At its virtual Reunite conference, Shopify unveiled various solutions catered to businesses impacted by the coronavirus pandemic, including new local delivery offerings, a new finance management platform and merchant debit card, an installment payments option, and increased access to its Shopify Fulfillment Network.
Up until Reunite, the e-commerce giant had kept its Shopify Fulfillment Network in invite-only early access mode. But the network, which uses machine learning to predict demand, allocate inventory and route orders to the closest fulfillment center, is now accepting applications from all Shopify merchants. When it first launched in June, Shopify said it would spend $1 billion over five years on building out the network.
Shopify recently opened its first research and development hub in Ottawa as part of the fulfillment network. At the hub, the company will trial new robotics and fulfillment technologies, iterate and improve on warehouse operations and fulfill Canada-based orders. Robotics is a major part of the company’s fulfillment strategy—in September 2019, Shopify purchased automation and fulfillment solutions company 6 River Systems for $450 million. As a provider of collaborative warehouse services, 6 River Systems manufactures robots named “Chuck” to automate much of the picking, packing, sorting and inventory replenishment tasks that would otherwise fall to human workers.
The Shopify Fulfillment Network is expected to rival the Fulfillment by Amazon service, allowing merchants to scale their fulfillment strategies through Shopify’s partner network.
The company says the network is best for merchants who currently use a third-party logistics provider but whose delivery service levels aren’t being met and do not receive dedicated fulfillment support. The network is also suitable for merchants serving U.S. customers who manage fewer than 2,000 SKUs and ship between 10 and 10,000 orders per day.
Alongside the Fulfillment Network expansion, Shopify revealed more about its aim to help businesses financially during COVID-19. Shopify Balance, which includes the debit card and money management account, is designed for the needs of independent business owners and entrepreneurs, giving these merchants access to financial products to start, run and grow their businesses. The Balance account will reside within the Shopify admin so that merchants can view cash flow, pay bills and track expenses all in one place.
Within Balance, merchants now have access to both physical and virtual branded debit cards. An unnamed third party will provide the infrastructure to handle transactions in the background so merchants get their money immediately. Merchants often must wait several days for transaction funds to appear in their bank accounts, and must frequently pay fees for the service.
Balance will not include monthly fees or minimum balances, and will launch in early access later this year in the U.S.
The decision to launch Balance came after Shopify conducted an internal study of its merchants and discovered that nearly 40 percent are currently using their personal bank accounts and cards for business, meaning they’re combining their personal and business finances.
During the event, Shopify also showed that it has hopped aboard the installment payments bandwagon, introducing Shop Pay Installments, which includes a “Buy Now, Pay Later” option that let sellers give shoppers the option to split purchases into four equal interest-free payments over time. Working with an unnamed partner, Shopify will launch Shop Pay Installments later this year. It will be available to U.S. merchants eligible for Shopify Payments.
The retailer gets the advantage of still getting the money up front. For example, a shopper can make a $400 purchase and pay it off over four months in $100 installments. But the merchant would get the $400 immediately.
In addition, Shopify has been rolling out a Local Delivery app that enables businesses to define a delivery area using distance radius or zip/postal codes, set local delivery fees and minimum order price, and fulfill local orders through Shopify, Shopify POS and Shopify Mobile. Merchants can even use the Local Delivery app to create optimized delivery routes and send customer notifications when deliveries are on the way.
Local shopping has skyrocketed as consumers continue to abide by stay-at-home guidelines. Average daily local orders on Shopify for the six weeks ending April 24 grew 176 percent, compared to the prior six weeks, which the company attributes to the introduction of physical distancing measures. As of April 24, 26 percent of brick-and-mortar merchants in Shopify’s English-speaking markets were using a local pickup and delivery solution, compared to just 2 percent at the end of February.
As of March 20, all Shopify sellers can allow shoppers to buy gift cards. With many businesses unable to open brick-and-mortar storefronts and some unable to deliver products during the COVID-19 crisis, the gift card addition provides a necessary supplement to cash flow. Merchants also now have the option to collect tips at checkout.
Shopify already launched its consumer-facing Shopify Shop app in April designed to give local businesses direct access to more shoppers, but more features are in the pipeline. Coming soon to the U.S. and Canada, Shopify will let merchants debut a Shop Channel to control how their brand appears on Shop.
The batch of news comes as Shopify has also had to adjust to COVID-19’s new normal. Shopify was originally supposed to host the fifth installment of its annual partner and developer conference, Shopify Unite, in Toronto earlier this month, but the company cancelled the event over concerns stemming from the virus’ outbreak.