Shopify The Gorilla 🦍

I’ve been thinking a lot about Shopify moving into the enterprise space. To me, they are becoming a serious beast. And this growth poses a bunch of interesting questions. To be honest, I could tackle each of these in their own post (which I might at some point). But for the moment, let’s break it down…

First off, why? I’m not privy to Shopify boardroom discussions and to be honest, I’m not a SaaS platform strategy specialist. However, it seems pretty obvious to me. They dominate the start-up and SMB platform sector, and sure they’ve made some horizontal M&A moves into supply chain but they need a new carcass to feed off. And according to TechNavio the enterprise eCommerce market is worth $5.6 trillion USD, so getting some of that enterprise pie seems logical.

But is it real or just marketing fluff? Will a brand generating $500m in GMV transition its entire stack into the Shopify ecosystem? Probably not. But if Shopify can entice even a couple of massive brands (e.g. Mattel) then it serves as the foundation of an enterprise brand growth flywheel. What’s more, if it can place even a small amount of doubt into big mid-market or upper mid-market brands (Gymashark et al) from moving away into MACH land or elsewhere, then job done.

Business case and marketing fluff aside, another interesting discussion to sprout as a result of their move into enterprise is the question of identity. How can Shopify arm the rebels like HunkyBill but provide ammunition to the $500m Goliaths? It's blasphemous! But other tech companies have done it. Salesforce, Atlassian, Microsoft, AWS, Hubspot, Slack etc all have Start Up, SMB and Enterprise clients. So why is Shopify any different? As a Shopify romantic, I get it. I liked it in circa 2016 when it was a community of outsiders and only powered cool D2C innovators with sick branding. But we’re living in different times. Those glory days of D2C are behind us.

So if it makes business sense and Shopify OGs can stomach this new paradigm, what are the opportunities?

From an agency perspective, there are a few interesting moves that may play out. First, as Shopify moves upstream it will naturally elevate SMB agencies into the mid and upper-mid-market. This is cool for them, so long as they have the internal infrastructure (legal, operations, team) to weather the procurement process storm of handling such clients. At the same time, bigger agencies will likely pivot away from platforms like Magento, SFCC and Hybris to Shopify. Of course, this means more competition. Which I agree will be challenging. But this new paradigm of Shopify offers the current community a new array of potential niches; B2B Shopify Only, Headless Shopify Only etc.

From a platform perspective, whilst Commerce Tools (backed up by the Mach Alliance gang) and Shopify duke it out in the technology cage, I think opportunities for newer players to take some of their lunch are possible (see Commerce Layer and Centra). Not easy. But possible. I also see an opportunity for a new Mach Alliance competitor. Who represents the brands that aren’t big enough, and potentially a little too cool, for Mach? Shopify? Or could a new alliance of smaller platforms and vendors combine? The Headless Club is a good visual example of this.

So whilst it’s interesting to explore the rationale behind Shopify’s move into the enterprise space and the impact it has on the community, I think the bigger question is - who can stop the Gorilla?