Consumers’ Click-and-Mortar™ Expectations Shape Shopify’s Future

Digital may have changed the face of retail, but consumers continue to want to shop in stores, demanding that even the most eCommerce-centric companies such as Shopify adapt.

The commerce platform shared Wednesday (May 8) in an investor presentation accompanying its first-quarter 2024 financial results that it saw gross merchandise value (GMV) from its offline segment grow 32% year over year, describing this area as a “key growth lever in 2024 and beyond.”

On a call with analysts, Shopify Chief Financial Officer Jeff Hoffmeister spoke to the opportunity to leverage its point-of-sale system to bring more digital capabilities into the in-store journey.

“We’re going to be able to migrate more and more functionality to point of sale, and so over time, the attach rate and some the opportunities overall are going to going to increase,” Hoffmeister said. “The point of sale, the retail piece, for us is primarily a payments piece.”

He said the company is taking offerings such as the option to pay in installments “from our core online business and adding them to the offline,” unifying the digital and physical experience.

Consumers around the world want to engage with the physical store at some point in their shopping journey. The PYMNTS Intelligence report, the “2024 Global Digital Shopping Index: The Rise of the Click-and-Mortar Shopper and What It Means for Merchants,” drew from a survey of nearly 14,000 consumers across seven countries to understand their omnichannel shopping behaviors. The study found that more than 7 in 10 consumers prefer to visit stores at some point in their shopping journey.

Specifically, 33% prefer to shop in stores without digital aids, 25% prefer to shop in stores with the assistance of digital technologies, and 14% prefer to place orders digitally for on-site pickup.

Shopify President Harley Finkelstein highlighted “email capture at offline checkout” as a digital feature that the company is integrating into its in-store offerings, enabling more effective marketing going forward.

To that point, consumers want the kind of personalization that this kind of technology can enable. The PYMNTS Intelligence report “Personalized Offers Are Powerful — but Too Often Off-Base,” which drew on responses from more than 2,500 U.S. consumers, found that 83% of shoppers were interested in receiving personalized offers.

Additionally, as many merchants have seen softness in consumer spending amid ongoing financial challenges, Shopify offered its own view of the consumer, maintaining that purchasing even in discretionary categories has held up.

“There’s some talk around the state of the consumer. We think the consumer remains resilient,” Finkelstein said. “We’re seeing consumers buying their favorite brands that they love and feel affinity to.”

Consumers, for their part, report they are cutting back. The PYMNTS Intelligence report “New Reality Check: The Paycheck-to-Paycheck Report: Pessimism About Pay Rises Offsets the Effect of Falling Inflation” found that 60% of consumers have cut down on nonessential spending. Additionally, the study noted, 83% of consumers are at least somewhat concerned about current and near-future economic conditions.