Shopify achieved 26% year-over-year revenue growth in Q3 and their operating income more than doubled year over year, while their free cash flow margin expanded to 19% – leading to a 23% jump in their stock price last week. Growing while becoming more profitable is, of course, the name of the game, and Shopify’s increase in profitability is largely due to the expansion of their ‘Plus’ merchants – the larger companies on the platform. This is an indication that Shopify is positioning themselves as the central hub for all of the e-commerce industry, not just small businesses and merchants.

To me, large corporations’ growing presence on Shopify isn’t just an indication of a shift in Shopify’s strategy, it’s further indication that consumers are looking to shop outside of traditional means online – despite broader trends we’re seeing in e-commerce showing fewer and fewer marketplaces dominating the space. It’s also an indication that merchants are looking for more out of potential sales channels. Shopify’s president Harley Finkelstein contended that large brands want a partner that can “unify” their e-commerce operations – something we at Rye know firsthand. This means seamless omnichannel selling and streamlined backend operations, among other things. 

What was particularly interesting to me, as the CEO of a business whose principal mission for brands is to power them to be discoverable in an unlimited number of sales channels and digital experiences, was Finkelstein's commitment to ensuring their merchants stay visible in the age of AI – across search engines, social platforms and beyond. AI is transforming product discovery, and something we both agree on is that retailers large and small all have to ensure they’re well-positioned to be seen in this saturated landscape. Meeting the customer where they are has never been more important, or more quickly-evolving. 

Speaking of AI and e-commerce, another piece of industry news that excited me in the last couple of weeks was the announcement of ‘Perplexity Shopping’, which Perplexity is positioning as ‘a one-stop shop for researching and buying products.’ Selling products in a way that’s contextual to your platform is central to what we’re building at Rye, and I believe it is unquestionably the future of this space.

Shopify’s momentum is nothing short of inspiring, and Rye’s tech will continue to not only function in a way that’s deeply intertwined with them, but will also flourish alongside them. We’re happy we’ve chosen to build close to Shopify, and to build in an industry with such exciting tailwinds and rapidly-developing innovation.