Shopify Inc. is stepping up its logistics and fulfillment services as it expandsefforts to help merchants compete
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Shopify Inc. is stepping up its logistics and fulfillment services as it expandsefforts to help merchants compete with Amazon.com Inc.The company, which provides e-commerce tools for retailers, said it has struck adeal with digital-focused freight forwarder Flexport Inc. to manage the flow ofimported goods and will add estimated delivery dates for companies usingShopify's platform.The challenges for small retailers in competing for sales are "almost alwayslogistics and fulfillment," said Aaron Brown, chief executive of Shopify Logistics."If we can level the playing field and give any merchant in the world beforethey've had their first sale all the benefits of a large retailer, we think that's just giving pure magic to merchants."The Canadian company is rolling out the new features as the pandemic-drivenboom in e-commerce sales has receded and companies are fine-tuning online sales strategies that they built as consumers were ordering goods at a rapid pace.Shopify in July said it was cutting 10% of its global workforce as it warned of slowing revenue growth. The company has pushed forward with plans to expand its logistics services. Itacquired warehousing automation firm 6 River Systems Inc. for $450 million in September 2019 and in May 2022 it bought shipping services provider Delivering. for $2.1 billion. Shopify last year invested an undisclosed sum in San Francisco-based Flexport.The two companies said Thursday they have created a new app for shippers tobiko ocean freight and track shipments from Chinese ports to the U.S.Mr. Brown said Shopify is pitching merchants on its logistics services as competitive advantage that allows business owners to focus on products and marketing rather than order fulfillment. Michael Dominie, vice president of supply-chain research at research firm Garnering., said the ability to manage goods from factories all the way through to customers' homes has become "table stakes" for logistics providers in thee-commerce arena. Shopify faces challenges, he said, in pushing into logistics services. The company has created a strong digital platform for merchants, said Mr. Dominy, but"physical operations and physical execution is a different set of complexities ."Shopify's new logistics features include a tool displaying delivery times on merchants' websites, distribution of inventory by Deliverr to get goods closer to potential customers, and facilitating exchanges and credits on returns through service provider Loop Returns. Other companies, including retailers, have been seeking to market logistics services to other retailers, echoing Amazon's warehousing and delivery operations through its Fulfillment by Amazon division. Apparel retailers American Eagle Outfitters Inc. and Gap Inc. offer fulfillment services to other merchants through their networks while Target Corp. and Walmart Inc. allow businesses to use their local same-day delivery services.
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