E-commerce solutions provider Shopify will invest a reported $1 billion in a nationwide US fulfilment network offering 2-day deliveries for SME customers to compete with Amazon.
The multi-channel commerce technology platform, which claims to power more than 800,000 retailers around the world, yesterday announced the debut of Shopify Fulfillment Network, describing it as “a new way to get orders to your customers easily and quickly”. It aims to offer 2-day shipping to 99% of the US by the end of this year.
“Our smart inventory-allocation technology, powered by machine learning, predicts the closest fulfillment centers and optimal inventory quantities per location to ensure fast, low-cost delivery. After your customer completes checkout, Shopify Fulfillment Network takes care of everything else, while putting your brand and customer experience front and center,” the Canadian company declared.
“We plan on spending over $1 billion to build and operate the Shopify Fulfillment Network over the next few years,” chief product officer Craig Miller told the company’s developer conference in Toronto, according to a report in the Financial Post. Without mentioning Amazon by name, Miller said that SMEs selling on large marketplaces “want the package arriving in a box that has your logo on it, not theirs”.
He told the Canadian newspaper that Shopify planned to run a few warehouses but wanted to work with logistics partners who would operate most warehouses and provide transportation and delivery services.
“I’m fairly certain we will not own trucks for the foreseeable future,” he said. “We are a software company and that’s kind of what we do best, and we will partner and work with other people that have trucks and things like that, so that way we don’t have to worry about the world of trucking and all that.”
Shopfiy announced that qualifying merchants in the U.S. can now apply for early access to the Shopify Fulfillment Network that will have “a dedicated network of fulfillment centers that will ensure timely deliveries, and lower shipping costs, for a superb customer experience”.
The company did not disclose the number or locations of these dedicated fulfilment centres. But Miller presented a map indicating a possible hub in the Chicago region and other major locations in the North-East, North-West, California, Texas and South-East.
The company already operates a ‘Shopify Shipping’ programme, enabling retailers to select shipping methods and offer their customers a choice of delivery services at checkout.
In terms of delivery partners, Shopify works with the US Postal Service, UPS and DHL Express in the USA, as well as Canada Post in its home country.
