Shopify saw outsized growth in 2020 and 2021 as the pandemic brought more businesses online.- But performance has slowed down with its stock plummeting 75% from its peak late last year.
- Here's a rundown of Insider's reporting on Shopify, including a brewing rivalry with Amazon.
Shopify is going through some big changes after seeing monster growth at the peak of the pandemic.
Founded in 2006, Shopify provides e-commerce tools to small and medium-sized businesses that often lack large technology budgets. The company's success accelerated in 2020, when the pandemic forced businesses to take their e-commerce operations more seriously, some for the first time, and consumer shopping habits shifted online.
The trends were apparent in Shopify's financials: after its business doubled in 2020, it reported 57% revenue growth for 2021, up to $4.6 billion. Its gross merchandise volume — or the total value of sales conducted on the platform — grew 47% year over year.
But that trend of explosive growth has recently slowed, with Shopify's revenue and GMV growth declining significantly in its most recent quarter. The company has pointed to macro trends like consumers' return to brick-and-mortar stores as reasons for the slowdown.
Shopify's stock has fallen about 75% since its high of $1,762 in the fall of 2021, prompting the company to announce changes to its stock-based approach to employee compensation. Insiders say that the past several years have brought other changes for Shopify's culture, too.
The growth challenges come as Shopify has announced plans to increase investments in its fulfillment network. Those plans include its biggest acquisition to date: a $2.1 billion deal to acquire Deliverr.
Here's a rundown of Insider's reporting on Shopify, including recent departures, cultural issues, growth ambitions, and new product announcements.
A plummeting stock has forced Shopify to reexamine its approach to pay
Shopify has long relied on stock grants as an important part of its employee compensation package. But as Shopify's stock price has plummeted in recent months, some employees have voiced concerns about the total value of their compensation.
In April, Shopify announced that it would overhaul its approach to employee compensation and give workers a raise across the board. It also hired a new chief of talent, Tia Silas, to fill a vacancy that had been left open for nearly a year.
- Inside Shopify's pay crisis: How a falling stock price, employee uproar, and the Great Resignation forced the company to overhaul its compensation
- Shopify hires new chief of talent as it overhauls pay amid an employee outcry and falling stock price
- Leaked Slack messages show Shopify plans to address pay and attrition woes: 'It's very hard to focus if you or your team is being targeted by recruiters, we get that.
- The investing startup Wealthsimple is raiding Shopify for talent as the Canadian tech scene heats up
Shopify is making big investments in fulfillment
Shopify continues to launch products that position it for future growth. The company recently announced plans to bring its fulfillment network out of the "product-market fit" phase and start to own more of the processes itself.
Shopify's moves in logistics and fulfillment come as the company sets its sights on further dominating the e-commerce market while fending off Amazon. It has also been adding new features to its consumer-facing Shop app, another area where it could compete with Amazon for shoppers' dollars.
More than 2 million merchants now have online stores through Shopify. Shopify now employs more than 10,000 people.
- Shopify is cutting contracts with warehouses across the US, marking a shift in its push to challenge Amazon's massive fulfillment machine
- New shipping features from Amazon and Shopify aim to answer e-commerce's most pressing question: When will my package arrive?
- The $20 billion reason Shopify is all in on its Shop app and hustling to create a shopping destination to rival Amazon's
- Shopify has a cult-like following from developers, and it could be the company's biggest weapon against Amazon
Shopify has lost a number of key executives
Shopify announced in April 2021 that its chief talent officer, chief technology officer, and chief legal officer would be leaving the company. The news followed the departure of Shopify's chief product officer in September 2020.
But Shopify has also had several departures in its middle ranks over the past several years. Many are leaving to invest in startups or launch their own companies. Some employees have said that CEO Tobi Lütke's management style could also be driving people away.
- Meet 34 members of the 'Shopify Mafia' who embraced the e-commerce giant's entrepreneurial spirit and launched their own companies
- Shopify is losing nearly half of its C-suite, including key tech leadership. Analysts worry about what it means for its $1 billion plan to take the fight to Amazon.
- Shopify has seen a sudden rush of departures despite massive growth. Insiders say CEO Tobi Lütke's temper and 'robotic' personality are partially to blame.
Cultural stumbles during the pandemic frustrated some employees
In 2021, current and former employees told Insider about a series of incidents in which they felt company leadership failed to properly respond to internal debate on racial issues in the summer of 2020. With protests in the aftermath of the murder of George Floyd also taking place at the time, tensions were high.
One such incident involved a conversation among staff about the uploading of a noose emoji to Shopify's Slack messaging system. As the discussions grew heated, Lütke changed a Slack channel where debate was taking place to be read-only. A few weeks after, he sent an email to managers clarifying his stance on the role that companies should play in their employees' lives.