Shopify Inc. SHOP-T is launching a new initiative to connect digital content creators with merchants, brands and businesses on the company’s platform in a bid to find novel avenues of growth amid a slowdown in e-commerce.
The tool, dubbed Shopify Collabs, is a strategic move that aims to broaden the technology company’s services after it reduced around 10 per cent of its global work force in order to address challenges posed by its weakening financial results and a broad-based stock selloff in the tech sector. In a memo to staff late last month, chief executive Tobias Lutke said he miscalculated how far e-commerce would grow based on figures from the early days of the pandemic and hired too many people in order to meet that expected demand.
Ahead of the launch for this new sales and marketing channel on Tuesday, Shopify told The Globe and Mail that it believes online creators are the next generation of entrepreneurs and are trusted by audiences who turn to them for product recommendations or insights about brands. It’s why Shopify hopes to become the “creator’s commerce platform of choice.”
“Collabs is a new way to find potential customers at a time when it’s never been more difficult or expensive,” said Amir Kabbara, director of product at Shopify. “By giving merchants the ability to discover and partner with creators that align with their brand, they can tap into the power of community-driven commerce to reach consumers in new and meaningful ways.”
Online creators are a budding class of independent businesses that are built by content curators, influencers, bloggers, videographers and others who rely on platforms such as YouTube, Instagram, TikTok, Twitch, Snapchat, OnlyFans and Substack to earn their revenue.
As the reach for online platforms has grown in recent years, so, too, has the size of the audience in what is often called the “creator economy.” Some platforms such as TikTok, Facebook and YouTube have set up funding mechanisms that allow creators to receive money from these social-media companies if they are able to hit certain milestones and engagement metrics.
However, many content creators struggle to gain independence from these platforms and make money, Shopify said, which estimates that just 4 per cent of global creators are able to produce content full time. “With Shopify Collabs, we’re making it simple for creators to discover and partner with these brands so they can make more money and reach economic independence,” Mr. Kabbara said.
In this way, Shopify is hoping to further open up another avenue of revenue, while continuing to establish its presence on social-media websites, so that the e-commerce company can help vendors and merchants meet customers where they are most commonly spending their time online or feel more comfortable shopping for products.
In late June, Shopify unveiled a variety of partnerships with platforms such as Google and Twitter before launching another partnership with YouTube the following month. It had also partnered with TikTok, Facebook, Instagram and Pinterest in the past two years. So far, orders placed through such partner integrations at Shopify have increased in the first two quarters of the year, the company has reported.
During a conference call last month to discuss the company’s second-quarter earnings, which revealed a massive loss and warned of more losses ahead for the technology provider, Shopify executives said they believe becoming accessible anywhere online is key to the company’s growth. “We believe the future of retail is retail everywhere,” Harley Finkelstein, Shopify’s president, told analysts on the call.
“When you come to Shopify, what we are doing is we’re future-proofing your business so that no matter where the additional increase in retail is coming from, where the momentum is, you can do so directly from Shopify,” Mr. Finkelstein said, hinting at e-commerce tools such as the new Collabs initiative as part of the company’s long-term strategy.
Through Collabs, creators who sign up will be able to browse and select Shopify merchants that align with their own brand and identity. Once they find a merchant they are interested in partnering with, creators can apply through Shopify’s portal to begin their business relationship.
Creators can also use Linkpop, Shopify’s free link-in-bio tool, that will allow them to launch a social media storefront and get paid by sharing or promoting a merchant’s products on the online platforms they use to engage with their audiences. The pay structure for each partnership can be altered by merchants, and creators can receive their funds directly through a PayPal account.
The initiative will be available in the United States and Canada this week. But in the future, Collabs will be “fully integrated with Shopify, giving creators access to more parts of our platform and accelerating their journey as entrepreneurs,” Mr. Kabbara said.
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Temur Durrani