Shopify sees ‘paradigm shift’ as Black Friday approaches

Bloomberg

Shopify Inc expects a banner holiday season as the worsening pandemic encourages more consumers to shop online and buy from the small businesses that sell through its platform.
While the pace of growth will likely slow once the pandemic ends, this year’s gains will
likely hold up, President Harley Finkelstein said in an interview. The company reported a 109% increase in gross merchandise volume, a key metric for online retailer companies, in the third quarter.
“This is not going to go back to the way it was pre-Covid. This has been a paradigm shift,” he said. “I don’t think it’s fleeting.”
With Black Friday still a week away, it’s already clear the next two months will be “really good,” Finkelstein said. The number of orders merchants received rose 17% in the second week of November compared with the first week. The average consumer cart of merchandise sold in the second week of
November was $81, an 18% increase over last year, he said.
Large retailers have been among the biggest beneficiaries of the online shopping boom and will see the most growth in market share this season, according to a report by Adobe Analytics, though small retailers will experience the greater percentage revenue boost.
While more large chains are turning to Shopify, the vast majority of Shopify’s customers are businesses with 500 or fewer employees.
Harley Finkelstein speaks at Startupfest in Montreal in 2019.
Shopify is counting on consumers to choose independent brands for items that aren’t staples. That “conscious consumerism” is getting a boost from the pandemic, Finkelstein said: “Direct to consumer is not a fad.” Almost 40% of shoppers will make a deliberate effort to shop at smaller retailers over the holiday season, according to the Adobe report.
Shopify began in 2004 as a service provider to small companies, helping them build websites to sell to customers directly. As the e-commerce market has expanded, so has its line of tools and services. Today most of its merchants peddle their wares on multiple platforms. Since 2017, merchants have been able to connect to Amazon.com Inc’s marketplace through Shopify.
The Ottawa-based company has also struck partnerships with major platforms including Facebook Inc, Instagram, EBay Inc and TikTok Inc. In June, it announced a deal to get some Shopify merchants on Walmart Inc.’s third-party marketplace.
Shopify helps small retailers build their own websites to sell to customers directly.