
Shopify CTO: our platform is now handling Black Friday level traffic every day - i_am_viet
https://twitter.com/jmwind/status/1250816681024331777
======
ssharp
I hold a pessimistic viewpoint because it's a lot more insightful to look at
losses than it is gains.

With so much brick-and-mortar retail shut-down, retail has to happen
somewhere, so it's going to happen online. Increases in product sales online
could result in net declines for the product group when you factor in the loss
of B&M sales.

I think the logical result here is pretty well-represented in how some public
companies in this space's stocks prices are playing out. Distribution
companies are likely to prosper because their competition has decreased
substantially:

* Amazon is at an all-time high * Overstock has recovered their dip * Wayfair is recovering their dip * Chewy is at an all-time high

None of this means the manufacturers who these distributors are selling are
doing well, though.

On the flip side, the product categories that are down substantially online
are likely facing devastating loses. They already aren't selling in retail so
if ecomm is it and they're down there, it's _really_ bad.

Outside of distributors, I think the D2C ecomm space is a huge mixed bag but
likely net negative for a few reasons:

1\. A lot of DTC companies play in the product categories that are seeing
lower online sales

2\. Most DTC companies are positioned as being accessible, but still premium.
There are cheaper alternatives people may be more inclined to go with, given
the economic uncertainty.

Given that, layoffs at Away, Everlane, Third Love, Stitch Fix, Casper, etc.
make sense, even if online sales as a whole are up. Some of them may even need
to start paying attention to unit economics now! I'd guess a lot are scaling
back advertising and trying to focus on lower-cost acquisition channels to
keep a tighter grip on cash flow.

~~~
m0zg
Amazon not only recovered their dip, but renewed their 52 week max several
times already. And they don't even make much from online retail. To make
matters more interesting, AWS seems to be _much_ busier than usual, and spot
capacity is all but gone, at least at the price we were paying before. I'm not
even sure why that is.

~~~
jnbiche
Amazon makes almost 50% of their annual revenue from online retail. Many
billions of dollars. It's by far their biggest product category.

Yes, through accounting magic, they're making the majority of their profits
via AWS, but that's part of Bezos's long-term strategy and could be changed on
a dime (at the potential expense of the long-term growth he's targeting).

Top line, most of their business is from online retail, not AWS.

(edited because my original was a bit of a flame, and didn't clarify profit vs
revenue distinction)

~~~
doingmyting
Amazon makes substantially more from AWS than its retail segment. Retail
revenue is higher but revenue does not equal profit. For instance last quarter
AWS revenue was 13% compares to retail but it contributed 52% of operating
income.

~~~
kolmogorov
Those are accounting tricks

~~~
lmm
Citation needed. It seems pretty common-sense that retail would be lower-
margin than digital services.

------
jsonne
I am presently scaling a client on Shopify who started at a 30k a month ad
budget. Today we scaled past $8,000 per day (So a little under 250k a month).
I fully expect and we'll hit $500,000 a month in ad spend for them monthly
probably in the next 2 weeks. The combination of increased screen time and
major companies pulling ad dollars has cratered media prices, and in the
process, created a once in a decade opportunity for DTC brands that have cash
on hand and are ready to scale up production. This announcement from Shopify
themselves surprises me not at all.

~~~
strooper
I am not being judgemental, rather trying to understand how you get fish of
that size with your far-from-well-designed website (from your profile), and
far-from-rich marketing contents. Is that luck? Or, your lack of time to work
on your own presentation?

Again, I am seriously not being judgmental, I am curious.

~~~
jsonne
You aren't wrong it's been on my list forever to work on my site. FWIW some of
the best media buyers I know though literally don't have websites.

I've been doing Facebook ads for 9 years. My team and I are a white label
agency so we do the media buying for creative shops, designers, content
marketers, etc. So I didn't land any client. I partnered with the folks that
did. I got the partnership by putting out a ton of content on Youtube (Over 20
hours worth), through doing a 30 episode deep podcast on running an
advertising agency, and being super helpful in a number of Facebook groups,
Linkedin groups, etc. for years.

Tl;DR Content Marketing + Networking

~~~
steve_adams_86
It looks good to me.

Putting out relevant content and networking is where it's at, too. Even if
your website actually was bad, you'd probably be fine.

I used to get a lot of work for web design without a website. I had a resume
with good references and urls leading to good work samples. That's the stuff
that counts. There was no shortage of jokes about not having a website though,
and everyone thought they were the first person to tell me 'the cobbler's
children go barefoot', haha.

------
casperb
Same here. We have provide a warehouse management system specifically for
e-commerce warehouses, as SaaS. We are (one of) the biggest player in the
Netherlands, and since "social distancing" started here 4 weeks ago we see
Black Friday 2019 levels of orders every day, for 4 weeks straight now.

We have some customers that saw there orders come to a stop, even a few
bankruptcies already. But almost all see a 30-40% bigger order flow. Some
customers that sell DIY hair products see a doubling or tripling in orders per
day and revenue.

When I talk to the biggest e-commerce players in the Netherlands and the top 3
parcel shippers, they all see (near) black friday levels of orders/shipments.

~~~
polote
Same in France, most makeup brands are x2-x3, fashion is x1.5 to x6

In France there is no increase of unemployment, instead they are at home
getting paid, I guess they have a lot of money to spend as they can't party or
go the restaurant

It is actually quite visible here :
[https://contentsquare.com/covid-19-ecommerce-impact-data-
hub...](https://contentsquare.com/covid-19-ecommerce-impact-data-hub/)

~~~
Aissen
Only 9 million people in furlough (with gov benefits); so a third of the
working population. The economic shock is going to be brutal.

~~~
user5994461
Don't think so for France. The state gives too good benefits and it already
announced it will be maintaining paychecks for all unemployed.

However that's billions over billions of new debt taken, and it's gonna be
brutal to pay back in the next decade.

------
brd
I've been talking to as many companies as I can during all of this. The surge
is not evenly distributed but a lot of companies are seeing surprising upticks
in online traffic and sales.

The big question though is how long will this last? I think the general
population has not yet appreciated the possible severity of the ensuing
economic downturn.

A lot of trade publications are already starting to sound the alarms on how
ugly this could get. A return to 2008 era aggressive discounting is likely
going to happen. Retail partners may be crippled by the quarantine. A lot of
brands are going to be assailed from many directions simultaneously, it's
going to hurt.

~~~
trimbo
> I think the general population has not yet appreciated the possible severity
> of the ensuing economic downturn.

My fear as well. The swiftness and ferocity of this downturn is like nothing
ever, AFAIK. 22 million out of work in 4 weeks. Many are unlikely to get their
jobs back. So while certain companies are seeing upticks due to logistics of
the lockdown, I don't think it's safe to assume it would continue long after
SIP ends.

~~~
ben_w
> Many are unlikely to get their jobs back.

Their original job? Sounds plausible. Any job? Surely that would be a
political choice for their respective governments? Unless there’s a reason we
can’t repeat the famous infrastructure jobs programs from a century ago - I’m
no economist, so I genuinely don’t know, but Hoover Dam Mark 2 sounds good to
me.

~~~
dmix
> Hoover Dam Mark 2

Is this like the Hoover dam but with 100x longer environmental reviews and 10x
more expensive due to special interest grifts that then cripple the investment
before it fails 10yrs later? And the only people who made money were a bunch
of private consultants hired by the government to do the reviews and executive
staff the pseudo-market company behind it?

I haven't heard of a single major infrastructure project that hasn't followed
that trajectory. Reading about Obama's two solar projects are a good starting
point. But nothing beats Keystone XL.

It's no wonder it hasn't happened and it's not for lack of trying or tax
dollars being spent. Even here in Canada it's the same story every time and we
have a far more receptive political base for spending the tax money. So I'll
never be convinced that's the real hurdle.

~~~
ben_w
If the point is to be a jobs program, wasting money and massive overspend are
a feature.

~~~
dmix
That was my point. It won’t end up in workers hands unless they actually start
work on the project. Otherwise it will go to a small group of consultants, gov
connected executives, and most importantly endless amounts of lawyers and
activism groups.

------
ceohockey60
Shopify is majority GCP, minority AWS for its cloud infrastructure [0].
Curious how they are splitting workloads between these two clouds during this
extended usage spike.

[0][https://www.digitalcommerce360.com/2018/03/29/shopify-
picks-...](https://www.digitalcommerce360.com/2018/03/29/shopify-picks-google-
for-e-commerce-site-hosting/)

~~~
blahbhthrow3748
Everything is on GCP

------
treyfitty
Just want to add a datapoint: I run a skincare brand (www.mendskin.co) for
men. No discernible difference in traffic, but a significant drop in
conversions. I've stopped all Ads because the click through rate actually
increased, but the conversions plummeted.

I've been hearing over the past 2 weeks that online traffic and revenue has
been soaring for others, but I'm skeptical. I think it's just traditional
brick & mortar shops that never had the time nor the impetus to set up an
online presence now doing so. Just my 2c.

------
CodeSheikh
Most of the items I have ordered from non-Aamazon small businesses during
COVID-19 crisis is backed by Shopify platform. Their checkout form has a very
unique layout so it is easy to tell without looking at the page source.

~~~
pavlov
Is Shopify’s form the one that has awesome address autofill?

I love that because my street name is like 40 characters long, it doesn’t even
fit in the legacy IT systems used by utilities.

~~~
jeromegv
Yes, they do have autofill.

------
acwan93
There’s also the ripple effect of Shopify’s data.

We run an omni-channel API connector service for our wholesale distributors to
connect Shopify/marketplaces to our own back-end on-premise ERP, and the
distributors that have utilized this service are seeing record breaking
numbers that are in-line with what Shopify is saying.

The downside? We launched this service less than a year ago and could’ve
showcased some staggering numbers if we launched earlier. We’re trying to show
the limited data we have to our customers to convince them to pivot to
e-commerce while their wholesale channels are suffering.

------
codingslave
Their stock is booming as well.

This is a fundamental repricing, going forwards ecommerce will become the norm
as the slow adopters move onto it quicker. SHOP could be worth way more under
a post pandemic economy. This isnt the same economy as three months ago,
certain companies are worth more and certain ones are worth less. The money to
be made in options is in understanding these repricings and exploiting them, a
stock at ATH right now is a stock that may actually grow more in the future,
its post pandemic outlook is only in the process of being priced in......

------
frequentnapper
question as I've been looking at Shopify direct ship: Is it viable anymore? I
mean sourcing from hundreds of suppliers listed on their Oberlo service all
the while competing with thousands of others who are trying to sell the exact
same products as well as the suppliers themselves selling it at much lower
price (same price as their wholesale price) on Alibaba, etc.

Shopify material makes it sound like you can easily sell it for 4x the cost if
you spend enough on marketing, etc. Has anyone here have experience setting up
dropshipping on shopify recently and making a decent profit?

------
bdcravens
It'll be interesting to see if this results in much extra revenue for Shopify.
They have extended their free trial from 14 to 90 days, and if a lot of the
traffic is via new merchants, I assume some percentage of them may close the
store once their brick and mortar opens back up. (That may be sooner than a
full resolution of the pandemic - Texas for example announced retailers can
all open back up in a week for pick-up orders)

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jaxn
In the past 3 weeks, we have helped over 150 brick and mortar retail stores
(our customer base) open Shopify stores. They are not only opening stores, but
doing meaningful revenue.

Shopify has not be helpful as an organization, and their processes and red
tape have been a challenge. But, it's apparently working for them.

------
kaishiro
We run an e-commerce platform and have seen our traffic/signup numbers jump
from initial launch fairly dramatically in recent months, which we can only
attribute to the current climate at the moment as we're not yet doing a hard
marketing push.

~~~
gdsdfe
which e-commerce platform ?

~~~
kaishiro
Link is in my profile.

------
Waterluvian
I work around stuff related to the online shopping supply chain. We are
absolutely seeing black Friday numbers. Really wondering if this forces people
out of old habits and into new ones. Retail might never be the same.

------
mhoad
Might be a good time to revisit the old rumour that Rails doesn’t scale.

~~~
ksec
I dont think anyone said that actually meant it doesn't scale. What they meant
was it doesn't scale cheaply.

Rails is still great ( or possibly best ) for SaaS or Paid per usage model.
Not so good for ad based or traffic driven per revenue model.

------
TristansLady
I'm quite surprised at the lack of comments about the fact that a little over
a week ago, Shopify withdrew guidance and now an insider made comments during
their quiet period before earnings that materially affected stock price. Elon
Musk has been called out by SEC a few times for this type of activity

------
q92z8oeif
traffic != sales

The whole industry is experiencing a surge in online-window-shopping. Amazon
is probably seeing a few blackfridays increase.

~~~
ambicapter
I work for an ecommerce business and can attest that orders are up in
accordance with the headline.

~~~
guac
Same here. We're seeing very out-of-season numbers. In fact we saw another
massive uptick this week that was suspiciously timed with the stimulus direct
deposits going out (Tuesday/Wed morn).

------
avalys
Really? What are people buying?

~~~
brianwawok
Good story here

[https://www.visualcapitalist.com/shoppers-buying-online-
ecom...](https://www.visualcapitalist.com/shoppers-buying-online-ecommerce-
covid-19/)

Food, workout items, entertainment. A lot of categories are through the roof!

~~~
matwood
> workout items

I wonder if gyms will ever come back from this. Gold's announced yesterday
they are permanently closing 30+ locations. Even when people go back out, gyms
were never the cleanest places to start with. Some places will require masks
for the near future, so how does that work at a gym? Now that I'm been forced
to finish my home gym, I'll likely cancel my membership once things open
again.

~~~
macintux
I’m worried about the YMCA. They do an admirable job of serving the community
and poorer populations, but they apparently do so (at least here) by
discounting on income.

If they lose any significant portion of the people who could afford to buy
home equipment, can they still serve those who can’t?

~~~
deepakhj
I still keep my YMCA membership at the moment. YMCA and Boys and Girls Club
had a huge impact on my childhood.

~~~
macintux
Yeah, I'm fine with my small contribution to the cause; it's been very
important to me over the last few years, so I'm not in any hurry to terminate
my membership.

Whether I'll use it again once it's open, though, is a much trickier question.

------
ptrenko
Strange. I'd expect less traffic from novelty type e-com sites ...

~~~
fma
I expected the same. Colleague of mine runs a local SaaS to give restaurants
an online presence, including online ordering. This week orders went up
60%...because people got their $1200.

Americans don't know how to budget and will buy stuff just because they feel
like it.

Edit: I did buy a pricey swing set for my 2 toddlers. But I wanted to buy one
last year was denied. This lockdown convinced my wife otherwise.

~~~
ptrenko
People have it really easy there. I'm from India and the needy are getting $10
per month.

I think its $70 per month accounting for PPP, but even then the difference is
massive

~~~
revendell_elf
Citation please. I haven't heared about it.

~~~
ptrenko
Sorry not $10, more like $7

Source: [https://www.bloombergquint.com/coronavirus-outbreak/not-
rs-5...](https://www.bloombergquint.com/coronavirus-outbreak/not-
rs-500-indias-poor-need-at-least-rs-3000-a-month-george-mason-university-
researchers)

>India announced a Rs 1.7 lakh crore economic relief package >ensuring cash
transfers of Rs 500 a month, and food >security. However, the package is less
than one percent of >the country’s GDP.

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shakezula
I think it would be really interesting to collect some data on web traffic
before, during, and after this pandemic.

