Shopify expands AI capabilities to attract more businesses

Shopify, a leading e-commerce platform, announced on Monday the expansion of its AI-powered tools to a broader user base. This strategic move aims to increase the attractiveness of the platform and drive revenue growth in a challenging market environment.

Shopify CEO Harley Finkelstein emphasized the company’s commitment to continuous improvement, highlighting that more than 150 updates have been released. These updates are intended to create a unified platform that allows sellers to scale their business more effectively.

Shopify has seen explosive growth during the pandemic era as at-home orders led consumers to shop online. However, recent years have been marked by high inflation and uncertain consumer spending, impacting Shopify’s core customer base of small and medium-sized businesses. As a result, Shopify’s market capitalization has more than halved from its peak in November 2021 and now stands at C$112.67 billion ($82.22 billion).

At the biannual product event, the Ottawa-based company showcased the wider availability of its image editing tool, now available on smartphones. Previously limited to editing product photos online, this tool can now be used to enhance photos for promotional materials, including emails. This improvement is expected to provide sellers with greater flexibility and efficiency in their marketing efforts.

In addition to the image editing tool, Shopify has also expanded access to Sidekick, its AI-powered chatbot. Initially tested on over 2,000 users since last year, Sidekick offers valuable insights into customer behavior and helps sellers with various queries. By making these tools more widely available, Shopify aims to provide its users with a more integrated and seamless experience.

This extension comes at a pivotal time for Shopify. The company recently announced plans to invest in marketing after forecasting the slowest quarterly revenue growth in two years. The announcement led to a significant drop in the company’s shares, hitting a six-month low and reducing its market value by C$25.25 billion in a single day.

Despite these challenges, some analysts see Shopify’s recent results as an opportunity. Analysts at JPMorgan noted that Shopify’s investment in research and development far exceeds that of other companies, resulting in a comprehensive range of features and capabilities. This investment puts Shopify at the forefront of an industry with the potential for significant growth. According to JP Morgan, Shopify has penetrated only 11% of its total $60 billion service market.