On Thursday, Shopify announced the launch of a point-of-sale device that will integrate fully with the company's flagship e-commerce platform. "This new piece of hardware demonstrates our commitment to in-person selling," a Shopify PR person said via email. There was no mincing of words about what this means; according to the company, this bold move "should make Square a little scared." That statement was followed by a winking emoticon.
Jack, consider yourself put on notice. Adorably!
Shopify is one of the few ascendent non-Amazon e-commerce companies, in an industry where "non-Amazon" is almost an afterthought. The SaaS company is able to play in the big leagues, along with competitors like BigCommerce, Magento, WooCommerce, and even Etsy, because aggregating tons and tons of small-scale independent merchants can add up to significant volume. Shopify and BigCommerce do both offer native Amazon integrations.
"Our product philosophy has always been to provide what most merchants need most of the time, and really rely on our partners and our ecosystem for everything else," VP of product Satish Kanwar explained to Inc. "Over the years of POS growing [since 2013], it became obvious that the credit-card reader was something that everyone needed, all of the time, to get started in retail." The new device will have no up-front cost, and is available exclusively to users who process transactions through Shopify Payments.
Shopify has long offered a POS mobile app for cell phones and tablets, as well as integrations with hardware licensed from third parties. But this is the company's first foray into a fully custom-designed device. In 2016, the pre-existing version of Shopify POS was used by roughly 65,000 of Shopify's 400,000 merchants. The new device's design bears a striking resemblance to an Apple product, both aesthetically and in terms of ease-of-use. Shopify has also followed Apple's strategy of differentiating the hardware by bundling it together with exclusive software.
The POS device announcement comes at a time when traditional retail is increasingly in jeopardy, at the expense of expanding ecommerce. "What's happening in big-box retail is because they haven't been able to keep up with customer demands," Kanwar said. "They haven't been able to give that flexibility [that consumers want], and they've over-invested in a single channel of distribution."
By contrast, Shopify envisions a future in which "retail" and "ecommerce" aren't separate endeavors at all. "Looking forward, all small businesses are thinking multi-channel first. If someone is opening a store, whether online or retail, they're fundamentally thinking about the combined strategy," Kanwar said. "If I'm opening a retail store, I'm naturally now thinking about how I'm going to be promoting those products online. And if I'm opening an online store, I'm thinking about how I'm going to expand my business over time."
He added, "We most certainly do see, and are excited to invite, businesses that are starting retail-first, because we believe they need an online strategy at the same time. And what Shopify does is give them both out of the box."
Kanwar pointed out that using Shopify for everything is more efficient on the merchant's end. "When you go all-in on using Shopify for your business, you're both able to quickly expand your channels to grow your sales -- like now I want to start listing on Amazon, and publish to Facebook, and I can go take my phone and sell at a market -- and then it equally simplifies your back office. All that information goes into one set of reports, one set of inventory management, one connection to QuickBooks."
Challenging Square and other POS providers on their home turf will be a challenge for Shopify. The company has a strong presence among online sellers, but its ability to offer an in-person solution has flown under the radar. Thursday's move, which Kanwar said was a year in the making, indicates that the company is determined to change that.