- Shopify announced that it has acquired Deliverr, a logistics startup for $ 2.1 billion.
- This is the largest acquisition in Shopify’s history and is expected to create an “end-to-end logistics” platform for millions of merchants.
- Developing logistics is considered an important goal to boost Shopify’s profit and a key piece in its fight against Amazon
The deal is worth more than 2 billion USD
Deliverr, an e-commerce startup based in San Francisco, California, was acquired by Shopify for $2.1 billion in cash and stock. Specifically, Deliverr will combine with Shopify Fulfillment Network (SFN), a service that enhances Shopify’s merchant inventory management capabilities. Deliverr’s technology uses predictive analytics and machine learning to lease warehouse space and uses warehouse fulfillment departments to pick and pack e-commerce orders, predicting demand. on products based on geography and other variables. The platform then uses analytics to “pre-locate” items close to areas of need, stocking items across a network of warehouses and sorting centers, and then determining where to go. Best delivery to ship to customer.
Tobi Lütke, Shopify founder and CEO, says, “Our goal is not only to level the playing field for businesses, but also to turn their size and agility into their superpower. Together with Deliverr, SFN will provide millions of growing businesses with access to a simple, powerful logistics platform that enables them to delight their customers”.
Logistics expansion strategy
Shopify also recently acquired 6 River Systems, a company that has developed cloud-based software and mobile robots specifically designed for shipping, for $450 million. As such, the combination of SFN, 6 River Systems and Deliverr will form a broader logistics unit within Shopify, promising to bring the best benefits and experiences to their customers.
Express shipping is becoming increasingly essential for merchants as the pandemic affects almost every aspect of the supply chain and as more and more retailers migrate online. According to a PwC survey in 2021, 41% of shoppers are willing to pay extra for same-day delivery. On the other hand, only 20% of consumers are willing to ignore delivery disruptions. That shows that fast and on-time delivery is a pressure on retailers in the past period.
For Shopify, developing logistics is considered an important goal to boost the company’s bottom line. Plus, it’s also an important part of the battle against Amazon as Amazon recently launched Buy with Prime, allowing Amazon Prime members to shop from merchant stores and get free shipping. fees and return benefits.
Over the years, retailers have begun to thrive on their delivery services, but it only really became a battle after the pandemic began, when digital commerce sales increased massively. There is an interesting rivalry heating up between Amazon and Shopify, with Amazon recently breaking into Logistics through Buy with Prime and Shopify certainly aiming to capture a larger share of the online retail opportunity. The Deliverr acquisition will add value to retailers already using Shopify to power their carts. If Shopify can integrate Deliverr’s products into its existing platform, it promises to provide more security for online retailers. This makes it possible for them to make sales despite any disruptions ahead.
Khanh Huyen Nguyen