Shopify Predicts Three Major Retail Shifts in 2014

A revolution is playing out in the retail industry and small businesses have the upper hand, according to one industry insider.

According to Shopify Chief Platform Officer Harley Finkelstein, the future of retail belongs to the entrepreneur and the creator, rather than the big-box stores. Finkelstein calls this shift the “democratization of retail.”

Shopify is a commerce platform used by more than 80,000 businesses -- digital and brick-and-mortar -- in over 100 countries. Some of the companies Shopify helps power range from Tesla Motors (NASDAQ:TSLA), Gatorade and CrossFit, to StartupThreads, DODOCase and Tattly. The Ottawa, Canada-based startup received $100 million in Series C funding this week, which it plans to put toward offline-selling platforms.

"Consumers want to buy from the makers," Finklestein says. "[The] people that are passionate about their product and the brand and the great community behind it."

Buying from the little guy online

And he may be onto something. While Amazon (NASDAQ:AMZN) topped the Black Friday and Cyber Monday traffic charts with 2.6 million visitors, according to a DeepField Blog report, Shopify wasn’t far behind. The commerce site came in third (behind eBay, and ahead of big retailers Walmart (NYSE:WMT), Best Buy and Target) with nearly 1.5 million visitors.

In 2012, Shopify stores sold $23 million during the Thanksgiving shopping weekend, compared to $63 million during the same period in 2013. Finklestein predicts all this marks the shift toward small business preference that will dominate 2014.

Shopify markets itself as an easy way for merchants to sell products online, or at retail and pop-up locations. Some of its product offerings for retailers range from an online storefront, payment solutions to accept credit cards and a point-of-sale system.

‘Popify’ finds no boundaries between offline and online

Finklestein says part of the company’s recent transition into offline stems from an increasingly unified shopping space. In contrast to some other industry experts, Finklestein says omni-channel shopping, where consumers use all online, in-store and mobile options to browse and compare products before making a purchase, is not necessarily the way of the future.

Shopify recently carried out two pop-up experiments to observe the way shoppers interact with products in a physical location. The “Popify” test found “traditional brick-and-mortar” shoppers are all different – some try out products and buy them in-store, while others go home to purchase them online. So retailers who view their physical stores and online stores as separate pieces of the puzzle are missing the point.

“The barrier between offline and online is artificial,” he says.

It’s all about the consumer, stupid

A reason for the fizzling of the offline/online separation, and another trend Finklestein predicts for the New Year, is a heightened awareness of consumer preference.

And what do consumers want?

A recent Accenture study found that half of consumers believe the best thing retailers can do to improve shopping is to better integrate the offline and online shopping experience. The same study found that 89% of consumers want retailers to let them shop in the way that is most convenient for them.

According to Finklestein, retailers of today should take this into account while planning for tomorrow.

“We are in the midst of something right now … in ten years we’ll be able to say that’s when retail changed,” he says.