Do you think that Shopify could soon rival Amazon?
Notice: This has been cross-posted to another website, and re-worded
I currently work in the eCommerce industry, and have hands-on experience building up a Shopify site from the ground up. As I watch all of the developments that Shopify makes both from a technical development standpoint and logistical standpoint, it becomes more and more clear to me that Shopify can begin to take on Amazon directly.
The introduction of Shop app, which aggregates all shipments into a single application including those outside of Amazon, also allows users to browse products from any particular Shopify store. The app also notifies you of any shipping updates, and when packages have been delivered.
From a technical standpoint, Shopify's main attractions come down to a few things: order management, credit card processing, customer management, and plugin integrations. This is the core of Shopify's platform for both larger and smaller businesses. Though due to Shopify's requirement of using their CMS to serve your content, enterprise users have to look elsewhere in order to build something called "headless builds", which essentially use alternate CMS mixed with Shopify's CMS to continue serving their content.
There are a few companies that make such software in order to build out a fully custom site while still using the Shopify platform as its core, though at the moment they are a little 'hacky' but still fully functional. Given the interest in Shopify's platform at such a high level, they are very likely working on their own headless framework which could allow for 1) mainstream stores to integrate their existing platforms into a unified Shopify marketplace, and 2) to allow stores to build out fully custom websites using the Shopify platform at its core and also enroll them into a unified Shopify marketplace.
Amazon has mostly become a front for cheap Chinese-made products, laden with review manipulation and questionable product quality. By instead bringing large brands on board with a unified Shopify marketplace, those stores can sell quality products backed by their brands which can gain trust from customers, and will give rise to smaller brands that may have been unnoticed by larger populations.
[ For example, I recently bought a pair of shoes from a very popular Shopify store: they represent quality, comfort, and eco-friendliness. I personally find myself more willing to spend money on quality products from companies I know I can trust. ]
What's everyone's thoughts? Are there any general problems that could come from Shopify trying to jump-start a full-blown marketplace? Do you think that companies would be willing to integrate their ERP's and CMS's with whatever API's or headless framework Shopify decides to build out?
Nope. Shopify still doesn't handle the supply chain, which is the real miracle of amazon prime, and what even with all the Bezos bucks that infrastracture took the better part of a decade to build out. Also, you mentioned cheap Chinese products, but actually, Shopify is kinda the poster boy for that right now. Drop shipping on Amazon has become more and more unprofitable (well, not that it was that profitable to begin with).
Instead, Drop shipping on default shopify templates is the new hotness. You don't even need to hold the product. When a customer orders your illegally overadvertised product from aliexpress, you actually just file an order from aliexpress to the customer's address. You can even automate it.
Personally, as an Amazon customer, what keeps me on the platform is 1. speed and reliability and 2. customer service and 3. uniformity over all that. Speed is important, even for frivolous items, because shipping mistakes happen all the time, whether that be a USPS package a shopify store ships out or Amazon's internal delivery service. And with 1 or 2 day shipping, you know that something's wrong pretty much immediately.
It also means that during the pandemic especially sometime I just get lazy and order daily necessities like shampoo when I run out since it'll come so quickly.
Additionally, returns on amazon are easy. Especially if you happen to live next to a Kohls or a amazon locker. It's essentially the same as returning a game on steam now: you press the button, Amazon gives you a QR code, now you can drive to Kohls and return your item. No questions asked. That means I'm able to do far less research and have basically no FUD about items I've ordered, because in less than 10 minutes I can drive to Kohls and have it returned. Zero emails to customer support, no negotiating, nothing. Just your money back a few hours later.
Third, it's just nice to have uniformity. If you stick to prime items, you don't have to worry about whether or not the merchant is charging shipping, you don't have to worry if the package will come in 3 weeks because the merchant is halfway across the world, you don't have to worry about their refund policy because it's all covered under Amazon's refund policy.
A unified Shopify storefront that just combines individual stores accomplishes none of that. Shopify, currently at least, simply provides the software for merchants to open their online store. You then actually handle your transaction with that merchant. It's that merchant that ships the product to you, it's that merchant that handles (or ignores) your customer support emails, it's that merchants that chooses to allow or not allow you to return the item.
And to be honest, I don't see why Shopify would bother trying to rival Amazon. Their current niche of B2B SaaS software is waaay more lucrative, with high margins and predictable revenue. Retail is low margin and a pain in the ass. There's a reason most of Amazon's net profits is from AWS.
Until Shopify has completely saturated their market (which they are not even close to), they have so much more lucrative growth by just being better at what they do now than to fight Amazon.
On that note, I think the closest to a Amazon rival is Walmart. Walmart+ came out, and they do have the on-the-ground infrastructure in place.
I think it's very possible. Everyone I know (mostly early 20s and socially conscious, but also conservative family) is jumping ship from Amazon purchases and buying directly from small business for exactly the reasons you mentioned: Amazon's products and reviews are untrustworthy. Even Etsy seems to have more and more homogeneous products listed by big groups. So I think that Shopify, and probably sites like Squarespace too, are poised to be the architecture for small business to take on the giant marketplaces. Look at how well Bookshop is doing! I know that's a different model, but it gives book retailers a marketplace and gives consumers a choice.
The only thing Amazon and Shopify have in common is they facilitate e-commerce. Hopefully Shopify will never compete with Amazon, because that would imply they had to become like Amazon.
They are a great player for democratizing e-commerce, apparently making it easy to open a store. The majority of my recent non-Amazon purchases have been through shops using Shopify, and they've taken over this space quickly. The closest Shopify should get would be to provide a central way to search a bunch of shops, but I would say even that's a step too far.
Yeah, no one wants a Shopify-branded shop.