E-commerce company Shopify closed up 7.5% on Wednesday after it announced a plethora of enhancements to its direct-to-consumer platform for brands today. The company promulgated a new Shopify Plus for enterprise, uncovered its next-generation Point of Sale (POS) software, and broadened its language, payment, and store capabilities. The company also presented developers with a handful of new tools. But the most significant news was the AI-powered Shopify Fulfillment Network.
SHOP aims to offer its services to a variety of merchants, while seeking to customize their service to each merchant’s demands.
“We assess merchants on a case by case basis depending on their product types and fulfillment needs,” Miller told VentureBeat. “The goal is to offer Shopify Fulfillment Network to Shopify merchants of all sizes. At launch, we’ll be offering our services primarily to small and medium sized businesses who are currently using a third-party logistics provider that are unable to fully meet their needs, in addition to merchants who have outgrown their existing fulfillment processes.”
Shopify states that its fulfillment network employs machine learning to ensure timely deliveries and lower shipping costs. The company’s inventory-allocation technology prognosticates the closest fulfillment centers and optimal inventory quantities per location. After a customer completes a checkout, the Shopify Fulfillment Network handles the rest.
“Our machine learning capabilities predict demand, inventory allocation, and route orders to the closest fulfillment center,” Miller explained. “Inputs include the locations of our merchants, product details, consumer locations, and shopping behavior.”
One rapidly expanding segment of the company’s business is SHOP’s cross-border selling capabilities. Shopify Admin has increased support for 11 more languages including: Traditional Chinese, Chinese, Danish, Dutch, Finnish, Hindi, Malay, Norwegian, Swedish, Korean, and Thai. In addition, Shopify Payments now allows merchants sell in multiple currencies while still getting paid in their local currency. Prices are automatically converted based on daily foreign exchange rates.
“We saw significant growth with our merchants looking to expand internationally and in Q1 2019, international growth was our fastest-growing customer segment, with total merchant sales (GMV) from international nearly doubling,” Miller explained. “Our initial launch includes AUD, EUR, JPY, SGD, USD, CAD, HKD, NZD, and GBP. These are the currencies that we are seeing the most traction from a cross-border selling perspective. We look to expand this list in the future.”
Investors looking at ETFs that hold Shopify can consider the First Trust International Equity Opportunities ETF (FPXI), the newer Global X Cloud Computing ETF (CLOU) or the SPDR Innovative Technology ETF (XITK), all of which have decent weightings of the stock.
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