MGR eCommerce Edge Weekly | October 28, 2020 | MGR Marketing & Lifestyle Blog

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Is a Shopify Marketplace Coming?

Amazon needs competition, and it’s never been more apparent than during this current crisis. Many have tried from legacy retailers like Walmart, to dozens of upstarts, but the results have been mixed . However, there was always one looming presence who many in the eComm community thought could be the one to achieve the seemingly impossible goal, Shopify. And now that time has finally come (sort of).

Shopify launched it’s new Shop app earlier this year. But, instead of it being a full on marketplace going head to head with Amazon as many had hoped, V1 is instead a shopping assistant to make it easier to buy from stores in the Shopify ecosystem. Rest assured however, as confirmed by one of Shopify’s VPs, this is only V1 and there is much more to come.

What should we expect V2, V3, V4 and beyond to look like down the road? Well let’s start by understanding Amazon’s weaknesses in order to access how a competitor like Shopify could exploit them.

I’ve written in the past on Amazon’s Dwindling Advantage, but to summarize:

• Their tech stack is no longer unique, there are plenty of alternatives to list and sell your products online.
• Amazon is highly restrictive when it comes to customer data, in a world where brands who don’t own their customer data are dying left and right.
• FBA is slowly becoming commoditized. There are countless competing 3PLs (including Shopify itself) popping up to offer affordable fulfillment at scale.
• Amazon does not allow for unique brand experiences. This is a strength in the sense that a customer always knows what they’re going to get when they shop, but it also curtails Amazon’s abilities to enter into the premium and luxury product spaces.

None of this means that Amazon is going anywhere, it will remain the largest eComm platform for many years to come. But what this does mean is there is room for competition from someone who can exploit these gaps, and no one is better positioned than Shopify.

What will Shop look like in the future?

Ideally a decentralized marketplace that allows customers to search and discover products in a similar fashion to Amazon, but willingly sends shoppers to brand’s unique stores and product pages to purchase, and very importantly, allows merchants to own all of their customer’s data.

Add those features on top of the already implemented and improving Shopify Fulfillment Network, in addition to Shop Pay which allows for frictionless one-click payments across all Shopify stores, and you have platform that has a real chance at going head to head with Amazon.