Shopify unveiled a suite of products on Wednesday as part of a release called Shopify Editions.
The new products reflect a renewed focus on in-person retail.
E-commerce growth has slowed after surging during the height of the pandemic.
Shopify unveiled a suite of tech products on Wednesday, many of which reflect a renewed focus on offline retail as e-commerce has slowed.
New features included the launch of “tap to pay” on iPhones in the US and local inventory search with Google. The company also announced “tokengated” commerce allowing merchants to use nonfungible tokens to offer their biggest fans access to exclusive perks and experiences.
The announcements were made as part of a semiannual release the company is calling Shopify Editions. In addition to the new products, the release highlighted more than 100 software updates and releases that Shopify made in the past six months.
Shopify’s launches come as e-commerce as a whole has fallen from its pandemic heights. By diving into new ways of blending online and offline retail, Shopify is attempting to remain relevant to its merchants’ needs as the market evolves.
“I think they kind of want to be all things to all people, and the only way to do that is to have a very compelling offline product and service offering,” Anthony Chukumba, a Loop Capital analyst, told Insider.
Shopify’s other announcements included additional support for business-to-business and wholesale commerce, as well as shopping features for Twitter users and a more flexible back end for developers.
Bridging the gap between online and physical retail
Shopify’s point-of-sale software will soon include support for Apple’s new tap-to-pay feature in the US, which allows Apple devices to serve as a contactless card reader without additional hardware. Kaz Nejatian, Shopify’s vice president of product for merchant services, said the functionality would allow smaller merchants to assess accepting payments in person without committing to purchasing hardware.
“This is a really big deal for merchants who want to test offline retail with things like pop-ups or people who are just getting started,” Nejatian said.
Point of sale is an area where the Canadian e-commerce company is not considered a category leader and faces more direct competition with players like Square and PayPal. The latest point-of-sale hardware Shopify released came in 2020, with a product that replaced one created in 2013.
Shopify is emphasizing its physical-retail capabilities.
Shopify
But analysts say that point of sale offers a big opportunity for Shopify to grow. Shopify generates most of its revenue from processing the payments made to purchase merchants’ products. Josh Beck, an equity-research analyst at KeyBanc Capital Markets, said many of the world’s merchants still used legacy checkout solutions not connected to cloud-based software.
“I think the bigger opportunity for them is to basically help new business formation and to help them have modern tools, help them have capabilities that would be similar to what enterprise would get you but at a much, much lower price point,” he told Insider.
Shopify is further seeking to bridge the gap between online and physical retail by allowing merchants to sync their store inventories with Google, allowing shoppers to search for items that are in stock at stores closest to them.
Responding to increased in-store demand has also been a priority for Google — at its Marketing Live conference in May, the tech giant said searches for “near me in stock” had risen more than 90% year over year. It has also launched other features like 3D and augmented-reality visualization and enhanced visual search tools to help shoppers blend in-store and online browsing.
“When shoppers returned to stores, they did so without decreasing their digital usage,” Bill Ready, Google’s president of commerce, payments, and next billion users, said. “When shoppers decide to go into the store, their search doesn’t stop at the door — it continues. The digital habits from the past two years are continuing.”
‘Blockchains are going to win on a scale that is actually hard to imagine’
Shopify also announced the launch of what it calls “tokengated commerce,” doubling down on its earlier investment in NFTs and other Web3 capabilities. NFT holders will be able to connect their crypto wallets to a Shopify merchant’s store and unlock exclusive perks from merchants, like early access to new products and exclusive collections.
Shopify experimented with tokengated commerce at South by Southwest in March, when its tech powered an immersive in-person pop-up with the NFT shop Doodles.
Tokengating will also seek to bring Web3 offline through the new point of sale’s capabilities.
“You can imagine a world in which you can go to a store that has Shopify’s all-new point of sale, and an NFT will unlock a room that’s not available to the public, and I think that’s just going to be kind of a weird and gnarly experience,” Nejatian said.
With tokengating, Shopify continues its foray into the world of NFTs. In July, it announced users would be able to buy NFTs directly through Shopify storefronts with debit or credit cards.
Other retail-tech companies have similarly launched ways to use NFTs to build customer loyalty.
Try Your Best, the latest venture of the Outdoor Voices founder Ty Haney, allows retailers to use blockchain tech to reward their most loyal customers with NFTs, virtual coins, and discounts. Glow Labs, founded by two JPMorgan veterans, hopes to help Web3 companies develop customer loyalty and rewards programs and is backed by the likes of Forerunner Ventures and Harlem Capital.
Shopify’s product heads appeared bullish about the potential for Web3 technologies — especially when it comes to commerce — despite the crypto market’s recent downturn.
“At their core, blockchains are a new kind of computing abstraction for representing relationships between people. And this matters a lot because the whole world is built on relationships between people,” Nejatian said. “If these abstractions are actually a better way to represent these relationships, then blockchains are going to win on a scale that is actually hard to imagine.”
Beck said Shopify’s enthusiasm for Web3 fit well with the company’s recent history.
“They’ve always been early to embrace emerging channels or emerging modes of commerce,” Beck said, pointing to Shopify’s summer 2021 entrance into TikTok as a
social-commerce
channel.
‘The north star has always been to help the merchant be successful’
The e-commerce landscape has undoubtedly changed in the first half of this year. Many companies expected the pandemic-induced shift to e-commerce to stick, but shoppers have returned to stores in droves so far in 2022. E-commerce stocks have fallen dramatically from their pandemic heights, including Shopify’s.
Shopify isn’t the only e-commerce company to bet on brick-and-mortar retail as pandemic habits have shifted. Many digitally native brands are exploring wholesale retail partnerships as the direct-to-consumer model fails to generate profits.
Analysts say Shopify will ultimately do whatever will be helpful to its merchants.
“For them, the north star has always been to help the merchant be successful,” Beck said. “In this environment that we’re in, that’s the combination of digital channels, like online and social, and the in-person element of it.”
Glen Coates, the vice president of product for Shopify’s core platform, echoed that sentiment.
“The thing that we’re trying to do here is allow merchants to say yes to that opportunity,” Coates said. “And it’s one click in the software that they already use.”
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