Shopify Ups Its Email Marketing Game

This is the latest in our series on SMB website builders. See the whole series here

The SMB presence and promotion bundle continues to grow. Aligned with our ongoing coverage of feature expansion among website builders, Shopify is the latest to fortify its suite with email marketing. Shopify isn’t a website builder per se, but the theme of feature expansion remains (more on that in a bit).

First, what’s the latest addition to its bundle? This week it launched Shopify Email, which the company labels as “the first email product designed for eCommerce.” Given that Shopify enables small businesses with advanced e-commerce functionality, the email addition is purpose-built for that persona.

As further background for those unfamiliar, Shopify’s jam is SMB eCommerce functionality. That includes lowering barriers to transactional, logistical and order management functions for SMBs that sell physical goods online. The company has been an exemplar of SMB SaaS democratization.

Email marketing is a logical addition to this core product because of its ability to boost key metrics like customer loyalty and lifetime value. Given existing customer management (essentially CRM) components of its software, it has the ability to detect trends and insights that translate to follow-on email marketing.

For example, it can generate customer segments that are based on affinity groups or past purchases. That’s not new when it comes to email marketing platforms, but the ability to automate list creation based on past purchases is a differentiator that’s only possible through its direct eCommerce integration.

This also ties to the analytics that let Shopify merchants see if and how those emails led to any conversions. This includes standard email marketing analytics such as open rates and clicks. But given the integration to Shopify’s core product, it can also track when items are added to a cart, or purchased.

As an additional time-saving tool, Shopify email integrates with merchants’ Shopify stores.  That lets them easily pull in brand assets, product images or other collateral that make email campaigns easier to construct. This is a key factor given SMBs’ signature time constraints and varying technical ability.

Lifetime Value

Back to the theme of feature expansion, this logical integration aligns with a macro trend we continue to track: the rapid expansion of SMB SaaS bundles. Among other market events, this follows Constant Contact’s move into websites (sort of the reverse of Shopify’s move), and GoDaddy’s new marketing suite.

The thought is that a larger bundle boosts revenue per user, retention and thus lifetime value. The latter is all about having more tentacles that reach into business operations, thus anchoring a given vendor in SMB operational support. That in turn creates a sort of lock-in effect and greater SMB switching cost.

Beyond yield optimization, an expanding bundle is compelled by naturally dovetailing products. For example, Shopify’s ability to tap into the eCommerce back end lets it automatically segment email lists and messaging as outlined above — something that other email marketing tools can’t do as natively.

This move towards a bundle is also supported by LSA’s Modern Commerce Monitor (MCM). Fielded by Thrive Analytics, the survey indicates that SMBs increasingly prefer “one-stop-shop” providers for various operational needs. That’s everything from presence to marketing to back-office functions.

But notably, there’s a disparity between SMBs’ behavior and their aspirational sentiments in the MCM survey. Specifically, 38 percent of SMBs use 1-2 services, but 79 percent prefer to work with a single source for everything (see above). This gap signals an opportunity for vendors who can fill it.

As for Shopify Email’s rollout, it’s available now as an early access test for a limited group of selected merchants. The broader launch will happen in early 2020 at which point it will announce pricing.  Shopify email follows the recent platform expansions into retail POS hardware and digital ad tools.

Expect more bundling and feature expansion from Shopify and others that target SMBs. We’ll report back as we see that unfold across the SMB SaaS landscape.

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