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    Home»Point Of Sale [POH]»Shopify Is Becoming A Force To Be Reckoned With Beyond E-Commerce
    Point Of Sale [POH]

    Shopify Is Becoming A Force To Be Reckoned With Beyond E-Commerce

    yourpostechBy yourpostechFebruary 24, 2023Updated:February 24, 2023No Comments4 Mins Read
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    • Bundling the Shopify POS app within its broader e-commerce plans is a wise strategy that positioned the company well for the post-COVID reopening.
    • Deeply integrating Shopify’s e-commerce solutions into a merchant’s online operations is conducive to merchants adopting Shopify’s POS solutions for offline channels, in order to harmoniously synchronize business operations.
    • The fact that Apple decided to partner with Stripe/Shopify first, as opposed to other key POS players, is a testament to just how successfully Shopify has built its brand image and lucrative merchant base.
    • The high demand for POS Go from large merchants is reflective of Shopify’s ability to innovate relevant POS solutions with valuable features that truly enhance merchants’ ability to conduct commerce.
    • The recent appointment of Kaz Nejatian as COO definitely emboldens Shopify’s POS endeavors, and will likely become a force to be reckoned with.
    Close up of a male"s hand paying bill with credit card contactless payment on smartphone in a cafe, scanning on a card machine. Electronic payment. Banking and technology
    AsiaVision

    Shopify has grown to become a titan in the D2C e-commerce industry, helping merchants go from ‘first sale to full scale’. Over the years, the e-commerce giant has expanded into new territories to solidify its moat, particularly in offline retail. Alongside its digital services, Shopify also offers Point of Sale [POS] solutions to support commerce activities in physical retail stores. The POS solutions have played an important role in sustaining growth post-Covid and enhancing the appeal of the Shopify platform across the merchant community.

    In partnership with Stripe, Shopify has been offering POS hardware devices and software solutions since 2013. The company has two revenue segments, subscription solutions revenue, and merchant solutions revenue. The sale of POS hardware devices (e.g. card readers) contributes to Shopify’s merchant solutions revenue, while recurring subscription fees to its POS software solutions contribute to subscription solutions revenue. Note that the POS software solution, namely the Shopify POS app, is bundled into each of Shopify’s e-commerce plans, and the company strives to upsell successful merchants towards its higher-end POS Pro subscription service, for $89/month per retail location.

    In May 2020, Shopify introduced an all-new, advanced POS solution. Bundling the Shopify POS app within its broader e-commerce plans is a wise strategy that positioned the company well for the post-COVID reopening. Merchants that opened online stores through Shopify during the pandemic would be inclined to also use Shopify’s POS solutions as they expanded operations into offline channels following the economic re-opening, given that it is already part of their subscription plans. Furthermore, the tech giant also strived to replace well-established merchants’ legacy POS providers following the economic re-opening, as Shopify Vice President Harley Finkelstein proclaimed on the Q4 2022 earnings call:

    We also simultaneously during COVID went to work on building the greatest point-of-sale product because we knew at some point, post-COVID stores are going to reopen. And once stores did reopen, we went hard in replacing all of those legacy systems with ours.

    Shopify does not granularly disclose POS sales revenue, but it has indeed been aggressive in encouraging merchants to adopt Shopify POS solutions post-COVID, allowing for GMV growth through the offline channel. In 2022, offline GMV grew by 40%.

    Shopify POS solutions allow for the seamless unification of online and offline retail operations, enabling smoother omnichannel commerce. “Omnichannel is an e-commerce sales strategy that provides a seamless shopping experience for customers between channels.” “Omnichannel allows merchants to sell through multiple channels, like desktops, mobile devices, and in-person stores. Deeply integrating Shopify’s e-commerce solutions into a merchant’s online operations is conducive to merchants also adopting Shopify’s POS solutions for offline channels, in order to harmoniously synchronize business operations for more effective management.

    Apple’s ‘Tap to Pay on iPhone’

    Shopify is becoming a prominent player in the POS industry. In fact, last year Apple (AAPL) launched ‘Tap to Pay on iPhone’, and chose Stripe and Shopify as launch partners, as opposed to other industry giants like Block’s Square (SQ). This is a testament to just how important a player Shopify has become in this space. Stalwart corporations like Apple deciding to partner with Shopify to launch their own new ventures further augments the value of the Shopify brand and the Shopify platform, as it can grant the company first-mover leverage to attract more merchants.

    ‘Tap to Pay on iPhone’ essentially allows people to accept card payments using their iPhones as terminals, through various POS apps like the Shopify POS app and Square POS app. Consequently, Apple’s move is expected to reduce the need for merchants to buy POS hardware devices from their e-commerce and fintech partners. That being said, ‘Tap to Pay on iPhone’ is more likely to be embraced by nascent merchants just starting out on their entrepreneurial journeys, as opposed to larger, well-established businesses with deeply integrated commerce and fintech solutions. Despite the onset of ‘Tap to Pay on iPhone’, Shopify is witnessing early signs of success with its latest POS hardware device, Shopify POS Go.

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