Shopify had a rough start in 2023. It had to change its trajectory by implementing a turnaround strategy. Fewer sales and staff reductions worn it down. In the first half of the year, Shopify reduced its staff load by 20% and divested its logistics division.
The reason behind it? To “aggressively invest in fulfillment networks.” Luckily, from a financial point of view, it exceeded expectations. Gross Merchandise Volume (GMV) grew by 17% to $55 billion.
A rough start in 2023
In May, Shopify informed staff that employees were on the chopping block for the second time in 10 months. More than 2,000 employees were let go in that round.
Bloomberg reports that it sold most of its logistics business to Flexport in May. This move was motivated by the need to focus on the e-commerce platform. Shopify had to divest its logistics arm, the very same one that took a few years to build. But in exchange, Reuters reports that Shopify gained a 13% stake in Flexport, aligning with its new strategic direction.
Following its advice to small, struggling business owners, Shopify turned it around. It advises business owners: “ A business downturn is the beginning, not the end. It gives you the chance to learn, start new, and rebuild.”
Shopify financials improve
In August, Shopify revenues increased by 31% year-over-year (YoY), while its cash flow was positive for a third consecutive quarter.
“We’re not just shipping products faster, but we are also expanding our global merchant base, all while improving our ability to generate greater free cash flow,” says Harley Finkelstein, Shopify president.
In the third quarter of 2023, revenue increased again by 25%, and gross profit increased by 36% YoY. Finkelstein attributes this to the progress they are making to become the global leader in commerce one day.
“Our ability to help our merchants succeed in any economic environment by delivering innovative product solutions has not only built strong trust with our merchants but has positioned Shopify for sustained growth and profitability for the future,” he says.
Shopify AI-powered features
CEO Tobias Lütke has been vocal about AI’s benefits and how it’s shaping business.
This year, Shopify introduced Sidekick to its offering. It can modify merchants’ shop designs, add product collections, or make suggestions.
In July, Lütke introduced Sidekick to entrepreneurs on social media.
Integrating Shopify with Locate2u
Integrating Shopify with the Locate2u platform allows businesses to streamline your Shopify store’s order management and delivery logistics.
To simplify the process, Locate2u launched a guide to help navigate this process step by step.
It has several benefits that can help operate your business more efficiently.
It allows for the efficient management of Shopify orders. You can create stops for your delivery drivers based on your Shopify orders.
- You can set up automation rules that determine which orders are automatically sent to Locate2u for delivery management.
- Locate2u provides real-time tracking for your deliveries. Your customers can receive notifications about their orders, which will improve their experience overall.
About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand. Do you have a story you would like her to expose, report on, or consider? Please send your request to Newsdesk@locate2u.com.
