Reasons:

My team and I work and talk with dozens of Shopify merchants day in and out. Unfortunately, 90% of traffic comes from Facebook and Google Ads, and the traffic is down 30-40% from Facebook and Google Ads (not considering effective traffic). Why? Thanks to the death of 3rd party cookie tracking – the bread and butter of Facebook and Google revenue.

A stunning 80% of the shopper data visible in 2021 will not be accessible in 2022. That means ad-re-targeting won’t work effectively. 44% of marketers predicted they would need to quintuple their spending from 5% to 25% to hit the same goals in 2022 as they did in 2021.

What is next for Shopify:

If Shopify aspires to compete with Amazon and be a force in the eCommerce space, it can’t be just any eCommerce Software infrastructure company. They have to the part of their merchant’s journey in maximizing profits. Recently, they have bet on the wrong priorities – NFT, Metaverse, etc. They need to figure out the following asap:

1. Provide tools for the best in-site experience and engage shoppers, including anonymous in real-time, so that they convert and return in the cookie-less era. Of course, it is easier said than done :).
2. Be a part of the merchant’s journey in driving organic traffic. They can’t let merchants figure out alone.
3. Minimize merchant dependency on Facebook and Google Ads traffic.
4. Prime is an example of how Amazon built its sizeable loyal customer base. However, it is difficult for Shopify to replicate it.
5. Using current session-based data to upsell and cross-sell in real-time.
6. Realtime Optimization (for example, AI automation., frequency capping, dynamic product discounts, badging, etc.

There are very few companies that have based their technology that doesn’t use third-party data as a source of information to provide a personalized experience to shoppers. CartUp AI is one of them. We have built our products from scratch to rely on using first-party data to provide personalization and search services, unlike most vendors that depend on third-party data to provide personalization and search services. This approach, albeit costly and complex, provides more accurate personalization and is efficient at driving shoppers to act.

Shopify’s acquisition of Deliverr is one right step towards it. However, the acquisition has no meaning if they can’t drive shoppers to merchant’s sites and convert.

Tough times for Shopify. But they have smart people, led by Tobias Lutke, who will make it right.