Lately, the rise of ecommerce and how brands sell their products and services is a story told with Shopify as a central character. Shopify, which describes itself as “one platform with all the ecommerce and point of sale features you need to start, run and grow your business,” has had a meteoric rise, with revenues of more than $1.5 billion and more than a million merchants on the platform as of last fall. Shopify recently reported that, “in the last year, 218 million people have purchased something from a store built on Shopify.”
As ecommerce solutions, including subscriptions, storefronts within social media platforms and point-of-sale (POS) options that allow brands to transition seamlessly from brick and mortar to online, surge in usage, services like Shopify are bound to become increasingly necessary for consumers and digital marketers.
Shopify Offers Brands A Way To Reach Consumers
During the last six months, when countless businesses were forced to move online, Shopify became an essential service for many mom-and-pop shops. According to a recent Forbes article about Shopify’s growth, “New stores created on Shopify’s platform surged 62% during the lockdowns. And the most shocking stat of all: Stores with a presence on Shopify recouped 94% of lost in-person sales with online orders.” And, “20% of small businesses sold an item online for the first time ever during lockdown.” Here are four facts about how and why Shopify has grown so precipitously.
1. The Founders Of Shopify Built The Business They Wanted To Use
After trying other ecommerce platforms for their online snowboarding shop, Shopify founders Tobias Lütke, Daniel Weinand and Scott Lakewere were so disappointed by the functionality available for online shops and storefronts that they launched Shopify. By understanding what didn’t work within existing ecommerce platforms, the Shopify founders were able to create a platform that did work, with features that benefitted merchants and Shopify. Shopify’s services allow brands to customize their online stores and sell their wares across the internet, going beyond a simple, static storefront.
2. Shopify Transitioned To Tiered Subscriptions And Use Took Off
In 2007, Shopify transitioned to a robust and multifaceted tiered subscription service, and that business model is what helped Shopify begin to scale business and revenue in a meaningful way. Retailers that want to use Shopify to build their online store can choose from three tiers of services for small to medium businesses that are starting off or looking to grow. Additional monthly plans exist for the other ends of the spectrum — large, high-volume businesses and small blogs that want a checkout option.
Recently, the merchant solutions that Shopify offers, like payment tools, hardware and shipping and financing services, have overtaken Shopify’s subscription solutions as revenue generators and are growing at faster paces for the business, although subscriptions remain a core part of their business.
3. Shopify’s Seamless And Varied Methods Of Payment Offer The Frictionless Sales Consumers Want From Brands
Shopify has multiple ways that brands can set up payment options, including Shopify payments, which is entirely inside the Shopify ecosystem and accepts most forms of payment. A brand can also choose third-party credit card payments or seamless options like Amazon and Paypal. Shop Pay, introduced by Shopify in 2017, is the most frictionless, “accelerated” payment method for shoppers purchasing from brands on the Shopify platform. As a result, Shop Pay has been used by 40 million consumers worldwide since launching. Shopify recently announced that they will be offering a buy now pay later option, which could benefit brands selling big-ticket items during shaky economic times.
4. Shopify’s App Downloads Are A Growing Sector Of Their Business
Shopify’s point-of-sale (POS) app, according to Shopify, allows vendors to run sales transactions “in a physical store or pop-up setting. Find products, process orders, take payment, swipe credit cards, produce receipts, and control it all from your iPad or mobile device.” POS transactions are a critical part of how Shopify makes it possible for brands to create relationships with consumers offline, which can be especially important for small businesses.
Recently, Shopify launched Shop, which allows consumers to track packages from brands and merchants and also “browse a feed of recommended products, learn more about each brand and make purchases using the one-click Shop Pay checkout process,” according to TechCrunch. Shop is already being used by 16 million consumers.
Ecommerce Is Here, And Brands That Adapt Can Thrive
According to Forbes, “internet shopping has grown more in the past 12 weeks [since March] than it did during the last decade.” And, it’s likely that many businesses that have successfully moved their businesses online will continue to optimize their online presences even beyond the end of quarantines. Ecommerce platforms like Shopify can offer brands the tools they need to capture new consumers and build lasting growth for newly online businesses.
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