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Shopify is a leading provider of essential internet infrastructure for commerce; offering trusted tools to start, grow, market, and manage a retail business of any size.
Shopify’s mission is to improve commerce with a platform and services engineered for simplicity and reliability while delivering a better shopping experience for consumers everywhere.
In an era where social media, cloud computing, mobile devices, augmented reality, and data analytics are creating new possibilities for commerce, Shopify’s software provides one single integrated, easy-to-use back end that merchants use to manage their business.
Shopify enables merchants to display, manage, market, and sell their products across over a dozen different sales channels, including web and mobile storefronts, physical retail locations, pop-up shops, social media storefronts, native mobile apps, buy buttons, and marketplaces.
A rich ecosystem of app developers, theme designers, and other partners, such as digital and service professionals, marketers, photographers, and affiliates, has evolved around the Shopify platform.
What makes Shopify’s business model unique- check out its story
Business & Growth Strategy of Shopify
Heavy investments are the central pillar of Shopify’s growth strategy as it believes that investments will increase its revenue base, improve the retention of a global base of merchants and strengthen its ability to increase sales to its merchants.
The overall business and growth strategy of Shopify is driven by its mission of improving commerce for everyone. Vital elements of Shopify’s business and growth strategy include:
Grow the Base of Merchants
Shopify sees a significant opportunity to increase the size of its current merchant base, which is 2,063,000 merchants as of 2021.
Shopify intends to grow its base of merchants primarily by inspiring entrepreneurship through marketing programs with a dedicated focus on product marketing and awareness-driven campaigns paired with global earned media efforts and ongoing content creation and distribution to educate.
Shopify continues to invest in functionality to boost the adoption of Shopify by merchants around the world. While it is essential to establish relationships early in the business lifecycle and grow along with its merchants, Shopify also sees considerable opportunities, with larger businesses looking for faster time-to-market and better value as they innovate to meet rapidly evolving buyer demands. As such, Shopify invests indirect sales efforts focused on acquiring more prominent merchants and brick-and-mortar retail merchants.
Shopify’s merchant acquisition strategy primarily focuses on marketing that builds awareness of its offerings. Shopify’s approach emphasizes using data and analytics while continuously innovating and testing new ideas to drive growth.
Grow Merchants’ Revenue
It’s a no-brainer that the more a merchant sells on Shopify, the longer they are likely to remain with Shopify, and the more revenue Shopify generates as they process more transactions, upgrade plans, sell through new sales channels, ship more products, and use additional solutions.
Shopify helps its merchants sell more through initiatives such as blogs, its digital community, its online business training platform, its global events and meetups, and exclusive learning and engagement initiatives to educate its merchants on how they can be even more successful with Shopify.
Shopify also invests in commercial efforts to help merchants unlock more of the value in Shopify’s offerings by educating them about how its solutions can help them continue to grow their businesses.
Innovation and Platform Expansion
The Shopify platform is a multi-tenant cloud-based system engineered for high scalability, reliability, and performance.
The platform supports innovation and rapid technological changes in commerce. Hence Shopify has consistently expanded the functionality of its platform over the last decade.
In addition to the suite of merchant solutions Shopify has added over time, Shopify advances its technologies, tooling, and infrastructure so merchants can keep pace with the rapid changes in commerce and be among the earliest adopters of commerce innovation.
Grow and Develop Ecosystem
Shopify has a thriving third-party ecosystem that includes app developers, theme designers, and other partners that bolster the functionality of its platform.
In 2021, Shopify made its terms more favorable to its app and theme developer partners by reducing its revenue share on the first $1 million earnings in a calendar year to $0 and retaining 15% on subsequent revenue. These competitive terms increase the appeal of Shopify as a platform on which to build and enable partners to reinvest in their own growth and innovation.
Shopify also hosts an annual conference, Shopify Unite, to demonstrate to partners the opportunities that exist to collaborate in building the future of commerce technology.
As part of its growth strategy, Shopify wants to grow its ecosystem to make the Shopify platform more attractive and stickier, further expanding its merchant base and driving additional growth.
Expand Referral Partner Programs
Shopify has strong relationships with thousands of design and marketing agencies worldwide. These agencies build merchant web and mobile shops on Shopify’s platform. As part of its business and growth strategy, Shopify intends to strengthen its existing relationships with referral partners and create new ones to expand its overall merchant base.
Shopify’s partner ecosystem helps drive the growth of its merchant base in two ways: by referring new merchants and by extending the functionality of the Shopify platform through the development of apps.
Build for the long-term
Shopify claims to have a culture of iteration and experimentation that maximizes long-term value. Many of its investments are made with an eye toward what Shopify speculates merchants would require to improve the customer experience.
For example, Shopify has invested in additional buyer touchpoints, such as retail, shipping, fulfillment, and Shop, Shopify’s all-in-one digital shopping companion app. Brands that sell on Shopify can offer buyers an end-to-end, managed shopping experience that previously was only available to larger businesses.
Such longer-term initiatives include localizing the platform for international expansion, promoting its brand, expanding its existing services, introducing new solutions, and entering into strategic partnerships and acquisitions.