Among the many tools brought by the SMB SaaS era, Shopify is perhaps the best example of democratizing big-company capabilities for SMBs. In its case, the democratization play is limited to specific functions like eCommerce and shipping, but those are high-value core functions for a large subset of SMBs.
Now Shopify is adding to its arsenal with a consumer-facing app called Shop, which joins its otherwise SMB-facing software. Of course, Shopify has always “touched” consumers in e-commerce transactions, but it wasn’t consumer-facing per se. From the user perspective, Shopify sits in the background, mostly white labeled.
But the new app seeks to make it more of an explicit consumer brand. This plays out in a UX that essentially brings together all of the stores of the online merchants that it powers. This will include standard e-commerce features like personal recommendations, one-click checkout and package tracking.
Highly Motivated
In product launches like this, it’s always important to ask “why?” as tracing it back to company motivations can reveal trajectory. The first driver is likely a demand aggregation play. If it can aggregate and accelerate conversions for its SMB constituents, it can embolden the value they perceive and thus retention.
The second reason is critical mass. Now that Shopify has 1 million merchants, it has a varied mix of products and categories to comprise a holistic consumer shopping aggregator. Any eCommerce app with gaps in product inventory conversely isn’t going to last in a competitive shopping app landscape.
The third reason for the app’s launch is timing. Given global lockdowns, smart companies are doubling down on quarantine-conducive products. That includes everything from casual games to communications & videoconferencing to podcasting to eCommerce. The latter is obviously the play here.
Activation Energy
We’ll qualify all of the above that it’s speculative and based on our observations of several factors. We’ll be watching for each of these variables in the coming weeks, including whether or not Shopify can gain the consumer traction to justify the “activation energy” of downloading and using an unproven app.
On that note, Shop faces headwinds from a few vectors, including Amazon’s hegemony and consumer mindshare for all things e-commerce. There’s also a persistent challenge for any new consumer app: scarcity of home screen real estate. We wonder if a mobile web approach could serve it better via SEO.
Either way, if it can pull off a user-facing strategy, it will go a long way towards the first and primary goal above: to create a network effect and bring more demand and ultimately conversions to its e-commerce SMBs. Notably, this follows its move into email marketing, which triangulates a larger expansion play.
We’ll keep watching to see what’s next for Shopify, and how it continues to round out its value proposition for e-commerce-oriented SMBs. Previous coverage below.
