Marketplace Briefing: How Shopify is pitching Shop as a ‘social app’ instead of a marketplace

Shop now supports a more dynamic home feed, where recommendations change in real time based on user engagement, including browsing, refreshing or adding items to cart. The goal is to blend content from brands users follow with suggestions based on their shopping behavior.

Shopify is also betting that shoppers want a more curated and social shopping experience. The new collections feature, for example, allows users to organize saved items into themed lists, share them with friends and collaboratively shop. It’s a feature that leans into behaviors more commonly seen on platforms like Pinterest.

But according to Arpan Podduturi, Shopify’s vp of product, these features are less about building a marketplace like Amazon or Walmart and more about crafting a social-first shopping experience.

“It feels more like a social app than it does a shopping experience,” Podduturi told Modern Retail in an exclusive interview. Rather than emphasizing price competition or search, Shop is increasingly being built around brand discovery, customized storefronts and merchant-owned relationships — what Shopify sees as key differentiators in an increasingly crowded commerce landscape.

Shopify’s efforts to bolster the Shop app seem to be gaining momentum: In May, during earnings, Shopify said the Shop app grew its native gross merchandise volume by more than 94% year-over-year — an acceleration from 84% growth in Q4.

Modern Retail spoke with Podduturi about why Shopify doesn’t view Shop as a traditional marketplace, how merchants benefit from its latest tools and why social discovery is the future of online shopping.

This interview has been edited for clarity and length.

Shop just introduced a handful of new features to the Shop app, from collaborative collections to responsive recommendations. What’s the big-picture goal with these updates?
“Shop started as a package tracking app. Over the last year, the share of sessions that have included shopping have massively grown — more than doubled — and so the behavior we’re seeing in the app is not just about tracking anymore. It’s much more about shopping. These social experiences are built to make that shopping experience go even further.

We hear all the time from buyers that they love shopping online and they love shopping across Shopify stores, but what they are looking for often gets lost. We’re really trying to use as many of the signals we can to build a really great discovery experience in our app.

We want Shop to be a more useful product. We want it to serve a ton of different use cases. We believe that the shopping experience and Shop can get way better with different ways to discover and find brands, whether that’s through social, personalization or other pathways that are more appropriate to the way you shop.”

What does that mean in practice? Are you trying to build a marketplace?
“We do not think of ourselves as a marketplace. A marketplace typically centralizes everything, owns the customer relationship and forces brands to compete on price. That’s not what we’re doing.

We’re more like a mall, where you come in and you have a branded storefront experience that’s totally immersive, where you can meet your customer. You can merchandise the way you want. You can customize your storefront. You can offer specific offers to buyers. 

One of the main differences between what we offer and what other large marketplaces offer is that merchants own the customer. They get the email address at the end, and they can build that customer experience from that first sale.”

You’ve also added collaborative collections, which allow users to save and share products with friends. Why focus on that kind of social behavior now?
“Social curation is a really important part of the Shop experience. We’re seeing more shoppers who want to organize their wish lists around intent or theme — like ‘gifts for dad’ or ‘things I want to buy this summer.’ Now they can share those lists with friends, shop together and even browse what others are saving.

We’re not trying to build a social network. But we do believe shopping is inherently social. People are always asking friends what to buy and what brands they’re loving. 

Collections are giving us a great signal, because you actually have buyers grouping products together around themes, which is really interesting. We can use that to drive better personalization recommendations going forward.”

From a merchant’s perspective, what are the biggest benefits of these changes?
“Shop really exists to help independent entrepreneurs find buyers, helping them compete against large social media platforms or marketplaces. For example, the new recommendation system helps merchants get discovered by showing complementary products and introducing shoppers to brands they might not know about. We’ve also rolled out better product swatches — things like colors and shades that match how products display on their own stores — which makes the shopping experience feel more polished and personalized.

We’re also continuing to build more commerce utilities inside Shop, like returns and subscriptions.” 

How are you measuring success here? What signals are you watching?
“We’re looking at overall gross merchandise volume in Shop. We’ve been growing very, very quickly over the last couple of years, and we are hoping to accelerate our growth forward.

We are also looking at our retention rates, so bringing in shoppers and seeing how they retain over time. And we’re making sure we’re creating a really sticky product that people come back to, and that they come back to it not just for tracking, but for shopping, as well.”

What I’m reading

• Amazon is issuing refunds to customers for return issues dating back as far as 2018, attributing a recent $1.1 billion charge partly to these historical return costs, per Bloomberg.
• TikTok has initiated layoffs within its U.S. e-commerce division, particularly affecting operations and global key accounts teams, according to Business Insider.
• The Information reported that amid escalating U.S. tariffs on Chinese imports, Amazon is limiting warehouse inventory for certain merchants, mirroring its pandemic-era strategies to manage supply chain disruptions and mitigate financial risks.

What we’ve covered

• Amazon is ‘working directly with Nike to source their products,’ according to an email to sellers
• Brands are doing ‘tariff math’ after US-China truce, rolling back surcharges and adjusting prices
• ‘It’s just musical chairs’: Brands are moving manufacturing out of China — but not back to the U.S.