Shopify Q1 Earnings & Layoff Implications

The TL;DR:

• Let’s Chat D2C: Shopify Q1 2023 Earnings & Layoff Implications

• What I’m Thinking about this Week: Hiring Sucks and Finding a Job is Rife with Inefficiencies

• The D2Z Podcast: This week, I sat down with Drew Owen, SR. Global BD Manager | PE & VC at Shopify

• App Highlight - Hotjar: Website heatmap and behavior analytics tool

• Upcoming Events: Retain Forward with Yotpo

Random tip: Show the expected delivery date/shipping speed on your product page and checkout process.

Let's Chat D2C: Shopify Q1 2023 Earnings & Layoff Implications
 

It feels like just yesterday when Shopify laid off 10% of its workforce in July. Less than a year later, they’re laying off an additional 20% of staff and getting out of the logistics game, selling Shopify Logistics to Flexport a year after they acquired Deliverr for more than $2B

First and foremost, it’s sad to hear about the layoffs, and my heart goes out to all of the Shopify team members impacted. I’ll miss those I’ve worked closely with over the past few years and am grateful for the time we had together. For any of those impacted who’d like to be highlighted in the following newsletter for job opportunities, please reach out 

Main Quest vs. Side Quests

It’s pretty easy to argue that Shopify got too big, too fast, and distracted from its core mission. Its manager-to-contributor ratio got out of whack, stifling innovation and product development, coupled with a big bet on logistics that seemed to make a lot of sense. After all, logistics infrastructure is one of the biggest challenges that face ecommerce businesses, especially as they scale, and Amazon’s FBA makes fulfillment seamless for brands. But, in their own words, Shopify Logistics wasn’t their main quest, and finding a home for it at a company where it is their main quest made the most sense.

With the deal, Shopify will receive stock worth 13% equity interest in Fexport, and Deliverr CEO Harish Abbott will oversee the transition. Shop Promise, something I was super excited about from their Winter ‘23 Editions release, will now be taken over by Flexport. Merchants will still be able to display expected delivery dates and showcase fast and free shipping, comparable to the shopping experience on Amazon (and ultimately increasing conversion rates).

Shopify Plus

Shopify continues to make inroads upmarket, growing 35% YOY and adding $34M in net-new ARR. Shopify’s product continues to get more robust while merchants seek to reduce their total cost of ownership and simplify their tech stack. It’s a perfect storm to continue to fuel their growth upmarket, and this doesn’t include Commerce Components

Shopify & AI

Shopify has already released two AI products, one to support customers and one to support merchants:

• AI shopping assistant on the Shop app (customers)

• Shopify Magic: AI-generated product descriptions (merchants)

The AI shopping assistant provides a more personalized shopping experience for consumers on the Shop App, while Shopify Magic autogenerates product descriptions for merchants.

Tobi’s focus is apparent in his letter, stating, “A copilot for entrepreneurship is now possible.” I expect significant product updates and releases powered by AI that will assist merchants in their entrepreneurial journey. Shopify Magic is great, but it’s more of a gimmick than something that materially changes the day-to-day of an ecommerce operator.

My Overall Take

Shopify is shedding all distractions and leveraging AI to accomplish its main quest, making commerce “simpler, easier, more democratized, more participatory, and more common.”

I’m looking forward to the day when I can build an entirely custom Shopify website based on the prompts I enter into the system

There still isn’t a better platform to build on than Shopify, and it’s not even close.

What I’m Thinking About This Week: Hiring Sucks and Finding a Job is Rife with Inefficiencies

If you’ve ever tried to scale a company, you know how challenging finding and hiring talent is. If you’ve ever looked for a job, you know how much time and effort is wasted trying to find the right fit.

18 months ago, my brother and I began building a product to address this problem out of our frustrations with the tools in the market. Today, I’m excited to announce we’re ready to start talking about it!

The Core Problem

Applicant tracking systems (ATS) and job boards are seen as two separate products, eliminating incredible potential synergies, leading to disparate systems not talking to each other and a quantity-over-quality approach to sourcing and recruiting talent. Meanwhile, job seekers apply to hundreds of jobs to try and cut through the noise.

Leveraging AI

By building a fully integrated ATS and job board product, we can leverage the data from the applicant tracking system to give our machine learning algorithm what it needs to provide hyper-relevant recommendations and matching on the job board. Think if Lever (ATS) and Indeed (job board) had a baby.

SCALIS

We are introducing SCALIS, a next–generation fully integrated ATS and Job Board platform powered by AI that rolls up a series of HR recruiting technologies. We provide companies with a more affordable and streamlined way to recruit and hire talent while empowering job seekers to find relevant positions faster.

Limited Access

We’re seeking a handful of early adopters (<500 employee companies) to join our BETA. If you haven’t used an ATS for your business before, or are looking for a better solution than your current setup, contact me.

This Week’s The D2Z Podcast

#59 – Shopify, Ecommerce Partnerships, and Retention Strategies

🎧 Listen Now 🎧

In this week’s episode, I sat down with Drew Owen, Sr. Global BD Manager | PE & VC at Shopify. Specifically, we explored the following:

💰 How Shopify seeks partnerships, such as DRINKS, to open up access to new industries

📲 Building a platform that supports merchants' current needs while prioritizing long-term initiatives

😎 The importance of a retention strategy in the face of high acquisition costs and choosing the right tech partners to support you

🚀Macro trends in the Shopify ecosystem, the alcohol industry on Shopify, and the significance of content for brands

App Highlight - Hotjar

❓ What is It: Website heatmap and behavior analytics tool.

🏅 Differentiator: Hotjar’s product experience insights software is designed to give you a comprehensive view of user behavior and the actionable insights you need to improve your overall user experience.

💰 Starting Price: Starts at $0/month for up to 35 daily sessions.

🚀 How we use it: Sure, there are best practices we think should be implemented on most storefronts, but we always want to test our assumptions. Hotjar allows us to view how website visitors interact with our site, uncovering bottlenecks to purchase while gathering direct feedback from customers to implement.

Sign up for free here!

Upcoming Events

Retain Forward

📅 Date: May 10, 2023

⏰ 9am PDT | 12 pm EDT

Learn the latest product innovations built to drive stronger retention and hear from top eComm brands, including DIME Beauty, Dr. Squatch, Aviator Nation, and more!

RSVP Here!AMA

AMA

📅 Date: May 25, 2023

⏰ 1130 am PDT | 230 pm EDT

I’m hosting my monthly AMA on May 25th! Submit your questions ahead of time with this form

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