Shopify Updates: Platform Enhancements & New Tools for 2020

In May 2020, Shopify announced the launch of new finance, retail, and shipping updates for its direct-to-consumer platform in aims to support sellers. The company unveiled the introduction of several new features at the Shopify Reunite virtual event, including a new business account, the Shopify Balance debit card, new Shop Pay Instalments feature, and a new Local Delivery product. Additionally, the company has also announced that the anticipated AI-based fulfilment network is now accepting applications from merchants. So, how will merchants be affected by the new changes?

The latest developments from Shopify

The biggest news in the announcement from Shopify is that the company wants to offer merchants financial products to start, develop and grow a business. While the company does not intend to introduce a banking service, nor has it provided a specific initiative or launch date, there is interest in entering the fintech space. Shopify has shared that the goal of this initiative is to create support for independent business owners.

Shopify Balance

Expected to be initially launched in the U.S. later this year, the new Shopify Balance service will enable merchants to separate personal and business finances. This will include new merchant accounts with no fees or minimum balances, in addition to offering merchants immediate access to their money instead of the current timeframe of days. Shopify has stated that this will not include any monthly fees.

Shopify Balance will be comprised of an account, with an included card and rewards. The debit card will allow access to money in-store, online, or via mobile. Business owners will also be able to add their own company branding to each card, and discounts are expected to be offered as cashback or discounts on business spending such as shipping or marketing.

In the admin section, merchants will be able to track cash flow, make payments for bills and track other expenses.  An unknown third-party is partnering with the company to handle transactions, which will be announced when Shopify Balance is launched.

New Shop Pay with Instalments

The launch of new updates also includes improvements for consumers. The new Shop Pay Instalments feature will become available to U.S. merchants later this year, enabling consumers to split purchases into four equal payments, with no interest-fees or any additional payments. Merchants would receive the full-price payment immediately, while consumers can pay that amount in instalments.

The company has argued that flexible payments will create more palatable offers for consumers, noting that merchants should see an increase in average order sizes.

Local Shipping

Shopify has shared that the COVID-19 pandemic has boosted local shipping. The average daily local orders on the platform have grown by 176% in the six weeks leading to April 24. In that timeframe, 26% of brick-and-mortar merchants in English-speaking territories have opted for local pickup and delivery, compared to only 2% at the end of February.

Local delivery is also launching on a global scale. Merchants can define local delivery areas using a distance radius or postcodes, establish minimum order prices, and set delivery fees. Orders are fulfilled through Shopify, Shopify POS, and Shopify Mobile. There is even the additional option of allowing merchants to act as their own delivery person or have a member of staff delivery packages.  Shopify has stated its aim to expand the selection of local businesses on its platform, including businesses such as grocers, restaurants and butchers, which are not traditionally direct-to-consumer.

The Shopify Fulfilment Network

Last year, the company event debuted the Shopify Fulfilment Network (SFN) offering two-day shipping. Select merchants in the United States could apply to join the network, which uses machine learning to predict demand, inventory allocation, and route orders to the close fulfilment centre. This year, SFN has expanded its early-stage launch and is actively accepting merchant applications.

Shopify is expected to continue modifying and improving its newest launched features, in addition to providing new options for merchants seeking to establish DTC strategy. For more information about Shopify changes and how it can impact your business, establishing a direct-to-consumer strategy, and any e-commerce queries, don’t hesitate to contact our team of specialists.