Since its IPO in 2015 at the latest, Shopify has been one of the most successful new companies in the technology sector. With innovative tools and technologies, they make it easier for online merchants to operate their own online shops. But now storage and shipping will probably be added as well. A challenge to Amazon?
Shopify – Big Player?
Shopify has always been committed to innovation. The company’s success in recent years definitely speaks for itself, and shareholders in particular continue to be very pleased.
At the Unite Conference in June 2019, the company announced that Shopify Plus would be revised and new tools would be introduced to further reduce and simplify the workload for merchants.
However, the most attention has probably been paid to the introduction of the Shopify Fulfillment Network. This shipping network will bring a second player to the market alongside Amazon, with its storage and shipping network.
Therefore, it is not surprising that the Canadian software provider’s biggest investment is also connected to its own shipping and warehousing network.
Huge Investment: 450 Million US-Dollar
As announced on September 9th, Shopify has agreed to a deal with 6 River Systems and has purchased the supplier of warehouse solutions and automation. The purchase price, which consists of 60% cash and 40% Shopify Class A shares, is approximately $450 million.
6 River Systems is flexible and scalable warehouse automation powered by collaborative robots and artificial intelligence. The solution engages associates, keeps them on task and boosts productivity by 2-3x.6 River Systems
On its website, 6 River Systems describes itself as a flexible and scalable warehouse automation solution based on robots and artificial intelligence that significantly increases productivity.
Amazon vs Shopify
If someone is wondering whether these automation solutions can compete with Amazon’s, then the answer is clearly YES. Why? Two of the founders of 6 River Systems used to work as executives at Kivas System. Kiva Systems, in turn, was purchased in 2012 for approximately $775 million and has become Amazon Robotics – Amazon’s storage and logistics solution.
Therefore, Shopify should at least in this point be in no way inferior to the online giant Amazon.
Shopify Fulfillment Network
In mid-June, Shopify announced the debut of the Shopify Fulfillment Network, a new way for professional merchants to bring orders to customers faster and easier while even reducing shipping costs. AI-based warehousing and logistics technologies enable optimal inventory management.
Shopify said it had advanced fulfillment systems and technologies that had previously been “reserved for the world’s largest companies,” making it accessible and affordable for every retailer.
For some sellers, this new fulfillment system could make sense and be financially worthwhile – if it will make people change from Amazon to Shopify remains to be seen. We have to wait until more details and clear data are available, but we should keep an eye on the development. So it remains interesting