Shopify competes Amazon

  • Apr 19,2024
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Pizza Pilgrims is a popular restaurant with 13 stores in London and Oxford, which “serves slow proved Neapolitan pizza”, that you can try at one of their venues in central London, to take away or to get it delivered to your home. However when the pandemic started in March it made the pizzeria to close all of its stores and from 30 000 pizzas made weekly it went to zero. Almost the whole staff - 270 of 276 people were forced to stop working (they were furloughed).

 

In April they opened one of the stores managing only delivery. But it was still not enough to make up the losts. In an interview the founder Thom Elliot said he wanted to find something that would be in use to the customers, who were continuing to ask and search for the pizza. So finally he and his teammates decided to launch kits with all the raw ingredients needed for a homemade pizza. In order to do that, however, they should have upgraded the restaurant’s website and here came Shopify.

 

Shopify, the Canadian multinational e-commerce company, offers the service of creating an online store and selling products. It is available for everybody - no matter whether it is a store or sole trader, and includes inventory tracking, software helping with sales trends and so on. So this was exactly the thing Thom Elliot’s idea needed.

 

Later on Pizza Pilgrims realised the kits along with the website, which was made for this purpose particularly. And when Mr Elliot posted about it on their Instagram account, the company sold out 50 pizza making kits for the first 25 seconds. Until now, launched in April, the new service Pizza in the Post sold over 25 000 kits. The founder said they noticed that "a lot of families like these kits so everyone can make pizza together during the lockdown". After so much time, the easing of restrictions allowed them to start working again with opening 10 out of 13 restaurants.

 

Because of the lockdown situation, many stores started selling their goods mainly online and this raises the need for their own websites. This turned out to be a profitable time for Shopify. New stores created on the platform were 62% more for the period from March 13th until April 24th than the previous six weeks. The company has become the most profitable Canadian public platform with $1,58bn income only for last year. 

 

Dan Wang, Columbia University’s associate professor of management, says that the company is not very popular among people even though it has been here since 2004. He adds: "They saw the trend of selling directly to small businesses before most, at a time when Amazon and other big players were taking centre stage." According to him the moves it has recently made, will in future elevate its position in the sector of e-commerce. One of the steps up is the partnership with the US multinational corporation Walmart, due to which some of the Shopify’s sellers will be promoted in Walmart’s marketplace. 

 

Based on the chief operating officer, Harley Finkelstein, announcement, the company is the biggest online retailer just after Amazon if we take under account the US-based merchants and “pretend for a moment these stores are one single retailer”. He added: "Technology has levelled the playing field so you don't need to have a lot of money to build a brand that is the envy of hegemonic corporate giants, and the cool part of it is that consumers vote with their wallets and prefer to buy from local merchants”. 

 

On the other hand, Amazon has also had an increase in the first quarter of the year, its sales are estimated to $75,4bn, which is 26% more. However, Shopify is affirming itself as one of the main competitors to the world’s biggest retailer. The Canadian company is going to release its own delivery network and warehouse system in order to help vendors to deliver their goods reliably and quickly to the customers, this is actually not a surprise for most of the analytics, as it is a reasonable move. To make it real, last year they bought 6 River Systems, a company specialised in robotics and software for warehousing and delivery.