In the 47 days my family has been homebound (but who’s counting?), we’ve felt it is our civic responsibility to support the local stores in our Boston suburb of Arlington. Every other day, we open UberEats, pick a cuisine, and find a nearby eatery that delivers. But until now, it’s been harder to find other businesses—like bookshops, craft stores, or clothing boutiques—that offer pickups or deliveries. E-commerce logistics platform Shopify wants to help fix that with its new app, Shop, which launches today.
The app allows users in North America to browse and purchase products from any of the 1 million merchants that use Shopify’s e-commerce logistics platform or its in-store point-of-sale services. (Shopify currently powers the e-commerce sites of some of the most prominent direct-to-consumer startups, such as Allbirds, Brooklinen, Kylie, Outdoor Voices, and Rothy’s, along with legacy companies, like Budweiser and LeSportsac.) Users can browse product inventory much in the same way that customers scroll through online menu items when they order through UberEats or Doordash. They can follow their favorite brands and get updates about new products and discounts. They can also go to the “Shop Local” function, where the app will search for brick-and-mortar stores in the United States that are close to their most recent delivery address. This will allow them to find and shop from local merchants that use Shopify’s products. Shop is an evolution of Shopify’s Arrive app, which allows users to track the shipping of their online purchases.
Significantly, brands do not have to pay any additional fee to be on the Shop app nor do they have to pay commissions for any sales made through it. There’s also no way to buy higher placement in the app’s rankings, the way companies might on Amazon or Google. “This was not designed to be a discovery platform,” says Carl Rivera, GM at Shopify, who led the launch of the Shop app. “This is a way for brands to own and deepen their relationship with their customers.” As with Shopify’s e-commerce services, Shop gives brands access to their customers’ data—another key difference between it and platforms such as Amazon and UberEats. (The app’s debut follows on the heels of Shopify’s launch of its own fulfillment network in 2019, putting it in direct competition with Amazon.)
When I tested an early version of the app, I found that a nearby craft store called Pinecones and Needles is still selling products. Thanks to the app, I was able to order some puzzles or watercolor pencils, which the store delivered to my house for free. It was a win-win: I was able to support the business, but I could also get the supplies more quickly than I would have through many online stores, which currently have extended delivery times.
Rivera says his team had been planning to launch the local feature later in the year, but they brought it forward to help support businesses that have been suffering in the midst of the pandemic. “We’ve been working around the clock because businesses need this right now,” he says.
Small retail outlets—those that have fewer than 10 employees and are less than five years old—are the most vulnerable to closing as a result of the COVID-19 crisis, according to a report from Brookings about the economic impact of the coronavirus. Without a lifeline, many local businesses may not survive the current disruption and the looming recession. While government assistance might help stem immediate losses, it’s unclear how long local businesses will be able to stay afloat without any revenue. The Shop app might nudge consumers to spend their money at these stores rather than at big retailers, such as Amazon or Walmart.
It is unclear, however, exactly how many mom-and-pop businesses are on the Shopify platform in the first place. The company declined to provide such data. The craft store near me was a couple of towns over, and there were no stores in Arlington proper that appeared to use Shopify. And even if a small business showed up on the app, it would also need to have the mechanisms for items to be picked up, delivered, or shipped.
The app seems most useful for digitally native brands that have a robust online presence and, perhaps, brick-and-mortar stores as well. A good example of this is Kotn, a five-year-old Canadian brand that makes cotton basics. The brand first launched online, but has three stores on large shopping streets in Toronto, Vancouver, and Montreal. Ben Sehl, Kotn cofounder and chief digital officer, says the brand made a third of its revenue through its brick-and-mortar outposts, which have been closed since mid-March. Since Kotn uses the Shopify platform, the brand will automatically show up on the app for people who live nearby. “We’ve found that our brick-and-mortar stores have allowed us to deepen our relationship with customers,” says Sehl. “Customers are already opting to pick up products in-store because they like the idea of shopping local, and the app will hopefully drive more customers to the store.”
While Shopify will not make any revenue from Shop directly—at least not yet—the new app is a smart way of enticing new and smaller businesses to try Shopify’s services, including its e-commerce store builder and its payment system. In other words, Shop could turn into a powerful customer-acquisition tool for Shopify. “It might encourage local business to take a look at what Shopify can offer,” Rivera acknowledges. At a time when Amazon is increasingly drowning out the mom-and-pop shops on Main Street, Shopify is offering them a new way to stay afloat.