Shopify Sales Double as E-commerce Gains
Shopify Inc. is thriving at the point where merchants plug into e-commerce.
The platform, which provides brands with the tools they need to sell online, drove revenues up 110 percent to $988.6 million as the company processed orders with a gross merchandise volume of $37.3 billion.
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Net profits for the quarter ended March 31 were bolstered by a $1.3 billion unrealized gain on the company’s investment in the payment firm Affirm. Adjusted income rose to $254.1 million, up from $22.3 million a year ago.
And Harley Finkelstein, Shopify’s president, told analysts on a conference call that the rush to e-commerce was not ending, even as the U.S. starts to open up more as people become vaccinated.
“The center of gravity is now online,” Finkelstein said. “Consumers want to buy and they’re voting with their wallets to buy from independent direct-to-consumer brands of which Shopify has the majority of them. And I think that you’re going to continue to see this trend continue well beyond the pandemic. E-commerce is still really quite small relative to total retail, and it will continue to grow really nicely.”
Along the way, Shopify is looking to make it all easier.
“We continue to reduce friction from our merchants so they can find new buyers, build strong customer relationships and more easily manage the increasing complexity of their back-office operations as they scale,” Finkelstein said.
“Discovering new buyers is a top pain point for businesses,” he said. “Multichannel selling, which is one of our core value propositions, is becoming more critical as the cost of customer acquisition climbs and the lines blur between online and offline commerce. Our sales and marketing channels help merchants to show up where future buyers are spending time. We are ushering in a new era of social commerce and helping more brands and consumers engage in the digital mainstreams. The number of shops actively selling on Facebook shops has more than quadrupled since the first quarter a year ago as well as the GMV through Facebook.” The company is also helping merchants connect with shoppers on TikTok and Pinterest.
The firm is also building bridges to the past as the president noted Lord & Taylor, which was founded in 1826 and went through bankruptcy last year, has now launched on Shopify in its latest incarnation.
“Shopify is truly becoming the world’s entrepreneurship company,” Finkelstein said. “There’s an inspirational story for as many merchants as they are in Shopify.”
The company’s success is a sign that there is e-commerce beyond Amazon and that more smaller companies were able to connect with shoppers during the pandemic rush to the web.
The firm has expanded its ecosystem and noted that roughly 45,800 partners referred a merchant to Shopify over the past 12 months, an increase of 73 percent.
Shopify has been working hard to make itself indispensable.
The company has been building the base of what it calls the Shopify Fulfillment Network, software to help merchants handle their inventory with more flexibility. Shopify is also working on its all-in-one mobile shopping assistant, Shop, to give merchants more ways to be discovered by shoppers.
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