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Shopify launched a new Shop app to browse Shopify-powered stores and buy stuff from them.

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maccordrey's avatar
2 years ago

I think this is highly interesting. There are a few historical analogues we've seen of aggregating supply to build a consumer-facing portal. OpenTable and Mindbody have both done this (moving from supply-facing SaaS to aggregating/commoditizing supply in a consumer-facing portal). Mindbody customers, for example, were rightfully apprehensive about the Mindbody consumer marketplace, as it commoditized their offerings (just making them one amongst many). This was great for the best Mindbody customers, as it acted as free demand-gen, but undoubtedly hurt some customers . Shopify merchants may feel similarly, although this interface seems more like a TaoBao rather than a standalone marketplace (e.g. Amazon). I haven't spent enough time on the Shop app, but interested to see where it goes.

6 points
awwstn's avatar
@awwstn (replying to @maccordrey )
2 years ago

Really interesting analogy! Didn't know anything about Mindbody before this.

1 point
vikrambm29's avatar
2 years ago

It's an interesting strategy. This seems to side step from the Shopify core value of creating a platform for merchants and is now competing with them.

3 points
maguay's avatar
@maguay (replying to @vikrambm29 )
2 years ago

Ideally this will help Shopify-powered vendors reach more customers who discover their store through searching inside the Shop app—though I do wonder if some vendors would rather not advertise that they're using Shopify, if essentially they felt like having a stand-alone website and not being part of a marketplace was part of their brand.

One spot where it might directly hurt vendors selling on Shopify though is comparison shopping—makes it easier to find people selling similar items. Though there is always Google for that too...

1 point
Nkika85's avatar
@Nkika85 (replying to @vikrambm29 )
2 years ago

I don't think it is competing with them. Shopify isn't selling its own products.

1 point
tonixx's avatar
2 years ago

This is a smart move from them! But the smartest thing they could do is to partner up with Instagram and offer the option for Instagram influencers to sell stuff from Shopify and earn affiliate commission. Now that Amazon has decreased their aff commissions, it's a great move to offer an alternative option

3 points
maguay's avatar
@maguay (replying to @tonixx )
2 years ago

Actually affiliates could be a very smart move to help build backlinks + traffic for Shopify vendors. Amazon Affiliates were a great lever to making them the default marketplace people linked to, but as you mentioned, as they've lowered commissions now. If Shopify built a system where you could use the same affiliate system to earn revenue from linking to any product sold in any Shopify store, that could be a strong competitor.

1 point
hughdurkin's avatar
2 years ago

Smart move from Shopify, and - to be fair to them - a pretty obvious one.

They already have full visibility into all the products available across all their merchants, including pricing/availability/location/etc.

Through the previous version of the app, they also have visibility into what consumers are buying from them. And now, if you sign up/in with Google, it will have a deeper understanding of that as they ask for perms to connect your emails to it.

I see a few ways this will evolve:

  • a new ads business for Shopify (Shop app = B2C ad inventory)

  • local click and collect (the end game for POS customers is to also act as delivery hubs for other customers)

  • same day delivery (competing with Amazon) for the same POS reason above

3 points
Jepo43's avatar
2 years ago

If this is meant to compete with Amazon's marketplace, it'll take a long time before it reaches any sort of critical mass. I wonder who they'll target outside of their merchant base.

2 points
maguay's avatar
@maguay (replying to @Jepo43 )
2 years ago

Wonder if this could be more competition to Etsy-type marketplaces in the short term?

1 point
alizainfeerasta's avatar
2 years ago

Merchants on Shopify spend a lot of time and effort to build their brands - this will decrease the advantage well-established brands have and open them to competition from smaller brands selling similar products.

On the flip side, Google's already helping Shopify compete with Amazon, no need for the Shop app per-se. Google's recent announcement and Ben Thompson's accompanying blog-post explore this really well.

Shopify will have to tread carefully.

2 points
maguay's avatar
@maguay (replying to @alizainfeerasta )
2 years ago

Yeah, it's been fascinating to see more Google Shopping "ads" (though they're free, so not exactly ads) showing up so quickly.

The interesting thing is that Google apparently wants to make sure people don't default to searching for products on Amazon and keep Googling for shopping queries, enough they're willing to give away Google Shopping. But if so, they should equally not want customers to search through Shopify Shop by default either.

1 point
maguay's avatar
2 years ago

The clever thing about this is Shopify originally built Away, a package-tracking app (which would be useful both for customers of Shopify stores and everyone else)—and then pivoted that app into a Shopify shopping app. That gives it a massive install base out of the gate.

Interesting shot at turning Shopify into a broader marketplace than just individual stores powered by the same software.

1 point
Fnrkxm's avatar
@Fnrkxm (replying to @maguay )
2 years ago

This is indeed one more step on strengthening Shopify’s position as the largest potential threat to Amazon.

2 points
imknight's avatar
@imknight (replying to @maguay )
2 years ago

I think the idea is pretty clever and I think it will be more powerful if is integrate with geo location.

1 point
yusufumac's avatar
2 years ago

The next obvious step for the proliferation of direct to consumer businesses is aggregation business models. What got the e-commerce businesses today, i.e underpriced marketing channels and lack innovation from incumbent brands, will not get these businesses to tomorrow especially the landscape is changing. Enter 'Shop' and subsequent aggregation models.

1 point
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