How product updates like faster checkout ramp up Shopify’s enterprise growth strategy
Shopify made a name for itself by powering the online stores of independent direct-to-consumer brands. Now, the Canadian e-commerce company is continuing its push to recruit bigger retailers, with a slew of more than 150 product updates aimed at making the platform easier to use and more omnichannel for enterprise clients.
Shopify’s latest product updates are designed to scale with businesses of any size or complexity. But Shopify’s vp of product Carl Rivera spoke with Modern Retail about what these updates mean for enterprise retailers in particular. Shopify hopes the updates will show that the platform can handle even the most large and complex business models.
“This release isn’t about introducing a bunch of shiny new things, but rather about optimizing what we already have,” Rivera said in an interview. “It’s less flashy but incredibly important because it’s all about making Shopify more efficient and seamless.”
Shopify has made several updates to the checkout experience. For example, checkout load speeds are now 50% faster, which the company says can drive sales. Another update integrates chat apps into checkout, giving customers additional support. For B-to-B businesses, Shopify has introduced extensions to customer accounts to help larger clients manage contracts, special rates and product previews more efficiently.
Some of Shopify’s newest updates are focused on POS and in-store sales, a key focus for larger retailers. For example, brands can now sell bundles through Shopify POS. Additionally, retailers can now process returns without a receipt. And retailers can accept in-person card payments even if their network is down.
Offline sales have been a growing area for Shopify, particularly as it relates to enterprise brands. For example, POS sales made by Shopify merchants in the U.S. have grown by 27% since Black Friday and Cyber Monday weekend last year. Shopify said that women’s apparel retailer Laura started using Shopify’s POS in more than 130 stores in the third quarter. Offline GMV was up 27% in the third quarter from last year.
Onboarding bigger companies has been a big focus for Shopify since early 2023. There are plenty of signs that Shopify’s efforts are now starting to bear fruit.
Shopify added 16 enterprise customers in the third quarter, including FashionPhile, Reebok, and Lionsgate Entertainment, Rivera told Modern Retail. Shopify doesn’t break out its enterprise earnings, but Shopify reported a 26% jump in revenues during the third quarter. Net income doubled from $173 million to $344 million compared to the year-ago period.
Modern Retail spoke with Rivera about Shopify’s latest updates, its overall enterprise growth strategy and what’s next in the pipeline.
This conversation has been edited and condensed for length and clarity.
Shopify’s latest updates seem like they’re focused on flexibility and ease-of-use. Why is that helpful for large, complex merchants?
When you reach enterprise scale, everything becomes more complicated. There are higher volumes, more complex workflows. When you’re an enterprise client, you need a system that’s really resilient when all of the other systems go down. That’s why we’ve rolled out features like unverified returns, which lets a customer return an item even if the system can’t find the original order. This is crucial for larger merchants, where customers might shop in multiple channels and return items from a different source.
That’s also why we’re introducing things like the ability to create customer segments based on geographic location, allowing retailers to create hyper-targeted marketing campaigns. This is critical as businesses try to unify their customer data across multiple touchpoints.
Shopify has been focused on recruiting more enterprise merchants for quite some time. For example, Shopify released its enterprise-focused product stack called Commerce Components a couple of years ago. What has Shopify learned about what enterprise retailers want, and how has that influenced Shopify’s enterprise growth strategy?
What sets Shopify apart is our approach to building the platform. In the past, enterprise platforms were built with rigid systems — like a house built on cement. It will do the job, but then when the needs change, it’s really hard to change because it’s built out of cement.
At Shopify, we build our platform much more like Lego blocks. We have all these building blocks that we take, whether it’s customer accounts, payments or extensions. And this allows us to reconfigure our building blocks in a much more flexible way than any of our competitors.
Why is it important for Shopify to onboard more enterprise brands, especially given your roots in serving smaller DTC businesses?
The important thing for us is that in building for larger merchants, we’re not alienating the medium-sized businesses and the small-sized businesses. Our job is to build constructs that can stretch and be combined in different ways to fit different stages of business maturity. Enterprise is kind of like the final frontier of, “Wow, our system has become so composable and so flexible that it now even works for the merchants that have the most complex businesses.” It’s the natural progression for us of having a larger set of Lego bricks.
Offline sales have become an important part of Shopify’s offerings. Why is brick-and-mortar retail a key growth area for Shopify, and how does this connect to attracting enterprise merchants?
Shopify is an OS for commerce, and it powers a true omnichannel strategy. Online store is one channel, retail is another channel, B-to-B is another channel. More of these merchants… can’t be pegged to one segment or the other. They want to be in all of them. Shopify has a unique strength when it comes to this set of problems and this category of merchants in that I think we’re the only platform where all of these systems and integrate this seamlessly.
Shopify today is about just over 10% of U.S. commerce, but if you think about commerce in the U.S., most of it still is brick-and-mortar. Most of it isn’t online. Shopify pushing into these areas is like meeting the market where it is and giving our merchants the right touchpoints to unlock that potential.
What’s next for Shopify? What future developments are you most excited about?
The quest for further unification never ends. I think what’s going to happen over the next couple of years is that Shopify will strengthen its offering. It will go deeper in all of the areas we’re currently in. Our B-to-B offering will become even more professional. Our online offering will become even better. Our products in financial services and advertising will become even better.
And then what will happen is that they will integrate better together such that you get more and more scaled advantages of using them as one suite as part of one OS, and then they will become available to larger merchants across more markets.