Shopify Aims to Use AI to Give Merchants Competitive Edge

Shopify, a leading provider of software and services to online sellers, has been turning to artificial intelligence (AI) to give its merchants a competitive edge.

When the company reports results on Thursday (Nov. 2), investors will be looking to see if these tools will drive growth and revenue, Reuters reported Wednesday (Nov. 1).

According to Shopify Chief Financial Officer Jeff Hoffmeister, the company’s AI tools are like a “superpower” for sellers, according to the report. These tools are specifically designed to assist merchants in making important decisions about their merchandise mix and geographic expansion.

One of the key AI products offered by Shopify is Shopify Magic, which was announced in July, the report said. This suite of AI-powered offerings includes tools for product descriptions, virtual assistants, blog posting, and email campaigns. Additionally, Shopify has introduced an AI app called Sidekick, which helps sellers make decisions regarding inventory, promotions and marketing.

While analysts predict a slight deceleration in sales of Shopify’s merchant products compared to last year, the introduction of AI tools like Shopify Magic aims to be a selling point for larger clients, per the report. Shopify’s long-term strategy is to attract larger merchants to its platform willing to pay higher prices for its services.

However, some analysts express concerns about the adoption of AI tools, particularly among merchants experiencing slowing demand, according to the report. These merchants may be hesitant to experiment with new technologies. Nonetheless, as long as Shopify can demonstrate the productivity enhancements associated with AI, there will be opportunities to monetize these tools in the long run.

This report comes when Amazon and Walmart leverage AI tools to woo third-party sellers to their platforms. These companies are using technology to improve not only the shopping experience for their customers but also the selling experience for sellers.

For example, Amazon Ads introduced a generative AI solution that is aimed at equipping advertisers to enhance their ad campaigns and create more engaging content, PYMNTS reported Friday (Oct. 27). Meanwhile, Walmart has reportedly been exploring ways to improve the convenience of shopping by deploying AI and augmented reality (AR) technologies.