Shopify is opening up. A series of updates announced at its Unite developer conference on Tuesday will let app and feature developers into more areas of the e-commerce platform, and give merchants greater control over their digital storefronts. Here’s what you need to know.
Check this out: Shopify has long entertained outside toolmakers, launching its app store and APIs for third-party developers in June 2009. Such partners made US$12.5 billion in 2020, per the company’s estimates. But one important segment of the platform has remained off limits until now: the final screens shoppers see as they pay up and begin waiting impatiently for their package. On Tuesday, the company announced it’ll let merchants add extensions and other payment services to Shopify Checkout, its default system for completing transactions. (Shopify has previously allowed aesthetic changes). The company is also promising speed and volume improvements to its checkout feature that can handle mass retail events like Black Friday and Cyber Monday.
Money matters: Like most app-store operators, Shopify takes a cut of the fees merchants pay third-party developers to use their tools, currently 20 per cent. The company announced it’ll forgo that share for a partner’s first US$1 million in revenue every year, and charge 15 per cent on the rest. Shopify has already established a separate revenue stream from its ecosystem, starting to sell ads within its app store in February 2020. App-store charges are a sore spot for third-party developers entering other tech giants’ walled gardens—in the consumer world, Basecamp, Spotify and Epic Games have banded together against Apple and Google over their 30 per cent fees.
“The average developer on Shopify is already earning more than the average developer on Apple or Google,” said Fatima Yusuf, director of commercial for the app ecosystem, putting the difference at 1.5 times for the former and four times for the latter.
The best of the rest: Merchants will also be able to customize more parts of their storefronts sans coding; Shopify cited the new Netflix merch shop as an example. Third-party developers like Shogun, which raised a US$35-million Series B in October 2020, have signed up large merchants seeking such control. Shopify is also expanding its hosting, with plans for servers in more than 100 locations worldwide to ensure transactions keep ticking along.
The comparison set: “I’m such a big fan of the internet,” said CEO Tobi Lütke, calling the huge code bases behind the technology built for web browsers “the modern great books [or] wonders of the world.” A “very, very, very large corner of the internet is powered by Shopify, at this point,” he added.
One more thing: The firm is increasingly taking stakes in the companies whose tech backstops some of its services, and investing in some of its most promising app makers. On the sidelines of Unite, San Francisco-based Co-op Commerce announced a US$5.8-million seed round, with cash from Shopify and one of the Canadian firm’s own early investors, Bessemer Venture Partners. Once a shopper is done buying from a store that’s part of Co-op’s program, it displays products from other participating brands. It’s the kind of post-purchase checkout feature the changes Shopify announced at Unite will encourage.