CHAPTER 10 VIDEO CASE ASSIGNMENT 1
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CHAPTER 10 E-commerce: Digital Markets, Digital Goods
VIDEO CASE
Shopify is Writing the Future of Commerce
Video 1:
Shopify Earnings Soar Even as Economies Reopen
https://mediaplayer.pearsoncmg.com/assets/_video.true/HE_ProfCareers-IT-2023-
laudon_emis15e-shopify_earnings_soar
Length: 5:35
Video 2:
Shopify is Writing the Future of Commerce, Says President
https://mediaplayer.pearsoncmg.com/assets/_video.true/HE_ProfCareers-IT-2023-
laudon_emis15e-shopify_future_of_commerce
Length: 4:10
Read the case here:
Shopify is a user-friendly all-in-one e-commerce platform that helps small businesses build an online store and sell online through one streamlined dashboard. Shopify merchants sell on social media sites, seller marketplaces, other blogs and websites and
via email, text and chat. Shopify also supports in-person selling with its built-in point-of-
sale (POS) for retail stores, pop-up shops, market sales and more.
Shopify provides ready-to-use online store templates that are fully customizable to make each online store look distinctive. A small business can choose from a myriad of store templates that are pre-designed and optimized for maximum sales. Shopify makes
it possible for entrepreneurs, independent brands, and small businesses to compete against online retail giants such as Amazon. Consumers are now able to more easily discover new brands, merchants can find what they need for their store, and developers
can build their businesses supporting these merchants and entrepreneurs. Shopify has helped democratize e-commerce by making it possible for players of all kinds and sizes to participate online and offline. Shopify believes e-commerce is wherever the customers are and has developed capabilities for mobile and in-person sales. Just under seven out of every 10 sales on Shopify are made by mobile users. Shopify regularly launches new apps, tools, customizations, effective payment systems, and numerous redesigns. Shopify’s Shop Pay is an accelerated online checkout and payment service that lets buyers save their email address, credit card, and shipping and billing information and use it to autofill checkout fields on return visits to a website. Customer payment information is encrypted and securely stored. Small businesses can use Shop Pay on their websites to help customers pay faster. However, the product goes beyond the Shopify ecosystem. It is also now available on Facebook, Instagram, and Google.
E-commerce businesses that use Shopify make significantly more sales than those using other platforms. The average Shopify shopper buys 3.8 times from the same store, indicating that stores on this platform are delivering a sticky customer experience.
More shoppers have a propensity to return to the same Shopify store, deepening the relationship with the customer over time. Consumers still crave a traditional and physical retail experience but with the same expectation for seamless immediacy. In 2022, Shopify launched an offline payments feature called POS Go, allowing in-store merchants to use a piece of mobile equipment with a built-in barcode scanner to do checkouts anywhere in the store. In the first half of 2022, sales made using Shopify’s point-of-sale system grew 60% from 2021. Shopify’s POS Go lets shoppers build a cart in the physical store and then check out and purchase either in the store or back at home. The technology also gives merchants a more comprehensive view of their business. For example, some shoppers enjoy buying in-person and returning online or vice versa. These hybrid interactions are often difficult to track for many merchants. Shopify’s POS Go breaks down the walls between e-
commerce and traditional brick and mortar commerce. This is the type of sophisticated experience you would find at an Apple store but is now available on Shopify for small and medium businesses.
Shopify has been building out its own Shopify Fulfillment Network (SFN) to challenge Amazon's fulfillment services and its own marketplace through the Shop app to better compete with the Amazon marketplace. Amazon has not taken Shopify's growth efforts lightly. Fulfillment By Amazon (FBA) and the Amazon marketplace are key elements of Amazon's moat, which it is leveraging against Shopify and other e-commerce website developers to defend its dominance and fend off growing competition. Buy With Prime competes directly with Shopify’s Shop Pay service. Shopify has sought to expand the feature beyond its own platform, striking deals with
Facebook
and
Google
to let their customers use Shop Pay to make purchases.
Shopify’s App Store has over 9000 features built by third-party developers to customize stores or provide additional e-commerce functionality. For example, The GLD Shop, which sells high-quality affordable gold jewelry inspired by athletes and celebrities online,
uses several Shopify apps to enhance its business processes. It uses Product Reviews by Shopify to obtain direct feedback from customers on specific products, which helps it make better decisions about what items to add or to drop. It uses ShipStation by Shopify to make shipping operations more streamlined and effortless. Shopify also has several versions, with pricing starting at $29 per month and a Shopify+ version with more features and integrations for larger businesses.
Will Shopify be able to “write” the future of e-commerce, as its CEO believes? Small and
independent businesses are definitely benefiting from this ready-made selling platform and Shopify now has over 2 million daily active users. But like small businesses everywhere, Shopify stores have a high failure rate (some sources say as high as 95 percent) due to factors such as
low traffic footprint, unclear objectives, poor production
quality, increased competition, and difficulty managing orders and inventory, with small and independent businesses especially vulnerable.
Sources: Shopify.com, accessed March 9, 2023; Sajini Annie John, “10 Major Reasons Why 95 Percent of Shopify Stores Fail,” iDentixweb.com, February 27, 2023; Tina Orem
and Lisa Anthony, “Shop Pay: What It Is, Benefits, and How It Works in 2023,” Nerdwallet.com, January 3, 2023; “Krista Fabregas and Kelly Main, “What Is Shopify and How Does It Work (2023 Guide),” Forbes Advisor, December 30, 2022.
Multiple Choice Questions
1. All of the following are true for Shopify except
:
A) Shopify can be used by large businesses. B) Shopify payment services are only available to merchants on Shopify.
C) Shopify is stickier than other e-commerce selling platforms.
D) Shopify can be further customized using apps.
2. Which of the following is not
one of the reasons small businesses on Shopify have s a high failure rate: A) The technology for setting up a Shopify store is not easy to master.
B) Small businesses are often unclear about their business objectives.
C) It is difficult for new businesses to manage orders and inventory.
D) Small businesses are less likely to have good production quality controls.
3). Which of the following Shopify services competes with Amazon’s Buy with Prime service?
A) Product Reviews
B) ShipStation C) POS Go
D) Shop Pay
Essay Questions
1. What are the business benefits of Shopify? What are the social benefits?
2. List and describe three e-commerce services Shopify offers and how they make Shopify more competitive.
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