Shopify CTO: our platform is now handling Black Friday level traffic every day

https://twitter.com/jmwind/status/1250816681024331777

by i_am_viet • 6 years ago

315 126 6 years ago

q92z8oeif• 6 years ago

traffic != sales

The whole industry is experiencing a surge in online-window-shopping. Amazon is probably seeing a few blackfridays increase.

drclau• 6 years ago

Do you have some data or know where I can find something? I'm genuinely curious.

garrettgrimsley• 6 years ago

To add yet another data point as the many other commenters have already done: I work at UPS in a distribution hub. Today, Friday April 17th, we're doing parcel volume of around 215,000. On a typical Friday this time of year we do around about 120,000 parcels. My hub is hiring more workers, extending shifts, and asking more workers to work double-shifts. Volume has increased so much at some hubs that the volume is being re-routed through other hubs to help deal with it. Why else would Amazon be hiring 175,000 people in a month? We're experience peak season volume in April.

Online sales are absolutely up.

ambicapter• 6 years ago

I work for an ecommerce business and can attest that orders are up in accordance with the headline.

guac• 6 years ago

Same here. We're seeing very out-of-season numbers. In fact we saw another massive uptick this week that was suspiciously timed with the stimulus direct deposits going out (Tuesday/Wed morn).

bitreality• 6 years ago

It's two facets. On the one hand, people are definitely buying more essential products. They are also definitely visiting more ecommerce sites. They're bored, online shopping is a thing to do.

Most people aren't at the point where they feel they need to drastically cut their spending. Most developed countries have some sort of payment going out to at least the unemployed. Also, even the newly unemployed have only been in that position for a few weeks.

The people who are still employed, whether that's remote or whatever, have a surplus of money they normally would spend on things like travel, events, and dining out. They are absolutely not worried about spending money on discretionaries.

The reality is, people still have a ton of money to spend. And less places to spend it. This recession is just barely getting started.

brd• 6 years ago

I've been talking to as many companies as I can during all of this. The surge is not evenly distributed but a lot of companies are seeing surprising upticks in online traffic and sales.

The big question though is how long will this last? I think the general population has not yet appreciated the possible severity of the ensuing economic downturn.

A lot of trade publications are already starting to sound the alarms on how ugly this could get. A return to 2008 era aggressive discounting is likely going to happen. Retail partners may be crippled by the quarantine. A lot of brands are going to be assailed from many directions simultaneously, it's going to hurt.

goalieca• 6 years ago

i saw a lot of brewers move to the shopify platform but the revenues are just not the same as when attached with the restaurants and taprooms. Many are expected to fail which means they will drop off shopify. I think overall, shopify will still be up since this is a wonderful acceleration of a change that was already in progress. But yes, this curve will flatten too as small retail starts failing and wallets dry up.

trimbo• 6 years ago

I think the general population has not yet appreciated the possible severity of the ensuing economic downturn.

My fear as well. The swiftness and ferocity of this downturn is like nothing ever, AFAIK. 22 million out of work in 4 weeks. Many are unlikely to get their jobs back. So while certain companies are seeing upticks due to logistics of the lockdown, I don't think it's safe to assume it would continue long after SIP ends.

ben_w3• 6 years ago

Many are unlikely to get their jobs back.

Their original job? Sounds plausible. Any job? Surely that would be a political choice for their respective governments? Unless there’s a reason we can’t repeat the famous infrastructure jobs programs from a century ago - I’m no economist, so I genuinely don’t know, but Hoover Dam Mark 2 sounds good to me.

dragonwriter3• 6 years ago

I think the general population has not yet appreciated the possible severity of the ensuing economic downturn.

I think the general public has not yet appreciated the current severity of the present economic downturn, much less the future possibility.

avalys2• 6 years ago

Really? What are people buying?

brianwawok2• 6 years ago

Good story here

https://www.visualcapitalist.com/shoppers-buying-online-ecom...

Food, workout items, entertainment. A lot of categories are through the roof!

thestu• 6 years ago

I went to my local big box store maybe three weeks ago and the whole fitness section had been cleaned out. It seems like bikes are getting very popular (at least here in PNW) and I wouldn't be surprised if it's very hard to find a decent bike in 2 or 3 months. As we cycle through the seasons different items / categories are going to get unexpectedly popular. Nobody really knows how to keep themselves sane during August in a pandemic, but there's probably a product or product category that will help with that.

matwood• 6 years ago

workout items

I wonder if gyms will ever come back from this. Gold's announced yesterday they are permanently closing 30+ locations. Even when people go back out, gyms were never the cleanest places to start with. Some places will require masks for the near future, so how does that work at a gym? Now that I'm been forced to finish my home gym, I'll likely cancel my membership once things open again.

ranDOMscripts• 6 years ago

Everything? Amazon is crushing it and clearing out the space for essentials. Costco Online is selling out of food and sundries as soon as they refresh the web page.

Anecdotally, I'm getting UPS packages delivered at any time between 8am - 10pm. The night driver has to use a headlamp to read building numbers.

davio• 6 years ago

A local wood-fired pizza shop has a Shopify store up now. They deliver 4 packs of frozen pizzas and give all of the profits to their employees.

It's pretty impressive that a small business like that can have a functional site up in a few days.

mywittyname• 6 years ago

I feel like it's unfair that you're getting downvoted. This seems like a genuine question. Clearly people are buying groceries and toilet paper but with so many people out of work, it may be surprising to hear that people are buying non-essentials.

JMTQp8lwXL• 6 years ago

These e-commerce sites are competing for stimulus money.

acwan932• 6 years ago

ChannelAdvisor breaks it down by industry, which is neat: https://www.channeladvisor.com/blog/industry-trends/the-impa...

bklyn11201• 6 years ago

Everything! Art prints, books, photo books, workout gear, gardening equipment, seeds, kitchen equipment. Purchasing tangible items seems to bring more joy than it did two months ago.

If anyone is looking for a good way to support an arts non-profit with their stimulus check, checkout Aperture, they are having a huge sale on books. I'm not affiliated; I just like photo books.

https://aperture.org/shop/books/library-sale/library-sale

lazerpants• 6 years ago

Purchasing tangible items seems to bring more joy than it did two months ago.

I wonder if this will remain true after Covid lock-in ends. It felt like the pendulum had swung awfully far towards people valuing experiences over items.

Also, howdy 11201 neighbor.

deepakhj3• 6 years ago

All those side projects you never had time for. I setup my turntables and ordered a new DJ equipment. Workout gear demand has gone through the roof. Anything related to cooking, such as baking ingredients are sold out.

gniv• 6 years ago

A local bakery spun up an online sales site for pickup or delivery. They sell cakes but also groceries. I bought flour and raspberries from them. When I went for pickup, they had dozens of bags prepared in the window. Clearly doing good business, all online.

avalys2• 6 years ago

Thanks for the responses. Personally all my hobbies (that cost money, anyway) are outside the house, so my discretionary spending has gone basically to zero. Good to know that some people are still spending on non-essentials though!

casperb• 6 years ago

Same here. We have provide a warehouse management system specifically for e-commerce warehouses, as SaaS. We are (one of) the biggest player in the Netherlands, and since "social distancing" started here 4 weeks ago we see Black Friday 2019 levels of orders every day, for 4 weeks straight now.

We have some customers that saw there orders come to a stop, even a few bankruptcies already. But almost all see a 30-40% bigger order flow. Some customers that sell DIY hair products see a doubling or tripling in orders per day and revenue.

When I talk to the biggest e-commerce players in the Netherlands and the top 3 parcel shippers, they all see (near) black friday levels of orders/shipments.

polote• 6 years ago

Same in France, most makeup brands are x2-x3, fashion is x1.5 to x6

In France there is no increase of unemployment, instead they are at home getting paid, I guess they have a lot of money to spend as they can't party or go the restaurant

It is actually quite visible here : https://contentsquare.com/covid-19-ecommerce-impact-data-hub...

gamblor9562• 6 years ago

France's unemployment numbers don't include the many contract workers that are not full time employees under French law. A lot of them are out of work right now and receiving nothing from the French government.

Because French law makes it so hard to fire a full-time employee, many businesses only hire workers on a part-time basis.

In contrast, most US unemployment numbers generally include all individuals seeking work, regardless of the type of employment they previously had.

Aissen• 6 years ago

Only 9 million people in furlough (with gov benefits); so a third of the working population. The economic shock is going to be brutal.

delfinom• 6 years ago

It's hoarding though. Nobody is going to be wearing that makeup right now until they can start going out. Sales are going to crater once everyone has their 4 years supply. And that too will be devastating to companies

snappieT• 6 years ago

This sounds like the lipstick effect [0] - consumers buy inexpensive luxuries when they're feeling cash-strapped. Tends to be a leading indicator of recessions (though I don't suggest that's the exact phenomenon that's happening here)

[0] https://www.investopedia.com/terms/l/lipstick-effect.asp

ceohockey60• 6 years ago

Shopify is majority GCP, minority AWS for its cloud infrastructure [0]. Curious how they are splitting workloads between these two clouds during this extended usage spike.

[0]https://www.digitalcommerce360.com/2018/03/29/shopify-picks-...

blahbhthrow3748• 6 years ago

Everything is on GCP

ssharp• 6 years ago

I hold a pessimistic viewpoint because it's a lot more insightful to look at losses than it is gains.

With so much brick-and-mortar retail shut-down, retail has to happen somewhere, so it's going to happen online. Increases in product sales online could result in net declines for the product group when you factor in the loss of B&M sales.

I think the logical result here is pretty well-represented in how some public companies in this space's stocks prices are playing out. Distribution companies are likely to prosper because their competition has decreased substantially:

* Amazon is at an all-time high * Overstock has recovered their dip * Wayfair is recovering their dip * Chewy is at an all-time high

None of this means the manufacturers who these distributors are selling are doing well, though.

On the flip side, the product categories that are down substantially online are likely facing devastating loses. They already aren't selling in retail so if ecomm is it and they're down there, it's really bad.

Outside of distributors, I think the D2C ecomm space is a huge mixed bag but likely net negative for a few reasons:

1. A lot of DTC companies play in the product categories that are seeing lower online sales

2. Most DTC companies are positioned as being accessible, but still premium. There are cheaper alternatives people may be more inclined to go with, given the economic uncertainty.

Given that, layoffs at Away, Everlane, Third Love, Stitch Fix, Casper, etc. make sense, even if online sales as a whole are up. Some of them may even need to start paying attention to unit economics now! I'd guess a lot are scaling back advertising and trying to focus on lower-cost acquisition channels to keep a tighter grip on cash flow.

m0zg4• 6 years ago

Amazon not only recovered their dip, but renewed their 52 week max several times already. And they don't even make much from online retail. To make matters more interesting, AWS seems to be _much_ busier than usual, and spot capacity is all but gone, at least at the price we were paying before. I'm not even sure why that is.

throwaway1777• 6 years ago

Because people are online more since they can’t go outside.

Leherenn• 6 years ago

I think I've seen the number +15% for traffic. Lots of video conferencing/entertainment/online shops will have increased traffic.

dmitriid• 6 years ago

AWS seems to be _much_ busier than usual, and spot capacity is all but gone, at least at the price we were paying before. I'm not even sure why that is.

With so many people inside everyone is using online services: streaming, shopping, chatting, video, audio, gaming.

Almost anything "online" is very likely to run at least something on AWS these days.

dragonwriter3• 6 years ago

To make matters more interesting, AWS seems to be _much_ busier than usual, and spot capacity is all but gone, at least at the price we were paying before. I'm not even sure why that is.

Because a lot of the online services that are seeing higher use (whether it's telework support, e-commerce, or otherwise) are, in whole or in part, hosted on AWS.

jnbiche2• 6 years ago

Amazon makes almost 50% of their annual revenue from online retail. Many billions of dollars. It's by far their biggest product category.

Yes, through accounting magic, they're making the majority of their profits via AWS, but that's part of Bezos's long-term strategy and could be changed on a dime (at the potential expense of the long-term growth he's targeting).

Top line, most of their business is from online retail, not AWS.

(edited because my original was a bit of a flame, and didn't clarify profit vs revenue distinction)

hinkley• 6 years ago

I think Stitch Fix still had some open reqs last week. What did you hear?

CodeSheikh• 6 years ago

Most of the items I have ordered from non-Aamazon small businesses during COVID-19 crisis is backed by Shopify platform. Their checkout form has a very unique layout so it is easy to tell without looking at the page source.

pavlov• 6 years ago

Is Shopify’s form the one that has awesome address autofill?

I love that because my street name is like 40 characters long, it doesn’t even fit in the legacy IT systems used by utilities.

jeromegv• 6 years ago

Yes, they do have autofill.

deepfriedbits• 6 years ago

My hunch is that Shopify is seeing surges in some areas because Amazon has been picked over for many items and can no longer adequately stock what consumers are looking for in some cases.

Many small Shopify retailers have pivoted quickly and are stocking some items that Amazon is having trouble keeping in stock.

frequentnapper• 6 years ago

question as I've been looking at Shopify direct ship: Is it viable anymore? I mean sourcing from hundreds of suppliers listed on their Oberlo service all the while competing with thousands of others who are trying to sell the exact same products as well as the suppliers themselves selling it at much lower price (same price as their wholesale price) on Alibaba, etc.

Shopify material makes it sound like you can easily sell it for 4x the cost if you spend enough on marketing, etc. Has anyone here have experience setting up dropshipping on shopify recently and making a decent profit?

acwan932• 6 years ago

There’s also the ripple effect of Shopify’s data.

We run an omni-channel API connector service for our wholesale distributors to connect Shopify/marketplaces to our own back-end on-premise ERP, and the distributors that have utilized this service are seeing record breaking numbers that are in-line with what Shopify is saying.

The downside? We launched this service less than a year ago and could’ve showcased some staggering numbers if we launched earlier. We’re trying to show the limited data we have to our customers to convince them to pivot to e-commerce while their wholesale channels are suffering.

bdcravens• 6 years ago

It'll be interesting to see if this results in much extra revenue for Shopify. They have extended their free trial from 14 to 90 days, and if a lot of the traffic is via new merchants, I assume some percentage of them may close the store once their brick and mortar opens back up. (That may be sooner than a full resolution of the pandemic - Texas for example announced retailers can all open back up in a week for pick-up orders)

jsonne4• 6 years ago

I am presently scaling a client on Shopify who started at a 30k a month ad budget. Today we scaled past $8,000 per day (So a little under 250k a month). I fully expect and we'll hit $500,000 a month in ad spend for them monthly probably in the next 2 weeks. The combination of increased screen time and major companies pulling ad dollars has cratered media prices, and in the process, created a once in a decade opportunity for DTC brands that have cash on hand and are ready to scale up production. This announcement from Shopify themselves surprises me not at all.

MuffinFlavored• 6 years ago

I'm seeing the opposite. I'm seeing clients who are able to turn off a $30k/mo ad budget and instead seeing sales double based on such an increase in organic traffic from strong SEO.

chrischen2• 6 years ago

Yep, we also got a massive spike in organic traffic as well possibly due to stay at home orders.

mparr49• 6 years ago

What are they selling?

jsonne4• 6 years ago

It's in the semi-custom home goods category. Can't get more specific than that.

strooper2• 6 years ago

I am not being judgemental, rather trying to understand how you get fish of that size with your far-from-well-designed website (from your profile), and far-from-rich marketing contents. Is that luck? Or, your lack of time to work on your own presentation?

Again, I am seriously not being judgmental, I am curious.

bowmessage• 6 years ago

You are being judgemental, even if you claim not to be. GP, I think your website is well designed, fwiw.

gogi5• 6 years ago

Incredibly judgmental.

jsonne4• 6 years ago

You aren't wrong it's been on my list forever to work on my site. FWIW some of the best media buyers I know though literally don't have websites.

I've been doing Facebook ads for 9 years. My team and I are a white label agency so we do the media buying for creative shops, designers, content marketers, etc. So I didn't land any client. I partnered with the folks that did. I got the partnership by putting out a ton of content on Youtube (Over 20 hours worth), through doing a 30 episode deep podcast on running an advertising agency, and being super helpful in a number of Facebook groups, Linkedin groups, etc. for years.

Tl;DR Content Marketing + Networking

Waterluvian• 6 years ago

I work around stuff related to the online shopping supply chain. We are absolutely seeing black Friday numbers. Really wondering if this forces people out of old habits and into new ones. Retail might never be the same.

kaishiro2• 6 years ago

We run an e-commerce platform and have seen our traffic/signup numbers jump from initial launch fairly dramatically in recent months, which we can only attribute to the current climate at the moment as we're not yet doing a hard marketing push.

gdsdfe• 6 years ago

which e-commerce platform ?

kaishiro2• 6 years ago

Link is in my profile.

codingslave• 6 years ago

Their stock is booming as well.

This is a fundamental repricing, going forwards ecommerce will become the norm as the slow adopters move onto it quicker. SHOP could be worth way more under a post pandemic economy. This isnt the same economy as three months ago, certain companies are worth more and certain ones are worth less. The money to be made in options is in understanding these repricings and exploiting them, a stock at ATH right now is a stock that may actually grow more in the future, its post pandemic outlook is only in the process of being priced in......

shakezula• 6 years ago

I think it would be really interesting to collect some data on web traffic before, during, and after this pandemic.

treyfitty• 6 years ago

Just want to add a datapoint: I run a skincare brand (www.mendskin.co) for men. No discernible difference in traffic, but a significant drop in conversions. I've stopped all Ads because the click through rate actually increased, but the conversions plummeted.

I've been hearing over the past 2 weeks that online traffic and revenue has been soaring for others, but I'm skeptical. I think it's just traditional brick & mortar shops that never had the time nor the impetus to set up an online presence now doing so. Just my 2c.

jaxn• 6 years ago

In the past 3 weeks, we have helped over 150 brick and mortar retail stores (our customer base) open Shopify stores. They are not only opening stores, but doing meaningful revenue.

Shopify has not be helpful as an organization, and their processes and red tape have been a challenge. But, it's apparently working for them.

ptrenko3• 6 years ago

Strange. I'd expect less traffic from novelty type e-com sites ...

fma• 6 years ago

I expected the same. Colleague of mine runs a local SaaS to give restaurants an online presence, including online ordering. This week orders went up 60%...because people got their $1200.

Americans don't know how to budget and will buy stuff just because they feel like it.

Edit: I did buy a pricey swing set for my 2 toddlers. But I wanted to buy one last year was denied. This lockdown convinced my wife otherwise.

ptrenko3• 6 years ago

People have it really easy there. I'm from India and the needy are getting $10 per month.

I think its $70 per month accounting for PPP, but even then the difference is massive

mhoad• 6 years ago

Might be a good time to revisit the old rumour that Rails doesn’t scale.

ksec• 6 years ago

I dont think anyone said that actually meant it doesn't scale. What they meant was it doesn't scale cheaply.

Rails is still great ( or possibly best ) for SaaS or Paid per usage model. Not so good for ad based or traffic driven per revenue model.

celloductor2• 6 years ago

that rumour died a long time ago. no need to revisit it.

TristansLady• 6 years ago

I'm quite surprised at the lack of comments about the fact that a little over a week ago, Shopify withdrew guidance and now an insider made comments during their quiet period before earnings that materially affected stock price. Elon Musk has been called out by SEC a few times for this type of activity

Shopify CTO: our platform is now handling Black Friday level traffic every day

Related Stories