On Wednesday, Shopify (NYSE:SHOP), the leading provider of e-commerce tools for businesses of all sizes, hosted Shopify Unite, the annual conference that brings together its global partner and developer community. At the yearly event, Shopify provided a laundry list of updates regarding platform additions and enhancements designed to give merchants the tools they need to build and manage an online business.
Investors got a boost of confidence from these developments, driving the stock up more than 7% in the wake of the announcements.
Let's take a look at some of the most noteworthy revelations and how they're positioning Shopify -- and its merchants -- for the future.
1. Shopify Fulfillment Network
Taking a page from Amazon.com, the master of e-commerce, the company debuted the Shopify Fulfillment Network, "a new way to get orders to your customers quickly and easily." Qualifying merchants in the U.S. will be eligible to apply for early access to the program, which offers a dedicated network of fulfillment centers and smart inventory-allocation technology. The system, which is powered by artificial intelligence (AI), helps determine the closest fulfillment center and optimal level of inventory at each location to help ensure both fast and low-cost delivery.
By offering a solution that not only lowers delivery costs but accelerates shipments, Shopify is providing services that are typically reserved for larger, more established merchants -- and making its services stickier in the process.
2. Shopify Plus gets a makeover
After initially focusing on small- and medium-sized merchants, Shopify realized that some of its more established sellers were outgrowing its services. The company developed its Shopify Plus platform to cater to the unique needs of enterprise level e-commerce merchants, who can operate dozens of stores across a multitude of geographies.
Shopify has overhauled its Shopify Plus platform to offer a centralized view that aggregates data from multiple locations. The system also allows enhanced user control and permissions for businesses with multiple users, while allowing them to add new stores to the system quickly and easily. The company also expanded the capability of Shopify Flow, an integration tool that helps simplify workflows by connecting applications and automating repetitive tasks. The more robust Shopify Plus platform will be available later this year.
Enterprise is a fast-growing opportunity for the company. In the first quarter, Shopify Plus merchants contributed 26% of the company's monthly recurring revenue, up from 22% in the prior-year quarter, and now accounts for 8% of Shopify's subscription-solutions revenue.
3. Next-gen POS software
The merchant of today exists across a variety of sales platforms, selling in both brick-and-mortar and online stores. In order to cater to the needs of both facets of a growing business, Shopify is adding to the existing capabilities of its point-of-sale (POS) software.
The latest iteration is designed to simplify the checkout experience by "creating new customer profiles, sorting collection lists, finding top products, and checking out." The system also allows store managers to set individual permissions for store employees, giving each a unique login and level of access that can be accessed from any store during any shift. The system can also be customized to integrate with customer loyalty and rewards programs and promotions.
4. Increasingly global capabilities
Merchants that deal with international and cross border sales face a host of unique challenges, including language and currency issues. Shopify has been making significant investments in recent months to localize its platform in a variety of global markets.
That trend continued this week, with the addition of 11 new languages to the Shopify platform -- on top of the six that were added last year. The platform also permits international merchants to sell products in multiple currencies while getting paid in the currency of their choosing. The system automatically updates product prices based on current exchange rates so customers get the most up-to-date information. Shopify is also providing a Translations feature that can be used on buyer-facing content, product descriptions, and blog posts.
5. Customer-engagement tools
The ability to offer a customized experience to shoppers is one of the hallmarks of e-commerce, and this fact hasn't been lost on Shopify. The company introduced tools that allow merchants to customize the look and feel of any page in their online store quickly and easily, without having to rewrite the computer code. In addition to these improved editing tools, Shopify is adding new, more robust customer-engagement features, like the ability to display products using video, 3D, and augmented reality, all within the Shopify platform.
E-commerce is the wave of the future, and businesses that don't adopt and embrace this reality will surely be left behind. Shopify's bread and butter is providing merchants with the tools they need to succeed. Each of the announcements highlighted above shows the lengths to which Shopify is going to empower their merchants and help them to prosper.
In the end, it will be Shopify -- and its investors -- that will reap the rewards.