Fourteen years ago, when Shopify president Harley Finkelstein first joined the e-commerce platform, he was the only non-engineer. Now, he said the company powers 10% of all US e-commerce, and its partners include Glossier and Béis Travel—the two brands Finkelstein spoke with for a keynote session about retail disruption of NRF last week. Retail Brew caught up with Finkelstein at the show to discuss highlights from the session and what’s next for Shopify.
This interview has been lightly edited for length and clarity.
You said at the end of the panel “the future of retail is everywhere.” Can you talk more about what you mean by that?
At this point, even the largest retailers are beginning to stop talking about this concept of channel conflict, which, if you go back five years, in the word cloud of [the] earnings call from a lot of the biggest retailers, you hear this two-channel conflict and online is hurting offline and social media commerce is going to really hurt our bottom line in our wholesale business. And that’s over, I don’t think anyone cares about what channel a product is being sold in. But if you think about a really modern brand, like Alo or Vuori, both brands are built on Shopify. And from Day 1, they both have stores, they also have wholesale, they sell on hotel boutiques, they sell on social media…they’re channel agnostic. All they want is to be able to get in front of as many customers as they can, on whatever surface area that is most convenient to that particular consumer.
You mentioned this “Taylor Swift model”—reaching [consumers that are] 8 to 80 years old. Is that something that's realistic for most brands?
It's realistic for brands that are really thoughtful. Glossier does have that, but like GymShark has that too. My nephew wears GymShark, at 12 years old, and my father also wears it. A Taylor Swift model speaks more to longevity, like multi-generational longevity. And it means that it’s not just cool for one type of person. There are other brands, for example, that are new, that are emergent, it’s kind of shocking, but they’ve been able to attain it quickly, like Skims. If you walk into a Skims store—we power their physical and their point of sale, so we spend time in those stores—there are literally 13-year-olds in there and there are 75-year olds…There’s longevity to that. Whereas I think there are other brands where they focus on one particular demographic. So I think that’s where some of the modern brands are doing really well, where they’re able to cross the chasm across generations.
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The record sales Shopify saw on Cyber Monday and Black Friday were crazy numbers. But obviously now’s a weird time in retail, as some consumers are pulling back on spending. What are you seeing for this year?
Good brands did very well. If you think about Black Friday, Cyber Monday, we did about $9.3 billion, and that was up 24% year over year. If you look at the general retail market, it was only at 4% or 5%. So what happened? I think a lot of people bought from the brands that they loved as opposed to brands that they just have lukewarm relationships with. And that’s honestly different from during the pandemic, you saw Ooni pizza ovens did really well. There are a lot of other pizza ovens out there; why did Ooni win? Because it’s a great brand, great education, their content strategy was insanely good. There was a thoughtfulness to it and I think brands that were lazy did not do it. I’m a retail optimist generally because I don’t think that there’s doom and gloom. I think the US consumer in particular is very strong. And how do I know that? Because I see what’s happening on Shopify.
What are you looking forward to for Shopify this year?
Enterprise is a really big thing. I love direct-to-consumer modern brands, like the Glossiers and the Skims and GymSharks and the Allbirds and the Figs. But I really think that we also can make a huge dent in the traditional enterprise market. A bunch of the LVMH brands recently hit Shopify, like Nicholas Kirkwood and Emilio Pucci—there’s so much opportunity for them to innovate there. We’re really known as the entrepreneurship company. But I think in the last 18 months, some of the largest brands—like Staples and Mars and Carrier, the industrial machine equipment company—have also come to Shopify, and actually that’s an area that is super interesting for us. I would love to power Chanel; I think we could create an amazing online experience for Chanel that doesn’t really exist right now. And they could still preserve their incredible upscale experience, but also digital. I don’t think they’re mutually exclusive.