Will Deliverr help Shopify better compete with Amazon?
Shopify is often seen as an alternative for independent sellers frustrated with Fulfillment by Amazon’s changing inventory rules and increasing seller costs. Will acquiring Deliverr help close the gap on fast fulfillment?
Deliverr’s technology integrates third-party sellers with major e-commerce sites including Amazon, eBay and Walmart and helps them move their products to consumers in one to two days. Using predictive analytics and machine learning, Deliverr’s software anticipates demand for products based on geography, among other variables. This helps to optimally “pre-position” inventory in its network of more than 80 leased warehouses, where third-party logistics partners pick, pack and deliver orders.
Combined with Shopify’s self-operated warehouse hubs, Deliverr’s technology will power Shop Promise, a new Shopify service that will provide its customers with two-day and next-day delivery as well as expanded options for storage, freight, inventory preparation and returns. Shopify’s fastest shipping option has been two days.
Shopify wrote in a blog entry, “This delivery promise extends beyond the online store across surfaces like Google, Facebook, Instagram and the Shop app, helping merchants improve trust and increase sales with billions of potential customers by meeting them where they like to shop. Most importantly, Shop Promise guarantees merchants what no other commerce platform can: full ownership of their brand, business intelligence, and customer data.”
The $2.1 billion combination, which is pending regulatory approval, also promises merchants a “one-stop shop for their logistics needs,” from initial receipt of inventory, to distribution and returns, as well as “simplified multichannel inventory management” with a single place for merchants to ship their inventory for different sales channels.
“Our goal is to not only level the playing field for independent businesses, but to tilt it in their favor — turning their size and agility into their superpower,” Shopify CEO Toby Lutke said in a statement.
News of the acquisition follow’s Amazon’s launch last month of Buy With Prime functionality, which allows retailers that sell on Amazon’s third-party marketplace to implement Amazon Prime on their own websites.
According to Shopify, Amazon leads U.S. e-commerce with 41.0 percent market share in 2021, followed by Shopify at 10.3 percent, and Walmart at 6.6 percent.
Shopify Reports First-Quarter 2022 Financial Results, Plans to Acquire Ecommerce Fulfillment Technology Provider Deliverr – Shopify
- Holy Ship! Shopify to Acquire Deliverr for $2.1B: Building the Future of Global Logistics for Independent Brands – Shopify
- Deliverr has reached an agreement to join Shopify – Deliverr
- Shopify to Buy E-Commerce Fulfillment Specialist Deliverr for $2.1 Billion – The Wall Street Journal
- Shopify Buys Inventory Management Startup Deliverr for $2.1B – GlobeSt.com
- Shopify acquires shipping logistics startup Deliverr for $2.1B – TechCrunch
- Shopify aims to make up for disappointing profits with faster fulfillment – Glossy
- Amazon brings Prime power to other websites – RetailWire
DISCUSSION QUESTIONS: Does Deliverr potentially make Shopify a more serious competitor to Amazon relative to fulfillment and inventory management? What other steps or investments may be necessary for Shopify to gain ground on Amazon, particularly in the wake of Buy With Prime?