Forrester recently predicted that the online retail market will grow to $370 billion over the next four years, up from $231 billion this year — a 10 percent compound annual growth rate. In other words, the message is clear: The eCommerce juggernaut ain’t slowing down any time soon. In 2013, every business needs some kind of online presence; the problem, of course, is that many small business owners don’t have the technical know-how (or capital) to set up their own eCommerce marketplace.
It’s this problem that gave rise to services like Etsy, Weebly, Wix, Zaarly and one million more, who aim to make it easier on businesses and merchants to sell online. It’s an service that The Economist apparently just discovered, which left out a slew of similar companies (that have been around for years) in its coverage today. Founded in 2005, one of the largest players in the create-your-own-online store space is Shopify, a service that allows anyone to set up an online storefront in a few minutes, quickly adding the products they want to sell, accept payments through PayPal and others, add images and more.
The company has flown under the radar of late, partly due to the fact that it’s been quietly preparing a huge update to its platform. (In fact, the company tells us that the redesign has “literally been years in the making.”) In private beta since October, today Shopify is pulling back the curtain on v2.0 and officially making it available to the public.
The new redesign is the product of the company’s $22 million Series A and B rounds as well as last year’s acquisition of mobile app developer, Select Start Studios, which has helped the company accelerate its mobile strategy — a fundamental part of its overall redesign. The team helped develop Shopify’s new iPhone app, which was released last year, and has since focused on adding new responsive themes (i.e. templates) to the company’s theme store.
Along with building out its mobile platform, Shopify is also changing up its pricing model and will now offer a cheaper “Starter” plan for businesses (which includes 24/7 support) — both of which aim to make its platform more affordable and accessible to small businesses. Of its new pricing, Shopify co-founder and CEO Tobias Lütke said:
For years, Shopify’s least expensive plan cost $29/month. With the release of Shopify 2, we now offer a ‘Starter’ plan for $14/month, which gives merchants the same eCommerce platform, minus a few of the more advanced features and functionalities … The idea being that we want to offer options for merchants regardless of where they are in the lifecycle of their business, and, with our new, less expensive option, we want to remove the barriers for those who are new to selling online.
On top of its new “Starter” plan, Shopify is also introducing an Enterprise plan to cater to high-volume clients, priced at $1,000/month. While one would assume that a service like Shopify would cater mostly to small businesses, big-ticket brands want access to the same functionality and are eager to reduce the cost of paying for expensive third-party eCommerce software — or having to build their own.
As a result, Shopify has recently become home to a growing number of big-ticket brands, including Budweiser, Gatorade and Wikipedia, the CEO tells us, which are increasingly looking to swim downstream to hosted SaaS solutions. The two new plans bring the total to five (Starter, Basic, Professional, Unlimited and Enterprise. (Plans broken down by features here.)
Beyond pricing, Shopify’s redesign includes a host of new features, including the ability for merchants to now offer partial refunds without having to use PayPal, along with improved search functionality across the site and improved admin functionality (like meta descriptions, an example of something that users previously had to pay for). The biggest additions, the CEO tells us, are features like a live theme editor, which allow merchants to build and customize the look of their store in a live preview window before publishing. Merchants can now edit colors, fonts, spacing, images and so on, instantly seeing how these changes would look.
The company has also completely overhauled its order management system, which now offers abandoned checkout management, merchant-side order editing, refunds and improved fraud detection. The other key, the CEO tells us, is that Shopify has, fundamentally, re-built the platform from scratch to allow for more flexibility and to allow it to expand across all forms of eCommerce.
The CEO also revealed some historical growth stats, which show that Shopify went from 18,000 active stores in 2011 to 41K active stores in 2012, and projects to hit 80K this year. Its gross merchandise value — or total sales across its storefronts — grew from $275 million in 2011 to $742 million in 2012 to what it projects will be $1.5 billion by the end of the year.
Ultimately, after briefly poking around Shopify 2, it’s easy to see that a lot of time has been put into building the new platform. The design is much approved, as is the user experience; it’s much easier to navigate. As alluded to earlier, there is now a long list of competitors in this space, and Shopify may not have helped itself by taking so long to push its redesign.
But it’s clear that the company is now trying to take on the “Bigcommerce” players like Magento and Volusion. Whether or not those big-ticket enterprise clients are willing to consider it as an alternative remains to be seen, but the new pricing is certainly a step in the right direction — on both sides of the spectrum.