Small Businesses Turn to Shopify

Shopify Supports the Ecommerce Boom

Millions of small businesses across the country have had to move their operations online during the pandemic. Many of them have turned to Shopify (SHOP), an online storefront platform.

Overall, ecommerce sales in the US rose by 37% to hit $200 billion during the second quarter. During this same period, the number of new stores set up on Shopify jumped by 71% compared to the previous quarter. Shopify’s revenue almost doubled during the quarter, hitting $714.3 million.

New Offerings for Small Businesses

Shopify was founded nearly 15 years ago. It helped larger brands like Vera Bradley (VRA), Kylie Cosmetics, and Allbirds reach consumers for some time. However, when the pandemic hit, Shopify made significant changes to its business strategy. The Ottawa-based company quickly became a go-to resource for small businesses—many of which had never sold products online before the pandemic forced them to close their physical locations.

Shopify launched a free 90-day trial for new clients. It also created online tipping, gift-card options, and other capabilities designed specifically for small businesses. The company is making plans to roll out other offerings soon.

Looking Ahead

Other online platforms for small businesses have also seen growth during the pandemic. For example, Etsy (ETSY), an online craft marketplace which has become a popular place for people to buy and sell cloth face masks during the pandemic, added 4 million new users just during the month of April this year. Amazon (AMZN) also offers resources for small business owners selling goods online, and has seen an increase in people using these services.

Analysts are concerned about small businesses’ ability to withstand the pandemic and economic downturn. They are also worried that, as ecommerce becomes a growing part of retail, large companies like Amazon and Walmart (WMT) will become even more dominant. However, for the moment at least, many small businesses are finding creative ways to stay afloat, and platforms like Shopify are stepping in to help.

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