Guest: Bobby Morrison — Chief Revenue Officer, Shopify
Host: Alex, Founder of The Retail Podcast & RetailNews.AI
What we cover
- 00:00 Complexity vs. simplicity: 10 trn data queries, 1.1 trn edge requests
- 02:17 The modern Shopify stack (e‑com, wholesale, retail POS)
- 07:05 AI‑driven search and why affiliates are back
- 10:31 Perplexity, edge commerce & the future of discovery
- 12:20 From entrepreneur DNA to 50 %+ enterprise revenue
- 15:09 Cutting “keep‑the‑lights‑on” teams by 70 % after migrating
- 18:36 Partner ecosystems: agencies → GSIs → SIs
- 21:04 Sidekick AI: your built‑in growth analyst
- 23:30 Inside founder‑led culture at scale
- 27:49 Global retail tour & where to meet Bobby next
Links & resources
- Shopify Sidekick ➜ https://www.shopify.com/sidekick
- Partner program overview ➜ https://www.shopify.com/partners
- Black Friday/Cyber Monday data 2024 ➜ https://news.shopify.com/bfcm-2024
- Join our newsletter for weekly retail tech briefings ➜ https://retailnews.ai
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Let's not confuse simple with orconflate it with less than.
Our software is extremely complex and it built for massive
scale. I mean we had over Black Friday,
Cyber Monday, 10 trillion data queries, 1.1 trillion edge
requests. Like we make the complex thing
simple and and that's way more difficult than just allowing
(00:20):
that complexity to be passed on to our customer.
Hello and welcome to the retail podcast.
Now today's brand and guest is someone well, you may not know
Bobby specifically, but you've definitely heard the company
(00:42):
that he works for and what I really like to do today with
Bobby and in a minute we'll we'll go over across to Bobby is
get underneath if you like the hood of Shopify and understand
what is the because there was a release last last month.
We all heard about the new updates and I know we have a lot
of listeners on the podcast who are with Shopify agencies, will
(01:04):
have Shopify consultants or are thinking about I'm launching a
new product and I'm an established brand and I want a,
a platform that I can host that that on.
But before we get to that, let'sintroduce Bobby, Bobby Morrison,
Shopify CRO. Is that correct?
That's correct. Yeah.
Thanks for having me, Alex. It's an absolute pleasure.
Where in the world are you? I am in very hot Dallas, TX this
(01:28):
time of year. Everyone knows Shopify right?
I'd be surprised anyone on the planet that doesn't know
Shopify, but maybe I. I believe Shopify seems to
always be reinventing itself from e-commerce to now physical
stores. Could you sort of give us a
positioning on the modern Shopify stack?
What is on? Who is Shopify?
(01:50):
Yeah. You know, first we we stand, I
think our message in market's pretty consistent.
We're the retail operating system behind some of your
favourite brands. That operating system is made-up
of three key pillars. We have a an e-commerce pillar,
which I think most of your listeners are familiar with.
But we also have a wholesale offering and a retail offering.
And one of the things that we focus very hard on is just
(02:13):
making sure that our underlying primitives are consistent across
those journeys. So when you're in a retail store
and have an experience in store,it should feel like the Shopify
that you have when you're purchasing online.
And so our focus has been on making commerce better for
everyone. And commerce isn't just
ecommerce, it's commerce wherever commerce happens to
(02:34):
occur. So all the one click checkouts
that we've built into the socialnetworks that are out there that
people have tapped into and turned into new channels for
them and routes to market or whether it's online or in your
brick and mortar retail location.
We believe a unified experience is the right experience for
customers, ones that they're familiar with.
(02:54):
And we leverage the scale of of the company to help inform not
only what we've built in the past, but obviously what we're
going to build in the future. So we had 875,000,000 buyers on
the network last year. Wow, that purchase from Shopify.
So that kind of breath across 175 countries around the world
gives us a unique insight into consumer buying behaviour.
(03:16):
And we take that insight and really break it down to what are
the core problems or friction points or changes that we see in
customer buying. And then we build those insights
into the software to make sure that we're caring for that as we
go forward. So we tend to be a bit
opinionated on where commerce isgoing.
(03:36):
And at the end of the day, you know, as we go into this new
world of all things AI, we thinkcommerce is going to go through
a massive transformation and howpeople decide to purchase and
how they go through the consideration process.
And we think we have a very, very strong point of view of
what that looks like. And we brought, we're building
that into our software. So one of the things I've I've
(03:59):
heard said a few times at conferences is this path to
purchase online. And you mentioned social, it's
becoming a little bit more complex.
People are having to go via multiple digital touch points
before they get to the transaction.
And and where they where they transact is actually changing a
little bit and AI is having an impact on that.
(04:22):
And then post purchase in terms of how, and I was on a panel
last week, E Tel London or E TelEurope, all four brands were on
Shopify, which was just quite funny when I said, I'm curious,
what platforms do you want to sit on?
And they all said, we're all on Shopify, you know, and they, we
had beauty, we had fast fashion,but we were talking about post
(04:45):
purchase. What do you do post purchase?
So I'll give you a choice in terms of the the sort of pre
purchase or post purchase. I'm curious what what are some
of the trends you're seeing or some of the areas where Shopify
may have not focused on in the past and is now focusing on a
little bit more now? Yeah, I think and this is both
(05:07):
an internal trend, what we see in our own marketing and what we
hear from our customers. Obviously search has gone
through a radical transformationand while it's still early days,
it's no longer the keyword in the box, it's the end of a
prompt. And we're seeing the emergence
quarter on quarter of more and more AI enabled searches that
(05:29):
are getting deep query into product catalogues using third
parties for quality validation affiliate, which I think a lot
of marketing firms probably havestepped away from in many, in
many ways over the past few years.
I think is re emerging because the AI engines are going out
(05:49):
using third parties to validate quality, not your internal
products scoring system. So like that, that's probably
the one I hear about the most. My, my marketing is being
disrupted. Consideration is moving into the
AI engines and it's not too hardto think about a future where
(06:10):
commerce will start to happen atthat edge as well.
So I think those are the things that really stand out right now.
And so that that helps inform how we think about enabling
commerce for the the next generation.
You know, not too dissimilar from the pattern, Alex, that we
saw back in when social became more mainstream for direct
purchases. Once TikTok shop came in and you
(06:33):
know, Instagram and Facebook allowed it, allowed for direct
purchase, we realised very, veryquickly that that's where
commerce is happening and we need to make sure that we enable
it and let's be the first to getthere.
And we've had a pattern of doingthat over and over again and.
And and Shopify integrates the both platforms, the meta and
TikTok shop, right? Correct.
(06:54):
So just one again, another theme, just sticking with the AI
theme. I'm curious on your opinion.
It may not have a a direct impact on on Shopify, but one of
this, one of the things that were themes that were saying
seeing is what you've mentioned companies such as perplexity
where people search for that dress, circumventing the Shopify
(07:16):
or the e-commerce store and taking you directly to the
product, which in in my mind sort of means there's a new
model. We need a new model for
e-commerce like dark stores in in physical world where
marketing teams. And I guess this is what you're
saying. You've spent millions of pounds
on these beautifully created websites that the AI is just
(07:36):
circumventing and going to the product, which I think you know,
like in the old days like Alexa voice, all of that data sits
with perplexity, not the retailer.
Do you have any thoughts on that?
Is that like is there any, I don't know there any solutions?
Is there any things that retailers can do?
Yeah, I, well, first, I think the product catalogues and the
(07:57):
checkout still happens within the domain of the retailer.
It may not come through the front door landing pages and the
customer journey may be different, but I think most
retailers would say as long as you're landing on my properties
and choosing my products, that'sa that's a great thing.
And so I don't have a crystal ball on this one.
I think we're all learning our way through how customers are
(08:19):
using different AI engines. Yeah, perplexity is one of them.
Obviously there are others. And I think as we go forward,
we're just, we're staying close to how customers are changing
the way they're purchasing, where we can definitely see how
they're changing their search criteria.
And so it's, again, it's not hard to think too far out into
(08:40):
the future where that search criteria will then end up being
a transaction. But you're always looking for
trust. I know when I go to pick your
one of your favourite brands, gymshark.com.
Yep. When I land on Gym Shark, I know
that I am talking to Gym Shark. The product is Gym Shark's
product that's endorsed by Gym Shark.
And I'm getting ready to purchase that item.
And I have an experience that's consistent with the last time
(09:03):
that I was at Gym Shark, whetherI was in the store and hit the
purple button when I checked outor whether I was online, Gym
Shark knew me end to end now. Yeah, This, this the future,
this is a Bobby statement, maybenot a Shopify statement is in my
mind the the different AI wrappers and engines that sit on
top that are driving some of thesearch consideration could also
(09:25):
be one of those endpoints. And so how the real question
for, for companies like Shopify and maybe some of the others in
the spaces, how are they going to enable a direct relationship
from their customers in an AI engine?
And, and I think we have a pointof view of what that looks like.
And, you know, we'll see where that goes here in the in the not
(09:46):
so distant future. A lot of these brands start tiny
and then grow to become these global powerhouses.
Where do you see the future of? You mentioned the three areas
that Shopify operates in, but what's the profile of a Shopify
customer or the future customer of Shopify?
It has changed wildly, Alex, like our core DNA obviously is
(10:08):
an entrepreneurs and we have a deep passion for making things
easy for those who have an idea and want to bring it to market.
I think it's actually, you know,when I first came to Shopify, I
was wondering, you know, is thata, is that a bug for servicing
enterprise Oregon a feature? And I think what we're we're
realising, especially in macroeconomic times like today,
where you never know what the marketplace is going to demand,
(10:31):
whether it's geopolitical instability or whether it's
macroeconomic tariffs that are moving in and out.
Seems like every other week, youknow, speed and agility matter,
ease of use matters. And so when you design for the
entrepreneur, you have to take things that are extremely
complex and make them simple. When you design for the
(10:51):
enterprise, what most have done is you take things that are
extremely complex and you hand it over to the enterprise who
has resources to customise it and try to make it simple.
What Shopify has done is taken that administrivia out of
servicing the enterprise market and and we're seeing a lot of
the your favourite brands like you just mentioned the the last
(11:13):
engagement you had, all four outof four were on Shopify.
There's been a big shift in the marketplace.
So our core business, we stand on the shoulders of the
entrepreneurs that that we have brought onto the platform and we
watch them grow at and help themgrow at accelerated rates.
But we also go to the mid marketand to the enterprise to make
(11:35):
sure that we're servicing those customers.
And all of that was born out of companies like the Gym Sharks of
the World, who started off smalland grew aloe yoga.
The list. Goes on the list.
Goes on and on. But now once you have those on
the platform, you, you realise that you're now enabling them
differently and there may be others that are looking for
(11:57):
similar feature functionality across the enterprise.
And so now over 50% of our business is all upmarket and and
not a lot of people know that and it makes up in sales.
Market for luxury? No upmarket, meaning the size
and maturity of the business. Got you.
And if you look across that, I think people would traditionally
(12:18):
think of Shopify as fashion apparel, health and beauty.
And we do those things extremelywell.
And we're we're going to continue to lean into to those
customers to make sure we're providing them with a great
experience. But we've now also seen
automotive, a big three automotive manufacturer in North
America is on Shopify. We've seen large consumer
electronics and software services come on to Shopify.
(12:40):
We've seen food and beverage become a category for Shopify.
We've even seen things in education that have come on to
Shopify. And and it's not just
e-commerce. We're seeing more and more of
that unified experience. So there's a customer of ours in
in North America that runs the retail stores for universities
(13:03):
campuses across across the states, roughly 1000 locations,
all 1000 of those locations, those brick and mortar locations
run on Shopify. Now we also help support them in
their e-commerce world, but their core business is actually
face to face interaction with students walking in to get their
books, to get their sponsored gear from their university.
(13:25):
And so like the diversity of theShopify customer base is
extremely broad and it keeps getting wider every day as we
build new features, as we build new capabilities and those types
of customers that we service hasbeen expanding and we expect
that to continue. What is it that people get wrong
or when they're looking to come to Shopify, what are some of
(13:46):
those sort of things that they just, I don't know, through time
you've seen they're just thinking about it in the wrong
way. Yeah, I I'll take it.
That's what an amazing question,by the way.
I'll take it back to what I whatI said earlier, but maybe unpack
it a little bit, I think. And by the way, I fell into this
trap as well. I remember sitting in a meeting
and I had a conversation, it wasin like one of our keys senior
(14:08):
leadership meetings and I had mentioned simple, the word
simple over and over again. And and I got corrected by Toby.
Actually don't let's not confusesimple with or conflate it with
less than simple. Our software is extremely
complex and it built for massivescale.
I mean, we had over Black Friday, Cyber Monday, 10
(14:28):
trillion data queries, 1.1 trillion edge requests just over
a three day period. Like we make the complex,
complex things simple and, and that's way more difficult than
just allowing that complexity tobe passed on to our customers.
So I think one of the things people think about when they
think about Shopify is, oh, they're the entrepreneur
company. We are, but don't take that as a
(14:49):
I'm not ready for enterprise. Take that and say they have now
taken the legacy old school, oldsoftware mentality that is
traditional enterprise and and made it easy for me to be able
to deploy and operate. We have brands, Alex on Shopify
that have come to us with upwards of 400 technical
(15:11):
resources keeping the lights on of their legacy custom platform
or maybe some of those that are operated by our competitors.
Yeah, when we have moved them toShopify, they've been able to
run that same core platform witha third of the people, sometimes
even a tenth of those people. Now it doesn't mean that those
resources go away. It means they get to go work on
(15:32):
the fun stuff that they always wanted to work on versus the
keep the lights on kind of work that was happening before.
And I think this is the pattern of behaviour that we see in the
market. Each one of our retailers wants
to build new and and dynamic experiences, both for their
employees and for their customers.
But they're caught in the keep the lights on tech debt that has
(15:55):
them handcuffed and doesn't givethem the resources they need to
be able to build. We help customers do that.
Yeah, I mean I I've got personalexperience and I'm ex Microsoft
so I've had some horror stories of people.
Trying to ex Microsoft as well so I know what you're talking
about. Yeah, So I can, I can definitely
see you know the the allure of of a Shopify because it does go
(16:18):
into ERP and other some of the other CRM systems that
enterprises or mid sized enterprises.
If you don't have 5000 developers on call, how do you
create a model? And, and, and so like right now,
Alex, This is why it matters because when you have a change
that comes, you know, most people operate their commerce
platforms on some sort of a schedule.
(16:40):
Generally it's looking out over a six to nine month period.
They have a milestone moment of drop dead, no touches heading
into Black Friday, Cyber Monday.And then all of a sudden a
change in economic policy comes out of the middle of nowhere and
everyone has to scramble to figure out, do they have the
right supply chain? Are they compliant?
Are they applying the VAT tax orwhatever it may maybe
appropriately, are the tariffs all set up in a line and will
(17:02):
that sustain for just two weeks or is that going to be in
perpetuity? And what customers are now
realising is that the legacy systems and platforms that
they've been running on for 20 years aren't actually helping
them when they're holding them hostage.
And so this is, this is where our partners who have deep
domain expertise, it's, it's thelasers, the domains, the, the
(17:23):
mazes, our, our GSI partners, Accenture, Deloitte and and
others like coming alongside of our customers and showing them
there's a better way. And we've built migration tools
to make that move. That was probably very painful
when you did it 1520 years ago. You've made it a lot easier
today to flip the switch and andget to a platform that is anti
(17:47):
fragile and will actually scale with you when you need it to
scale. So like now, now is one of those
times where these systems, this kind of legacy view of
enterprise SAS is really being stress tested.
Coming coming towards the end ofof the our conversation, couple
of quick fire questions. Obviously, as I mentioned, a lot
(18:07):
of listeners are already on Shopify.
What's the one thing that they should do that they've not done
because they've been on Shopify for a long time and, you know,
maybe they've not. I'm just curious, is that one
thing that you see people haven't done?
Yeah. I don't know if there's one
single thing that stands out, but I can tell you the pattern
of behaviour that our best brands, those that are growing
(18:29):
the fastest typically, typicallydo one.
They have a trusted partner thatthey're working with.
You don't have someone that's sitting with you side by side
helping you innovate and design and think about the future,
leveraging their experience across other brands that may be
in your industry or across the market.
That's normally a miss. I would deeply encourage
everyone to get connected to a partner who understands all
(18:52):
things Shopify. They they are behind the scenes,
they know our Rd maps and they can help you design for the
future. Number 2 is we have a cut an
amazing customer success team. I love our customer success
team. It is one of our superpowers
inside of Shopify and at their fingertips.
They have access to tools that can help you think about your
business and make strategic decisions like what are the
(19:13):
patterns and what are we seeing?And how are people solving for
AI driven search versus traditional search?
Like we, we can come in as trusted third parties.
We have no skin in the game. And what search engine you use
on your on your website, you canuse Algolia, you can use bloom
reach, you can use whoever you choose to use.
But we may have an opinion or a set of data that might be
(19:35):
helpful for you as you decide how to optimise that experience
for your customers. And we can share with you
feedback on what's working, what's not working.
And I would tell you the third thing and this is, this is maybe
the the best one, Shopify has launched something called
Sidekick. If you are not using Sidekick
today, don't think it's an AI, it's an AI agent that's embedded
(19:56):
in the admin that's available toyou.
That agent capabilities are going to infinitely scale as AI
continues to get better over time.
And so we don't believe in boxing in.
And building a particular product around AI capability
today, that walled garden we think is overly restrictive.
What we are doing is casting a sale.
(20:17):
I, I wrote something about this on LinkedIn just recently from a
commercial perspective, we do the same thing on the product
side. So as you move from, you know,
Anthropic 3, seven to four O Opus to whatever's next, the the
engines going to continue to getbetter.
And it is doing wonderful thingsright now, helping merchants
make great decision. So I would just encourage your,
(20:39):
your listeners, if you are on Shopify and you haven't used
Sidekick, get it, pull it up, use it regularly and just know
it will grow and innovate at thespeed of AI innovation, which we
all know is a runaway train right now.
And, and that's a good thing. Final question.
It might might be a bit of an old question.
What's the one question I shouldhave asked you but I didn't?
(21:01):
Oh my gosh, I think you probablysee it on my face.
What's it like to work at? What's it like to work at
Shopify? What's it like to be in this
company that's wildly disruptive?
And how does that, how does thatmanifest with your partners and
customers? Like it's a great question.
I'm glad you brought it up. It's I love this place.
(21:22):
There's something special telling.
Everybody in there just. Quickly, I've been, I've been to
Shopify for three years. Oh no, I was at Intuit.
Intuit for three years, Microsoft for three years, telco
for a very long time. And I've seen, I've worked with
some great leaders. I, I got a chance to see Satya
in action and just his obsessionaround customer and bringing
(21:43):
customers into meetings and his curiosity is real.
Growth mindset is not a tagline.It's it's a reality.
I watched the song and how he operates and he's a masterful
operator. I got to tell you, a founder LED
is just different. And the purity of purpose in our
mission of making commerce better for everyone is not a
(22:03):
cliche. It is deeply rooted in
everything that we do as a company.
And, and it's so inspiring to have not just the permission,
but the mandate to do the unorthodox but true to
intentionally break the mainstream way of thinking of
classical old school. We use the language corpo
(22:26):
businesses and reinvent the way,the way not only commerce runs,
but how companies operate. And, and I tell you, it's a
great place to work if you're a builder, it's a great place to
work if you're an operator. We're probably not the right
place for you. And, and I think our, our
partners pick up that energy. It's exothermic in the way that
(22:47):
they show up on behalf of the customers and in behalf of
Shopify with our customers and, and we just love having great
conversations with our customers, helping them succeed.
I mean, there's nothing better than a model where we succeed
alongside our customer success. It's not a usage consumption
model like the hyperscalers. It's not a subscription seat
(23:07):
model that tends to lock people in.
Many of the brands when I was inShop Talk Barcelona are really
struggling with this fixed construct of cost, regardless of
the macro environment. And and now they're looking to
switch at Shopify. Our our monetization models line
up exactly with our customers aspirations, which is to help
(23:30):
them grow. And it's just, it's a, it's a
well oiled machine focused on a common mission with a great
leader who arguably is one of the best technologists of our
time at the helm guiding the product road map.
While myself and my team are arebuilding the go to market engine
that aligns and takes advantage of that product road map, road
(23:51):
map and brings it to life in themarket.
I saw that you've got a new level of partners or sorry, you,
I need to caveat this. What are the level of partners
that you now have? Because I saw somewhere on
LinkedIn one of the agencies saying we are now an enterprise
Shopify partner. Is that a new grade that you
bought out? Yeah, that sounds a little
(24:14):
creative marketing maybe a little bit.
We have we have certification levels inside of Shopify.
I I like to think of our partners as servicing all of all
of our customers. Some of them have domain
expertise upmarket with our largest enterprises.
Some people, some of them are working with some of our our mid
market customers. All of them are extremely
valuable. I think we have one of the
(24:35):
strongest partner ecosystems on the planet.
We certainly have the most mission driven partner ecosystem
on the planet and I think that shows up in the conversations we
have with customers. But, but you're, you're not
wrong in that the type of partner that's on Shopify today
is very different than what it was three years ago.
Yeah, it's not the one as I was saying, you know, the the the
(24:57):
one man band. It's.
It's not. It's not.
Your agencies. Now we, we, we, we have deep
exclusive partners that have been with Shopify that know it's
inside and out that are still with us and are growing and are
succeeding and we're, we're deeply invested in their
success. But we also have, you know,
great Gsis Victoria and the songteam over Attic Century.
(25:19):
We have great partnerships, Deloitte, we have great
partnerships. EY Brian and team, we have great
partnerships. We have systems integrators,
which is brand new for Shopify over the last three years.
So the astounds of the world, the mazes of the world, the the
new partners who used to be exclusive shops with our
competitors are making them moveto Shopify.
(25:40):
You know why though, Alex? It's because their customers are
moving. Yeah, Like I, I shared this data
point back at Investor Day. At the end of 23 customers, we
look at imports versus exports, those customers that are coming
to Shopify versus those that areleaving and going to the
competition. We were winning 38 to one in
October. That number of 23, that number
(26:01):
at the end of 24 increased to 4241.
I can't remember the number one of those 241 to 1 like that.
If you're a partner and you see this exodus happening in your
base from this company that you've been with for the last
decade plus now moving to Shopify, you realise, hey, I
probably need to build a Shopifypractise and and be the hero of
(26:23):
that story versus losing out. And so we've done a lot there.
And we have a couple of announcements we'll make later
on this quarter with another type of partner that's giving us
scale and reach into, you know, the hundreds of thousands of
resellers that will give us breadth down market and help
take both our retail offering tomarket as well as our e-commerce
(26:45):
offering. But we have a very high bar for
our partners. We require them to be deep
domain experts on our platform. We require them to have high EQ
and understanding of our customers businesses and we show
up side by side. It's almost 70% of our business
when we have a conversation withany of our clients that are
considering coming to Shopify iswith a partner in the room
(27:06):
because we believe deeply in that Co sell motion and making
sure that we're helping them getconnected.
Yeah, I can't imagine doing coming to Shopify alone.
So I I definitely, I think it's a it's a, it's an important
relationship. It is.
Well, you know, I could, I can carry on asking you so many
questions, but I have to be conscious of time.
Thank you so much. I look forward to hopefully
(27:27):
meeting you at one of these events.
Maybe not in the UK, but we. Will make it happen.
We will make it happen. Wonderful, Bobby.
Thank you so much. All right.
Thank you.
Let's not confuse simple with orconflate it with less than.
Our software is extremely complex and it built for massive
scale. I mean we had over Black Friday,
Cyber Monday, 10 trillion data queries, 1.1 trillion edge
requests. Like we make the complex thing
simple and and that's way more difficult than just allowing
(00:20):
that complexity to be passed on to our customer.
Hello and welcome to the retail podcast.
Now today's brand and guest is someone well, you may not know
Bobby specifically, but you've definitely heard the company
(00:42):
that he works for and what I really like to do today with
Bobby and in a minute we'll we'll go over across to Bobby is
get underneath if you like the hood of Shopify and understand
what is the because there was a release last last month.
We all heard about the new updates and I know we have a lot
of listeners on the podcast who are with Shopify agencies, will
(01:04):
have Shopify consultants or are thinking about I'm launching a
new product and I'm an established brand and I want a,
a platform that I can host that that on.
But before we get to that, let'sintroduce Bobby, Bobby Morrison,
Shopify CRO. Is that correct?
That's correct. Yeah.
Thanks for having me, Alex. It's an absolute pleasure.
Where in the world are you? I am in very hot Dallas, TX this
(01:28):
time of year. Everyone knows Shopify right?
I'd be surprised anyone on the planet that doesn't know
Shopify, but maybe I. I believe Shopify seems to
always be reinventing itself from e-commerce to now physical
stores. Could you sort of give us a
positioning on the modern Shopify stack?
What is on? Who is Shopify?
(01:50):
Yeah. You know, first we we stand, I
think our message in market's pretty consistent.
We're the retail operating system behind some of your
favourite brands. That operating system is made-up
of three key pillars. We have a an e-commerce pillar,
which I think most of your listeners are familiar with.
But we also have a wholesale offering and a retail offering.
And one of the things that we focus very hard on is just
(02:13):
making sure that our underlying primitives are consistent across
those journeys. So when you're in a retail store
and have an experience in store,it should feel like the Shopify
that you have when you're purchasing online.
And so our focus has been on making commerce better for
everyone. And commerce isn't just
ecommerce, it's commerce wherever commerce happens to
(02:34):
occur. So all the one click checkouts
that we've built into the socialnetworks that are out there that
people have tapped into and turned into new channels for
them and routes to market or whether it's online or in your
brick and mortar retail location.
We believe a unified experience is the right experience for
customers, ones that they're familiar with.
(02:54):
And we leverage the scale of of the company to help inform not
only what we've built in the past, but obviously what we're
going to build in the future. So we had 875,000,000 buyers on
the network last year. Wow, that purchase from Shopify.
So that kind of breath across 175 countries around the world
gives us a unique insight into consumer buying behaviour.
(03:16):
And we take that insight and really break it down to what are
the core problems or friction points or changes that we see in
customer buying. And then we build those insights
into the software to make sure that we're caring for that as we
go forward. So we tend to be a bit
opinionated on where commerce isgoing.
(03:36):
And at the end of the day, you know, as we go into this new
world of all things AI, we thinkcommerce is going to go through
a massive transformation and howpeople decide to purchase and
how they go through the consideration process.
And we think we have a very, very strong point of view of
what that looks like. And we brought, we're building
that into our software. So one of the things I've I've
(03:59):
heard said a few times at conferences is this path to
purchase online. And you mentioned social, it's
becoming a little bit more complex.
People are having to go via multiple digital touch points
before they get to the transaction.
And and where they where they transact is actually changing a
little bit and AI is having an impact on that.
(04:22):
And then post purchase in terms of how, and I was on a panel
last week, E Tel London or E TelEurope, all four brands were on
Shopify, which was just quite funny when I said, I'm curious,
what platforms do you want to sit on?
And they all said, we're all on Shopify, you know, and they, we
had beauty, we had fast fashion,but we were talking about post
(04:45):
purchase. What do you do post purchase?
So I'll give you a choice in terms of the the sort of pre
purchase or post purchase. I'm curious what what are some
of the trends you're seeing or some of the areas where Shopify
may have not focused on in the past and is now focusing on a
little bit more now? Yeah, I think and this is both
(05:07):
an internal trend, what we see in our own marketing and what we
hear from our customers. Obviously search has gone
through a radical transformationand while it's still early days,
it's no longer the keyword in the box, it's the end of a
prompt. And we're seeing the emergence
quarter on quarter of more and more AI enabled searches that
(05:29):
are getting deep query into product catalogues using third
parties for quality validation affiliate, which I think a lot
of marketing firms probably havestepped away from in many, in
many ways over the past few years.
I think is re emerging because the AI engines are going out
(05:49):
using third parties to validate quality, not your internal
products scoring system. So like that, that's probably
the one I hear about the most. My, my marketing is being
disrupted. Consideration is moving into the
AI engines and it's not too hardto think about a future where
(06:10):
commerce will start to happen atthat edge as well.
So I think those are the things that really stand out right now.
And so that that helps inform how we think about enabling
commerce for the the next generation.
You know, not too dissimilar from the pattern, Alex, that we
saw back in when social became more mainstream for direct
purchases. Once TikTok shop came in and you
(06:33):
know, Instagram and Facebook allowed it, allowed for direct
purchase, we realised very, veryquickly that that's where
commerce is happening and we need to make sure that we enable
it and let's be the first to getthere.
And we've had a pattern of doingthat over and over again and.
And and Shopify integrates the both platforms, the meta and
TikTok shop, right? Correct.
(06:54):
So just one again, another theme, just sticking with the AI
theme. I'm curious on your opinion.
It may not have a a direct impact on on Shopify, but one of
this, one of the things that were themes that were saying
seeing is what you've mentioned companies such as perplexity
where people search for that dress, circumventing the Shopify
(07:16):
or the e-commerce store and taking you directly to the
product, which in in my mind sort of means there's a new
model. We need a new model for
e-commerce like dark stores in in physical world where
marketing teams. And I guess this is what you're
saying. You've spent millions of pounds
on these beautifully created websites that the AI is just
(07:36):
circumventing and going to the product, which I think you know,
like in the old days like Alexa voice, all of that data sits
with perplexity, not the retailer.
Do you have any thoughts on that?
Is that like is there any, I don't know there any solutions?
Is there any things that retailers can do?
Yeah, I, well, first, I think the product catalogues and the
(07:57):
checkout still happens within the domain of the retailer.
It may not come through the front door landing pages and the
customer journey may be different, but I think most
retailers would say as long as you're landing on my properties
and choosing my products, that'sa that's a great thing.
And so I don't have a crystal ball on this one.
I think we're all learning our way through how customers are
(08:19):
using different AI engines. Yeah, perplexity is one of them.
Obviously there are others. And I think as we go forward,
we're just, we're staying close to how customers are changing
the way they're purchasing, where we can definitely see how
they're changing their search criteria.
And so it's, again, it's not hard to think too far out into
(08:40):
the future where that search criteria will then end up being
a transaction. But you're always looking for
trust. I know when I go to pick your
one of your favourite brands, gymshark.com.
Yep. When I land on Gym Shark, I know
that I am talking to Gym Shark. The product is Gym Shark's
product that's endorsed by Gym Shark.
And I'm getting ready to purchase that item.
And I have an experience that's consistent with the last time
(09:03):
that I was at Gym Shark, whetherI was in the store and hit the
purple button when I checked outor whether I was online, Gym
Shark knew me end to end now. Yeah, This, this the future,
this is a Bobby statement, maybenot a Shopify statement is in my
mind the the different AI wrappers and engines that sit on
top that are driving some of thesearch consideration could also
(09:25):
be one of those endpoints. And so how the real question
for, for companies like Shopify and maybe some of the others in
the spaces, how are they going to enable a direct relationship
from their customers in an AI engine?
And, and I think we have a pointof view of what that looks like.
And, you know, we'll see where that goes here in the in the not
(09:46):
so distant future. A lot of these brands start tiny
and then grow to become these global powerhouses.
Where do you see the future of? You mentioned the three areas
that Shopify operates in, but what's the profile of a Shopify
customer or the future customer of Shopify?
It has changed wildly, Alex, like our core DNA obviously is
(10:08):
an entrepreneurs and we have a deep passion for making things
easy for those who have an idea and want to bring it to market.
I think it's actually, you know,when I first came to Shopify, I
was wondering, you know, is thata, is that a bug for servicing
enterprise Oregon a feature? And I think what we're we're
realising, especially in macroeconomic times like today,
where you never know what the marketplace is going to demand,
(10:31):
whether it's geopolitical instability or whether it's
macroeconomic tariffs that are moving in and out.
Seems like every other week, youknow, speed and agility matter,
ease of use matters. And so when you design for the
entrepreneur, you have to take things that are extremely
complex and make them simple. When you design for the
(10:51):
enterprise, what most have done is you take things that are
extremely complex and you hand it over to the enterprise who
has resources to customise it and try to make it simple.
What Shopify has done is taken that administrivia out of
servicing the enterprise market and and we're seeing a lot of
the your favourite brands like you just mentioned the the last
(11:13):
engagement you had, all four outof four were on Shopify.
There's been a big shift in the marketplace.
So our core business, we stand on the shoulders of the
entrepreneurs that that we have brought onto the platform and we
watch them grow at and help themgrow at accelerated rates.
But we also go to the mid marketand to the enterprise to make
(11:35):
sure that we're servicing those customers.
And all of that was born out of companies like the Gym Sharks of
the World, who started off smalland grew aloe yoga.
The list. Goes on the list.
Goes on and on. But now once you have those on
the platform, you, you realise that you're now enabling them
differently and there may be others that are looking for
(11:57):
similar feature functionality across the enterprise.
And so now over 50% of our business is all upmarket and and
not a lot of people know that and it makes up in sales.
Market for luxury? No upmarket, meaning the size
and maturity of the business. Got you.
And if you look across that, I think people would traditionally
(12:18):
think of Shopify as fashion apparel, health and beauty.
And we do those things extremelywell.
And we're we're going to continue to lean into to those
customers to make sure we're providing them with a great
experience. But we've now also seen
automotive, a big three automotive manufacturer in North
America is on Shopify. We've seen large consumer
electronics and software services come on to Shopify.
(12:40):
We've seen food and beverage become a category for Shopify.
We've even seen things in education that have come on to
Shopify. And and it's not just
e-commerce. We're seeing more and more of
that unified experience. So there's a customer of ours in
in North America that runs the retail stores for universities
(13:03):
campuses across across the states, roughly 1000 locations,
all 1000 of those locations, those brick and mortar locations
run on Shopify. Now we also help support them in
their e-commerce world, but their core business is actually
face to face interaction with students walking in to get their
books, to get their sponsored gear from their university.
(13:25):
And so like the diversity of theShopify customer base is
extremely broad and it keeps getting wider every day as we
build new features, as we build new capabilities and those types
of customers that we service hasbeen expanding and we expect
that to continue. What is it that people get wrong
or when they're looking to come to Shopify, what are some of
(13:46):
those sort of things that they just, I don't know, through time
you've seen they're just thinking about it in the wrong
way. Yeah, I I'll take it.
That's what an amazing question,by the way.
I'll take it back to what I whatI said earlier, but maybe unpack
it a little bit, I think. And by the way, I fell into this
trap as well. I remember sitting in a meeting
and I had a conversation, it wasin like one of our keys senior
(14:08):
leadership meetings and I had mentioned simple, the word
simple over and over again. And and I got corrected by Toby.
Actually don't let's not confusesimple with or conflate it with
less than simple. Our software is extremely
complex and it built for massivescale.
I mean, we had over Black Friday, Cyber Monday, 10
(14:28):
trillion data queries, 1.1 trillion edge requests just over
a three day period. Like we make the complex,
complex things simple and, and that's way more difficult than
just allowing that complexity tobe passed on to our customers.
So I think one of the things people think about when they
think about Shopify is, oh, they're the entrepreneur
company. We are, but don't take that as a
(14:49):
I'm not ready for enterprise. Take that and say they have now
taken the legacy old school, oldsoftware mentality that is
traditional enterprise and and made it easy for me to be able
to deploy and operate. We have brands, Alex on Shopify
that have come to us with upwards of 400 technical
(15:11):
resources keeping the lights on of their legacy custom platform
or maybe some of those that are operated by our competitors.
Yeah, when we have moved them toShopify, they've been able to
run that same core platform witha third of the people, sometimes
even a tenth of those people. Now it doesn't mean that those
resources go away. It means they get to go work on
(15:32):
the fun stuff that they always wanted to work on versus the
keep the lights on kind of work that was happening before.
And I think this is the pattern of behaviour that we see in the
market. Each one of our retailers wants
to build new and and dynamic experiences, both for their
employees and for their customers.
But they're caught in the keep the lights on tech debt that has
(15:55):
them handcuffed and doesn't givethem the resources they need to
be able to build. We help customers do that.
Yeah, I mean I I've got personalexperience and I'm ex Microsoft
so I've had some horror stories of people.
Trying to ex Microsoft as well so I know what you're talking
about. Yeah, So I can, I can definitely
see you know the the allure of of a Shopify because it does go
(16:18):
into ERP and other some of the other CRM systems that
enterprises or mid sized enterprises.
If you don't have 5000 developers on call, how do you
create a model? And, and, and so like right now,
Alex, This is why it matters because when you have a change
that comes, you know, most people operate their commerce
platforms on some sort of a schedule.
(16:40):
Generally it's looking out over a six to nine month period.
They have a milestone moment of drop dead, no touches heading
into Black Friday, Cyber Monday.And then all of a sudden a
change in economic policy comes out of the middle of nowhere and
everyone has to scramble to figure out, do they have the
right supply chain? Are they compliant?
Are they applying the VAT tax orwhatever it may maybe
appropriately, are the tariffs all set up in a line and will
(17:02):
that sustain for just two weeks or is that going to be in
perpetuity? And what customers are now
realising is that the legacy systems and platforms that
they've been running on for 20 years aren't actually helping
them when they're holding them hostage.
And so this is, this is where our partners who have deep
domain expertise, it's, it's thelasers, the domains, the, the
(17:23):
mazes, our, our GSI partners, Accenture, Deloitte and and
others like coming alongside of our customers and showing them
there's a better way. And we've built migration tools
to make that move. That was probably very painful
when you did it 1520 years ago. You've made it a lot easier
today to flip the switch and andget to a platform that is anti
(17:47):
fragile and will actually scale with you when you need it to
scale. So like now, now is one of those
times where these systems, this kind of legacy view of
enterprise SAS is really being stress tested.
Coming coming towards the end ofof the our conversation, couple
of quick fire questions. Obviously, as I mentioned, a lot
(18:07):
of listeners are already on Shopify.
What's the one thing that they should do that they've not done
because they've been on Shopify for a long time and, you know,
maybe they've not. I'm just curious, is that one
thing that you see people haven't done?
Yeah. I don't know if there's one
single thing that stands out, but I can tell you the pattern
of behaviour that our best brands, those that are growing
(18:29):
the fastest typically, typicallydo one.
They have a trusted partner thatthey're working with.
You don't have someone that's sitting with you side by side
helping you innovate and design and think about the future,
leveraging their experience across other brands that may be
in your industry or across the market.
That's normally a miss. I would deeply encourage
everyone to get connected to a partner who understands all
(18:52):
things Shopify. They they are behind the scenes,
they know our Rd maps and they can help you design for the
future. Number 2 is we have a cut an
amazing customer success team. I love our customer success
team. It is one of our superpowers
inside of Shopify and at their fingertips.
They have access to tools that can help you think about your
business and make strategic decisions like what are the
(19:13):
patterns and what are we seeing?And how are people solving for
AI driven search versus traditional search?
Like we, we can come in as trusted third parties.
We have no skin in the game. And what search engine you use
on your on your website, you canuse Algolia, you can use bloom
reach, you can use whoever you choose to use.
But we may have an opinion or a set of data that might be
(19:35):
helpful for you as you decide how to optimise that experience
for your customers. And we can share with you
feedback on what's working, what's not working.
And I would tell you the third thing and this is, this is maybe
the the best one, Shopify has launched something called
Sidekick. If you are not using Sidekick
today, don't think it's an AI, it's an AI agent that's embedded
(19:56):
in the admin that's available toyou.
That agent capabilities are going to infinitely scale as AI
continues to get better over time.
And so we don't believe in boxing in.
And building a particular product around AI capability
today, that walled garden we think is overly restrictive.
What we are doing is casting a sale.
(20:17):
I, I wrote something about this on LinkedIn just recently from a
commercial perspective, we do the same thing on the product
side. So as you move from, you know,
Anthropic 3, seven to four O Opus to whatever's next, the the
engines going to continue to getbetter.
And it is doing wonderful thingsright now, helping merchants
make great decision. So I would just encourage your,
(20:39):
your listeners, if you are on Shopify and you haven't used
Sidekick, get it, pull it up, use it regularly and just know
it will grow and innovate at thespeed of AI innovation, which we
all know is a runaway train right now.
And, and that's a good thing. Final question.
It might might be a bit of an old question.
What's the one question I shouldhave asked you but I didn't?
(21:01):
Oh my gosh, I think you probablysee it on my face.
What's it like to work at? What's it like to work at
Shopify? What's it like to be in this
company that's wildly disruptive?
And how does that, how does thatmanifest with your partners and
customers? Like it's a great question.
I'm glad you brought it up. It's I love this place.
(21:22):
There's something special telling.
Everybody in there just. Quickly, I've been, I've been to
Shopify for three years. Oh no, I was at Intuit.
Intuit for three years, Microsoft for three years, telco
for a very long time. And I've seen, I've worked with
some great leaders. I, I got a chance to see Satya
in action and just his obsessionaround customer and bringing
(21:43):
customers into meetings and his curiosity is real.
Growth mindset is not a tagline.It's it's a reality.
I watched the song and how he operates and he's a masterful
operator. I got to tell you, a founder LED
is just different. And the purity of purpose in our
mission of making commerce better for everyone is not a
(22:03):
cliche. It is deeply rooted in
everything that we do as a company.
And, and it's so inspiring to have not just the permission,
but the mandate to do the unorthodox but true to
intentionally break the mainstream way of thinking of
classical old school. We use the language corpo
(22:26):
businesses and reinvent the way,the way not only commerce runs,
but how companies operate. And, and I tell you, it's a
great place to work if you're a builder, it's a great place to
work if you're an operator. We're probably not the right
place for you. And, and I think our, our
partners pick up that energy. It's exothermic in the way that
(22:47):
they show up on behalf of the customers and in behalf of
Shopify with our customers and, and we just love having great
conversations with our customers, helping them succeed.
I mean, there's nothing better than a model where we succeed
alongside our customer success. It's not a usage consumption
model like the hyperscalers. It's not a subscription seat
(23:07):
model that tends to lock people in.
Many of the brands when I was inShop Talk Barcelona are really
struggling with this fixed construct of cost, regardless of
the macro environment. And and now they're looking to
switch at Shopify. Our our monetization models line
up exactly with our customers aspirations, which is to help
(23:30):
them grow. And it's just, it's a, it's a
well oiled machine focused on a common mission with a great
leader who arguably is one of the best technologists of our
time at the helm guiding the product road map.
While myself and my team are arebuilding the go to market engine
that aligns and takes advantage of that product road map, road
(23:51):
map and brings it to life in themarket.
I saw that you've got a new level of partners or sorry, you,
I need to caveat this. What are the level of partners
that you now have? Because I saw somewhere on
LinkedIn one of the agencies saying we are now an enterprise
Shopify partner. Is that a new grade that you
bought out? Yeah, that sounds a little
(24:14):
creative marketing maybe a little bit.
We have we have certification levels inside of Shopify.
I I like to think of our partners as servicing all of all
of our customers. Some of them have domain
expertise upmarket with our largest enterprises.
Some people, some of them are working with some of our our mid
market customers. All of them are extremely
valuable. I think we have one of the
(24:35):
strongest partner ecosystems on the planet.
We certainly have the most mission driven partner ecosystem
on the planet and I think that shows up in the conversations we
have with customers. But, but you're, you're not
wrong in that the type of partner that's on Shopify today
is very different than what it was three years ago.
Yeah, it's not the one as I was saying, you know, the the the
(24:57):
one man band. It's.
It's not. It's not.
Your agencies. Now we, we, we, we have deep
exclusive partners that have been with Shopify that know it's
inside and out that are still with us and are growing and are
succeeding and we're, we're deeply invested in their
success. But we also have, you know,
great Gsis Victoria and the songteam over Attic Century.
(25:19):
We have great partnerships, Deloitte, we have great
partnerships. EY Brian and team, we have great
partnerships. We have systems integrators,
which is brand new for Shopify over the last three years.
So the astounds of the world, the mazes of the world, the the
new partners who used to be exclusive shops with our
competitors are making them moveto Shopify.
(25:40):
You know why though, Alex? It's because their customers are
moving. Yeah, Like I, I shared this data
point back at Investor Day. At the end of 23 customers, we
look at imports versus exports, those customers that are coming
to Shopify versus those that areleaving and going to the
competition. We were winning 38 to one in
October. That number of 23, that number
(26:01):
at the end of 24 increased to 4241.
I can't remember the number one of those 241 to 1 like that.
If you're a partner and you see this exodus happening in your
base from this company that you've been with for the last
decade plus now moving to Shopify, you realise, hey, I
probably need to build a Shopifypractise and and be the hero of
(26:23):
that story versus losing out. And so we've done a lot there.
And we have a couple of announcements we'll make later
on this quarter with another type of partner that's giving us
scale and reach into, you know, the hundreds of thousands of
resellers that will give us breadth down market and help
take both our retail offering tomarket as well as our e-commerce
(26:45):
offering. But we have a very high bar for
our partners. We require them to be deep
domain experts on our platform. We require them to have high EQ
and understanding of our customers businesses and we show
up side by side. It's almost 70% of our business
when we have a conversation withany of our clients that are
considering coming to Shopify iswith a partner in the room
(27:06):
because we believe deeply in that Co sell motion and making
sure that we're helping them getconnected.
Yeah, I can't imagine doing coming to Shopify alone.
So I I definitely, I think it's a it's a, it's an important
relationship. It is.
Well, you know, I could, I can carry on asking you so many
questions, but I have to be conscious of time.
Thank you so much. I look forward to hopefully
(27:27):
meeting you at one of these events.
Maybe not in the UK, but we. Will make it happen.
We will make it happen. Wonderful, Bobby.
Thank you so much. All right.
Thank you.
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