Dan Partridge, CEO of leading eCommerce agency Swanky, shares how challenging macroeconomic conditions are leading enterprise brands to explore a new generation of eCommerce solutions.
For the last decade, Shopify has been the eCommerce platform of choice for many small and medium-sized businesses. A highly-scalable platform with an incredibly low barrier to entry, it is widely considered the go-to solution for direct-to-consumer (D2C) brands with a GMV of $10m or less.
Its popularity amongst SMBs only accelerated during the Covid-19 pandemic, as more brands than ever before sought to diversify their sales channels with a quick-launch direct-to-consumer offering.
Equally important, though, is Shopify’s recent growth in the enterprise market. Shopify Plus, built specifically for enterprise brands, has quickly gained market share amongst larger eCommerce brands, supported by its rapid deployment of new features and functionality.
TechCrunch reports that 10,000 enterprise brands have already migrated to a new eCommerce platform this year. Almost 40% have re-platformed to Shopify Plus. This makes the enterprise market the fastest-growing segment of Shopify’s user base.
The great Shopify Plus misconception
Gartner has recognised Shopify Plus as a serious contender in the enterprise eCommerce platform space. The analyst company has identified Shopify Plus as having the highest “ability to execute” compared to other enterprise solutions. It edges ever closer to leader status in Gartner’s most recent “Magic Quadrant”. This is despite the accreditation taking place before the deployment of most of the Shopify Plus 2022 roadmap.
However, in certain quarters of the eCommerce marketplace, there remains some scepticism about Shopify’s ability to serve enterprise brands. For example, in a state-of-eCommerce report by headless commerce platform Elastic Path, the author suggests that Shopify has had “little success” in trying to “punch up” into the mid-market of brands transacting $10m to $250m in annual GMV.
The reality, at least in our experience at Swanky, is rather different. British brands like Huel and Gymshark have scaled rapidly to GMV of £100m and £400m, respectively, powered throughout by Shopify Plus. As a result, they have become the poster children of the direct-to-consumer generation. Shopify is emphatically ‘punching up’ into the mid-market. They are achieving this simply by the virtue of underpinning many of the fastest-growing consumer brands on the planet.
Less appreciated, though, is the extent to which Shopify Plus is increasingly ‘punching up’ into mid-market and enterprise through larger brands migrating to the platform. The likes of Mars and PepsiCo are architecting brand portfolio-wide digital commerce strategies using Shopify. It’s clear that enterprise brands are well aware of the opportunity to leverage more flexible, cloud-native solutions that facilitate faster scaling and significantly reduced overheads.
For every Allbirds or HelloFresh that have benefited from Shopify’s versatility, a traditional market leader is doing exactly the same, whether it’s Heinz or Wilkinson Sword.
Why economic headwinds are accelerating the growth of Shopify Plus
As macroeconomic conditions worsen, digital leaders face numerous difficult decisions. Some brands will be looking to reduce overhead and minimise marketing spend. Others will seek to capitalise on difficult trading conditions by intensifying their activities and rapidly growing market share.
Both scenarios serve to accelerate the growth of Shopify Plus.
Increased economic headwinds force nervous digital leaders to reevaluate their tech stack and overheads. Many brands are currently served by expensive legacy technology, hefty annual renewal fees and large development teams. Accordingly, there is a powerful economic driver for transitioning to a scalable cloud-native solution like Shopify Plus. CTOs and eCommerce Directors who can recover re-platforming costs from the next 12 months’ operating expenditure can make a compelling business case for the move.
Going Global
On the other hand, brands in more recession-proof verticals (or with large war chests) know that economic headwinds create a unique opportunity to rapidly outgrow the wider market. For example, we’re speaking to more brands who are looking to accelerate an international roll-out to a new market. Typically, for European brands, this is to the US, but it is increasingly vice versa. The versatility and scalability of native internationalisation solutions like Shopify Markets enables this to happen faster than was traditionally the case.
In both scenarios, the quality and scalability of Shopify Plus’ core product (and wider app and partner ecosystem) give great confidence to the decision. International brand groups with multiple stores in multiple regions, complex ERPs and omnichannel retail strategies can rapidly re-platform with confidence. This is true whether they’re doing so to dominate the market or tighten the purse strings.
As recently as 2020, the enterprise eCommerce marketplace seemed clearly defined. Today, the picture is much more nuanced, and the rise of Shopify Plus is a big reason for that evolution. The rules of engagement are rapidly changing, and everything is up for grabs.
Many of the ideas in this article originally appeared in an article published by Swanky titled “Economic Headwinds, Digital Transformation and the Acceleration of Shopify Plus”.
Swanky is a leading international ecommerce agency, headquartered in the UK with offices in France and Australia. They design, build and grow best-in-class Shopify Plus websites, with more than a decade of experience executing complex and exciting projects at the cutting-edge of ecommerce solutioning. Their team of award-winning specialists deliver a range of services to maximise growth and revenue for clients, including migrations, web design, bespoke development, optimisation, subscriptions and digital marketing.
