Shopify Inc. expects a banner holiday season as the worsening pandemic encourages more consumers to shop online and buy from the small businesses that sell through its platform.<\/p>\n
While the pace of growth will likely slow once the pandemic ends, this year\u2019s gains will likely hold up, President Harley Finkelstein said in an interview. The company reported a 109% increase in gross merchandise volume, a key metric for online retailer companies, in the third quarter.<\/p>\n
\u201cThis is not going to go back to the way it was pre-Covid. This has been a paradigm shift,\u201d he said. \u201cI don\u2019t think it\u2019s fleeting.\u201d<\/p>\n
With Black Friday still a week away, it\u2019s already clear the next two months will be \u201creally good,\u201d Finkelstein said. The number of orders merchants received rose 17% in the second week of November compared with the first week. The average consumer cart of merchandise sold in the second week of November was $81, an 18% increase over last year, he said.<\/p>\n
Large retailers have been among the biggest beneficiaries of the online shopping boom and will see the most growth in market share this season, according to a\u00a0report\u00a0by Adobe Analytics, though small retailers will experience the greater percentage revenue boost. While more large chains are turning to Shopify, the vast majority of Shopify\u2019s customers are businesses with 500 or fewer employees.<\/p>\n
Shopify is counting on consumers to choose independent brands for items that aren\u2019t staples. That \u201cconscious consumerism\u201d is getting a boost from the pandemic, Finkelstein said: \u201cDirect to consumer is not a fad.\u201d<\/p>\n
Almost 40% of shoppers will make a deliberate effort to shop at smaller retailers over the holiday season, according to the Adobe report.<\/p>\n
Shopify began in 2004 as a service provider to small companies, helping them build websites to sell to customers directly. As the e-commerce market has expanded, so has its line of tools and services. Today most of its merchants peddle their wares on multiple platforms. Since 2017, merchants have been able to\u00a0connect\u00a0to Amazon.com Inc.\u2019s marketplace through Shopify.<\/p>\n
The Ottawa-based company has also struck partnerships with major platforms including Facebook Inc., Instagram, EBay Inc. and TikTok Inc. In June, it announced a\u00a0deal\u00a0to get some Shopify merchants on Walmart Inc.\u2019s third-party marketplace.<\/p>\n
Shopify now views itself less as an e-commerce company than a \u201cretail operating system\u201d for merchants where they can manage multiple sales channels as well as marketing, data analytics, shipping, payments and capital needs, Finkelstein said.<\/p>\n
U.S. e-commerce sales are expected to soar almost 36% this holiday season, according to\u00a0eMarketer, almost perfectly offsetting losses in brick-and-mortar stores. But the smaller firms Shopify serves face unique hurdles because of the pandemic.<\/p>\n
\u201cThe biggest challenge is navigating the uncertainty,\u201d said Marcus Wilson, co-founder of\u00a0NOBULL, a footwear and training apparel company that uses Shopify. While NOBULL\u2019s sales are up 78% so far this year, matching inventory to that growth is difficult because products for this holiday season had to be ordered six months ahead of time, during a period of huge economic uncertainty.<\/p>\n
Shipping delays have also been a problem, said Charis Jones, founder of\u00a0Sassy Jones, a Shopify merchant that produces jewelry in India and China and imports it to the U.S. to sell. \u201cWe got bought out by other large companies on our cargo space hundreds of times, too many to count, and it was expensive — like four times more expensive to import,\u201d she said. \u201cWe just got bumped for our Black Friday stuff.\u201d Still, the company expects sales will grow threefold this year to at least $15 million.<\/p>\n
Shopify is in the process of creating a network of warehouses across the U.S. in order to match Amazon\u2019s price on two-day shipping, though it has no intention of competing on same-day service. \u201cWe don\u2019t have to do it in an hour or two. We think consumers can wait 48 hours to get a great product,\u201d Finkelstein said.<\/p>\n
With a string of earnings beats behind it and an about 150% rally in shares this year, the company is awash in\u00a0cash. It remains focused on growth and has no plans for dividends or share buybacks, Finkelstein said. Executives, including founder Tobi Lutke, don\u2019t see value in making deals just to add revenue or customers but would consider other acquisitions, including to acquire talent.<\/p>\n
\u201cBillions of dollars on the balance sheet gives us optionality. It means that we can invest in companies if we want, it means we can purchase other companies. It means we can finance our own capital program on our own for as long as we need to,\u201d Finkelstein said.<\/p>\n
Shopify Inc. expects a banner holiday season as the worsening pandemic encourages more consumers to shop online and buy from the small businesses that sell through its platform.<\/p>\n","protected":false},"author":341034,"featured_media":299984,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[55460],"tags":[7001,28376],"class_list":["post-376895","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-black-friday","tag-black-friday","tag-shopify"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/376895"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=376895"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/376895\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/299984"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=376895"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=376895"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=376895"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}