Retailers   //   June 22, 2022

Shopify’s latest product updates focus on helping merchants sell more offline

As more people resume in-store shopping, Shopify has built new infrastructure to help its merchants connect with more people offline.

For the last six months, the Canadian tech company has been testing new product features including Tap to Pay on iPhone and local inventory sync with search giant Google to make it easier for merchants to test offline retail. Right now, Tap to Pay on iPhone — which the company is launching in partnership with Stripe — is in early access mode with select Shopify merchants. It will be completely accessible across the U.S. in the coming months, the company said.

Shopify unveiled the features as part of what it is calling Shopify Editions — a collection of all the product updates it has made during the past six months, which it plans to update twice annually. In addition to its new physical retail features, the company also highlighted new social commerce and wholesale integrations. The new features come as Shopify is reporting a slowdown in revenue growth and gross merchandise value, as fewer people are shopping online compared to the height of the pandemic. During its most recent earnings report, Shopify reported 22% year-over-year revenue growth, compared to 110% the year prior.

Shopping in stores is back

These new programs come as e-commerce sales begin to slow down. In April, total retail sales climbed more than 7.2% year-over-year and more than 15.3 % compared to 2019 levels, according to Mastercard SpendingPulse, which measures in-store and online retail sales across all means of payment.

In-store sales were up more than 10%, while e-commerce sales fell 1.8% compared to last year, the data showed.

As such, many of Shopify’s announcements were focused on physical retail programs — services the platform has been building out for some time. Over the years, as more of Shopify’s merchants — like Allbirds and Rothy’s — have opened their own stores, Shopify has released more features to help them grow their store sales, like its point of sale system, which it first released in 2013 and has continuously updated over the years.

Now, it’s also introducing Tap to Pay, allowing Shopify merchants to more easily accept payments — using just an iPhone and Shopify’s point of sale app. “We’ve got some really good feedback on Tap to Pay. The overwhelming sentiment there is that it feels like magic. It feels really easy, it just works,” said Arpan Podduturi, director of product at Shopify.

“We think over time this has the opportunity to be disruptive across a number of categories. It will be used by merchants who sell at fairs and markets,” added Podduturi. “But we also believe it will be used by merchants who have retail stores who just want a seamless mobile checkout experience, who want that Apple Store experience in their own stores.”

In February, Apple said it plans to introduce Tap to Pay for merchants that use only an iPhone. That is, instead of requiring sellers to buy hardware to accept digital payments, the tech giant said Apple Pay and other contactless payments would be made available to U.S. merchants that use their Apple smartphone.

“It’s a neat way to accept payments and encourage more adoption of Tap to Pay, but most merchants will probably still want some hardware device to process credit cards if a customer doesn’t have a Tap to Pay feature setup on their device,” said Mark William Lewis, founder and chief technology officer e-commerce development and design firm Netalico.

Shopify also aims to reduce friction between nearby shoppers and merchants by launching local inventory sync with search giant Google. With local inventory sync, Shopify merchants can more easily let shoppers know what products are available in which stores.

“When a buyer searches for hipster jeans in Williamsburg, they won’t have to order it online, they’ll know two minutes away, there is a store that has the very size available for pickup,” said Kaz Nejatian, vice president, merchant services at Shopify.

“Google’s local inventory will be useful to Shopify merchants using their POS system. Other solutions like Square have been more popular for brick and mortar companies, but I think Shopify is really trying to make inroads into local shopping,” added Lewis from Netalico.

In an interview with Modern Retail, Podduturi emphasized that Shopify’s contactless payment feature is geared toward local commerce.

“Physical retail is fundamentally a local enterprise and everything we do is about connecting local buyers with local merchants,” Podduturi said.

Helping Shopify merchants sell through more channels

Among the many announcements, Shopify also announced a new wholesale feature and a new social commerce integration with Twitter.

Glen Coates, vice president, product at Shopify said wholesale represents a massive opportunity for merchants to grow their business.

Shopify’s new wholesale feature will make it easy for Shopify Plus merchants to manage their wholesale and their consumer businesses on a single platform. “This is a huge sales channel for our merchants and the wholesale offering just makes that flywheel spin faster,” said Podduturi.

Shopify’s wholesale channel has needed revamping for years, said Lewis. “It’s been a Shopify Plus only feature, but was really just an app (formerly know as Handshake) that they acquired and then stopped making updates to,” Lewis said. Shopify acquired Handshake in 2019 for an undisclosed amount. “So the features of it have been so limited most merchants don’t use it as a viable wholesale option.”

The company also announced new programs to facilitate Twitter shopping as it identifies social commerce as one of the most important and impactful ways that merchants find new buyers. The company has launched Twitter Shops and Shop Spotlight, two new sales channels that are both free for any Shopify U.S. merchants.

Twitter Shops will be a digital storefront on Twitter through which merchants can showcase up to 50 products, while the Spotlight feature will focus on five products that brands wish to draw attention to, Shopify said.

In the first quarter of this year, Shopify said, it saw orders placed with Shopify merchants via product integrations from Facebook, Instagram, Tiktok and Pinterest quadruple year-over-year.

“Twitter shopping would also be like a modern bazaar for our merchants, a place where they can find new buyers and make connections,” added Nejatian. Shopify said it will explore formats like product drops to limited inventory built around events on Twitter.

The tying bind between Shopify’s various growth efforts — creating new offline features for merchants, integrating with platforms like Twitter — is all about giving merchants more places to sell their products. 

“What we hope merchants and the world sees a year from now is we’ve built some really valuable global commerce infrastructure. And no one else is connecting these pieces or building these pipes the way that we are,” said Podduturi.