Shopify unveils new point-of-sale hardware, expanding beyond its online platform
Shopify Inc. SHOP-T is unveiling new hardware for brick-and-mortar stores in a bid to expand its retail network during an e-commerce downturn that has heavily impacted the Ottawa-based company’s share price and profitability.
The point-of-sale technology, dubbed POS Go, will first launch in the United States this week and will expand to other countries in the coming months. It’s part of a strategic shift at Shopify to combine its online platform of nearly two million merchants worldwide with services for offline retail.
POS Go is a mobile payment terminal with barcode reader. It accepts touch, magnetic and chip cards via an integrated credit and debit card reader. A touchscreen displays sales, analytics and inventory metrics, which are automatically integrated across all channels with every purchase.
The payment machine is comparable to those of Shopify’s competitors, such as Square Inc. and Lightspeed Commerce Inc. But the new hardware highlights how Shopify is adapting to slowing e-commerce growth and adding to its in-store products.
Arpan Podduturi, vice president of product at Shopify, said shopping habits are changing rapidly around the world, bouncing off pre-COVID-19 trends. “Retailers need technology that makes them agile,” he said.
Online spending took off at the start of the pandemic. Consumers were stuck at home due to public health restrictions and money they weren’t spending on discretionary expenses, such as vacations. As a leader in e-commerce, this has given Shopify a big boost. However, that has largely reversed since.
Shopify’s stock price has plunged up almost 80% since its peak in late 2021. The company posted a big loss in the second quarter and warned of further losses in the third and fourth quarters of 2022. Gross Merchandise Volume, a figure that shows the value of sales through Shopify’s platform, has also to the point of death.
But in the first half of 2022, Shopify said it saw sales made by merchants using the company’s point-of-sale system increase by nearly 60%. That’s why it will capitalize on that growth with POS Go, Shopify said.
The last time Shopify unveiled a new point-of-sale device was shortly before the pandemic hit. Prior to that, there hadn’t been a major update since 2013 when the company first launched retail hardware.
“With offline retail since the beginning, we are investing heavily in hardware suitable for the world’s fastest growing and most innovative retailers,” Mr. Podduturi said of Point of sale.
Shopify has recently taken several steps to find new avenues for growth. Last month he launched Shopify Collabsa new tool to connect digital content creators with merchants, brands and businesses on the company’s platform.
Earlier this summer, Shopify unveiled a variety of partnerships with platforms such as Google, Twitter and YouTube. This expanded its previous e-commerce deals with TikTok, Facebook, Instagram and Pinterest.
Shopify also aims to bridge the gap between online and physical retail. For example, merchants can sync their store inventories with Google, allowing consumers to search for in-stock items at stores closest to them.
The e-commerce slowdown has rocked Shopify for much of the past year and has been cited as the reason for its massive staff cuts last summer.
In July, Shopify announced that it would lay off more than 10% of its workforce, or about 1,000 people. Tobias Lutke, company director general directortold the staff that he had wrongly believed e-commerce would continue to soar at the same rate as at the start of the pandemic. But that was a miscalculation, Mr Lutke said.
Early September, Shopify extended layoffs with a small number of cuts while increasing the salaries of its remaining employees. The company plans to slow hiring for the rest of 2022.