Shopify setting up warehouses to help merchants with deliveries


The Ottawa-based tech giant will use artificial intelligence to forecast how much of a particular product its merchants will need to stock in its fulfillment centres. It is working with logistics providers and tech firms in Nevada, California, Texas, Georgia, New Jersey, Ohio and Pennsylvania on the Shopify Fulfillment Network, but did not say when the facilities will open. “We should be able to deliver to 99 per cent of [the] continental U.S.A. within two days or less,” said Craig Miller, chief product officer, at the firm’s Unite developer conference in Toronto. (Globe and Mail, Wall Street Journal)

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Talking point: Shopify’s expansion into logistics helps its merchants compete with Amazon, which was the first major e-commerce platform to offer 48-hour delivery in 2005 as part of its Prime membership service. Retailers like Walmart, Target and have only matched that service in the last two years, and they typically require a minimum order or participation in a loyalty program to access it. But rapid delivery may prove more challenging for Shopify than those other firms. Shoppers don’t browse and place orders on a centralized Shopify site; instead, its 850,000 merchants have their own online storefronts. That suggests the company likely won’t be able to sell a membership to cover some of the costs of rapid shipping, or pool items from multiple brands into a single package to a single customer.