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...

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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
iggest 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
oader platforms, including
online marketplaces like Amazon, social
media channels like lnstagram Stories,
and even
ick­and-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
etter 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
y 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.'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 to buy
a mattress. every interaction take place with Leesa, the company
and. Customers
owsing 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
ands sell on Amazon-whether fulfilled by Amazon or by the
third-party vendors-customers are buying from Amazon, and
ands themselves gain little by way of
and 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
and 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
ands 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
ands that compete directly against its sellers'
ands. 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 Fo
es 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,, was powered by Shopify. Less than one year
after joining Shopify,
Answered 2 days AfterApr 06, 2022


Deblina answered on Apr 08 2022
10 Votes
Shopify: Case Study Analysis         2
Table of Contents
Response to the Questions    3
Question 1    3
Question 2    3
Question 3    4
Question 4    4
References    5
Response to the Questions
Question 1
Business markets refer to the organization and the business entities that acquire they are products and services for the use of the production of other products or services. This particular service includes the supply of goods or selling or renting of products that are made for another particular service. On the other hand, the consumer market represents where the business or the producers sell their products and services directly to the consumers. The demand in this particular market is made by the consumers directly. However, it must be noted that the demand or the nature of the business market has a direct dependency on the demand relative to the consumer market structure. A very relevant aspect in terms of the market structure can be ascertained from the marketing perspective and consumer behaviour.
The business market is always segmented in the street that...

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