Shopify Powers Your Favorite Brands
The Canadian e-commerce company is helping brands build their online empire. Here's why you should care.
What is Shopify?
Shopify is the leading e-commerce platform behind many of consumers' favorite brands, such as Vuori, Gym Shark, Kylie Cosmetics, Sephora, Feastables, and Allbirds. With its user-friendly interface and comprehensive suite of features, it’s easy to see why Shopify has become the website host of choice for businesses of all sizes looking to build their online brand. The company has seen outstanding growth in recent years, with no sign of slowing down as more businesses turn to Shopify to capitalize on the rapid growth of e-commerce.
Shopify generates revenue by offering its businesses a range of e-commerce services, including.
Subscription Fees: Ranging from basic plans for small businesses to more advanced plans for large enterprises. With the rapid annual increase in e-commerce sales, Shopify brands will see massive growth requiring the most sophisticated subscription plan, Shopify Plus, starting at around $2,000 per month, including advanced functionality and customization options.
Transactions Fees: Shopify charges a transaction fee for each sale made through its platform, which varies depending on the payment method used by the business.
App Store: Features a range of tools and plugins that businesses love and use to enhance their online stores developed by third-party developers. Shopify receives a cut of the revenue generated by these apps.
Shopify’s app store is one of the primary reasons businesses love the platform. Some of the most popular apps include:
Oberlo: Designed for dropshipping that allows businesses to seamlessly import products from AliExpress and other sources, selling them directly through their Shopify stores.
Klaviyo: An email marketing app that helps businesses to create and send targeted email variations to their customers. Shopify recently made a $100 million strategic investment in the company.
Loox: A photo reviews app that helps businesses to showcase customer-generated photos of their products on their Shopify store
Shopify Benefits from Social Commerce
The widespread adoption of social media platforms has significantly increased social commerce. Instead of searching for products on marketplaces like Amazon or Walmart, e-commerce traffic is driven by viral social media posts directly linked to the product website. This trend has created new opportunities for businesses to learn more about their customers through collecting valuable data on their Shopify-powered websites that would otherwise be held hostage by third-party marketplaces like Amazon. Shopify has strategic partnerships with YouTube, Meta, and Tiktok to integrate its e-commerce services into their platforms seamlessly.
The heart and soul driving the growth of social commerce is the increasing use of influencer brands and marketing. Shopify provides businesses with the tools and resources to engage with influencers effectively. This helps businesses reach new customers, build brand awareness, and generate sales.
Enhancing E-commerce with Augmented Reality
Shopify is always trying to enhance the online shopping experience for customers and create tools that maximize sales for businesses. The recently developed AR Kit makes it easy for businesses to add AR functionality to their online stores. In addition, Shopify has partnered with AR app developers to create augmented reality apps available in its app store. The apps offer businesses a range of AR features, from product visualization and try-on features to product customization and demonstrations.
Shopify understands that enabling businesses with excellent AR tools will generate even more revenue for companies, benefiting Shopify. It’s part of a broader effort to provide customers with an immersive and engaging shopping experience. Shopify is driving innovation in e-commerce by helping businesses connect with customers in new and exciting ways.
Non-Fungible Token-Gated Shopping
Token-gated commerce is a new type of e-commerce infrastructure that is based on the use of blockchain technology. Customers must verify they hold a non-fungible token in their digital wallets to gain access to exclusive content, discounts, and rewards. Token-gated commerce can incentivize customers to participate in the business's online ecosystem, creating a more engaged and loyal customer base.
Several e-commerce brands have tried creating a gated website experience, but the website can’t be secure, transparent, and run smoothly without blockchain technology. More importantly, tokens can track customer behavior and preferences while protecting customer data and processing transactions securely. Some of the key benefits token-gated commerce provides to customers’ data include ownership and privacy:
Data ownership: Customers own their data preventing businesses from collecting and using customer data in ways that go against the customers best interest (ex: selling data to a third-party data broker)
Data Privacy: Transactions are recorded on the blockchain, which is inherently resistant to fraud and hacking.
Building the Shopify Ecosystem
The new Shopify “Shop” app is an essential tool for Shopify’s business as it provides a cohesive and Amazon-esque platform for customers to access and shop from their favorite stores. It’s designed to provide an excellent shopping experience and increase customer loyalty, engagement, and brand exposure. This is part of Shopify’s broader plan to transact all business in-house without relying on third-party marketplaces that businesses typically dislike because they lack Shopify's tools.
Shopify has invested $1 billion into building its own fulfillment network designed to offer merchants a more efficient, cost-effective, and reliable way to fulfill their orders. Shopify merchants can store their products in a network of fulfillment centers across the United States and have orders shipped directly to customers, similar to Amazon FBA (Fulfillment by Amazon).
The Shopify Fulfillment Network can help businesses to reduce shipping costs and provide faster delivery times for customers. This is the final piece of the Shopify ecosystem that gives its merchants a complete e-commerce solution to help their businesses reach more customers.
Road to a Trillion Dollars
Shopify’s efforts to expand its social commerce initiatives, develop web3 tools, and create a robust retail ecosystem demonstrate its commitment to innovation in the rapidly evolving e-commerce landscape. These initiatives provide added value to businesses using the platform and create a more seamless and engaging shopping experience for customers. Shopify has put itself in a strong position to succeed in the decades to come and remain a dominant force in the e-commerce industry.