Please answer the questions on case page 2
Shopify Case page 1 Company Case Shopify: An E-commerce Giant That Doesn't Sell to End Users What do Budweiser, Tesla, The New York Times, Bombas Socks, and Kylie Cosmetics have in common? Each company sells direct-to-consumer (OTC) merchandise primarily online. But more, each has an online store created, managed, and powered by Shopify-the biggest e-commerce company that most people have never heard of. In the age of OTC companies. Shopify is behind-the- scenes business that takes care of everything for anyone wanting to sell something online-a genuine end-to-end commerce platform for everyone from the young entrepreneur who has never started a company lo large, well-known--corpora tions needing an online store. The concept is simple. For a monthly fee, Shopify helps individuals or corporations sell their merchandise online. It supplies everything merchants need to go online, including customizable store templates, inventory management systems, analytics, payment processing, and shipping. Shopify also provides consultative services and a network of partners to handle manufacturing, promotion, and order fulfillment. Shopify's platform not only sells merchandise directly from the merchant's online store or mobile app, it plugs into a growing number of broader platforms, including online marketplaces like Amazon, social media channels like lnstagram Stories, and even brickand-mortar locations. The system is completely cloud-based, which means zero investment in hardware and software. It also means that business owners can manage things from anywhere on any device with an internet connection. In short, Shopify's mission is to make e-commerce easier and better for everyone. Although that mission seems a bit lofty, Shopify is well on its way. In 2015, the nearly 10-year-old company went public at a value of $1.3 billion. The preceding year, Shopify's 140,000 stores had sold more than $3. 7 billion worth of merchandise. And Shopify has been lauded by experts and organizations the world over for its growth and impact, including being named as one of the world's most innovative companies by Fast Company this year. How has Shopify come so far so fast yet remain relatively unknown to the average consumer? From Snowboards to Startups It all started in the early 2000s in Ottawa, Quebec, when Tobi Lutke and Scott Lake met and bonded over their love of technol ogy and snowboarding. The pair joined forces to open Snowdevil, an onhne store selling high-end snowboards. Building the site proved to be an exercise in frustration. Working with popular software options of the day, such as Microsoft Commerce and Yahoo! Stores, was difficult and expensive. So Lutke-who Shopify Case page 2 had dropped out of high school at the age of 17 to work as a programming apprentice at Siemens-decided to build his own e-commerce platform from scratch. He came up with something much simpler, faster. and more visually pleasing than anything from existing web design vendors. Snowdevil.com's sales were meager at best. But Lutke and Lake quickly realized that the most valuable entity they possessed was the platform beneath Snowdevil. So in 2006 they launched Shopify as a platform for creating online stores. The going was slow at first, but as they continued to improve the platform with innovative tools, the client base grew steadily. Shopify also de veloped a corporate culture based on authenticity, free thinking, and what the company calls the "trust battery"-a perceptual gauge of an individual's potential based less on what they've already done and more on what they might do in the future. The Anti-Amazon Building the Shopify e-commerce platform required carefully defining what that platform is. But key to Shopify's strategy is also to define what the platform is not. In short, Shopify is not a marketplace. Although Shopify sets up and runs e-commerce operations for DTC companies, it operates in the shadows, siiently and invisibly. So when customers visit Leesa.com to buy a mattress. every interaction take place with Leesa, the company and brand. Customers browsing for temporary tattoos at Tattly. com know only that they are experiencing a selection of creative, high-quality temporary tattoos exclusive to Tattly. When OTC brands sell on Amazon-whether fulfilled by Amazon or by the third-party vendors-customers are buying from Amazon, and the brands themselves gain little by way of brand equity. But visitors to the e-commerce stores powered by Shopify typically have no idea that Shopify even exists, let alone that it's the com pany behind the engine that drives their interactions. The DTC brand itself stands out, not the platform. Shopify thinks of itself as the anti-Amazon, not because t is against the e-commerce giant but because it offers OTC companies a path to selling their goods that is so different in concept and outcome. Although Amazon takes care of ev erything down to operations and fulfillment, vendors don't so much build their own brands as they do Amazon's. As Amazon has grown, more sellers have complained openly that they have little control over their sales, customer rela tions, and the data generated from shopping. In many cases, controlling those assets has allowed Amazon to develop private-label brands that compete directly against its sellers' brands. With Shopify, the merchant, not the marketplace, owns access to the end user. Being a non-marketplace e-commerce platform gives Shopify a unique competitive advantage: Shopify is neutral. It interfaces with and even plugs into numerous existing marketplaces but doesn't favor any. And short of monitoring to prevent illegal activity on the part of vendors, Shopify does not interfere in their busi nesses. This neutrality has allowed Shopify to easily interface with the likes of Pinterest, lnstagram, Facebook, Amazon, and numer ous other companies that feature their own marketplaces. Thus, Shopify clients have access to any and all partner marketplaces. A Big Boost from Lipstick Since going public, Shopify's growth has accelerated. The com pany got its biggest publicity lift in August 2018, when the cover of Forbes featured Kylie Jenner in a black business suit with the headline "America's Women Billionaires." The cover story described how Jenner would become the youngest-ever self made billionaire at age 21 by leveraging her fame into a cosmetics empire. More important, the article noted that Jenner's online store, kyliecosmet1cs.com, was powered by Shopify. Less than one year after joining Shopify,