facilitate the sharing of ideas among partners as well as workshops and panels, the company said.
“The magic of this event is that all the time, in-between, everyone gets together just to talk about commerce,” said Clark, who co-founded the conference in 2016.
“There’s this buzz that happens between partners who meet people from Shopify and then also meet each other. The number of partnerships among partners that come out of Unite is amazing.”
Special to the Financial Post