Shopify - relevance to THG Ingenuity offering2 Jan 2023 14:47
FT Article on line this afternoon - of interest to the BB
‘Shopify is seeking to fill a lucrative gap in marketing data left by Apple’s privacy crackdown by offering retailers a new way to target potential customers through the world’s largest ad platforms.
Harley Finkelstein, Shopify’s president, told the Financial Times, that after striking alliances with Meta and Google this year, its “Audiences” marketing tool was a key area of focus at a time when an ecommerce industry slowdown was forcing the $46bn company to make cutbacks in other parts of its business.
The new tool allows retailers to pool their customer data and upload it to Meta and Google’s advertising platforms. Marketers are then able to target ads at “lookalike” customers who might be more likely to buy their products because they bought similar items from another retailer.
The system is designed to skirt Apple’s rules against tracking iPhone users, which have put a multibillion-dollar dent in the online advertising industry this year, and compete with Amazon’s fast-growing ads business.
Though Shopify Audiences is not yet a significant money-spinner for the ecommerce company, it could offer a much-needed growth opportunity at a time when looming recession and cash-strapped consumers are squeezing retailers.
“Especially right now, merchants want to be able to find more customers,” said Finkelstein.
Shopify’s stock price increased almost fivefold between the start of the pandemic and November 2021, as lockdowns forced retailers and consumers to turn to ecommerce in unprecedented numbers. However, its shares have lost three-quarters of their value since last year’s peak, leaving them close to where they were before the pandemic hit.
Tobi Lütke, Shopify’s founder and chief executive, conceded this summer that he had overestimated the pace of ecommerce growth after lockdown restrictions eased. The Canada-based company announced about 1,000 redundancies, or 14.5 per cent of its workforce, in July, largely sales and support staff.
Amazon is one beneficiary of Apple’s new policy, because its ad targeting is based on “first party” data: information that an advertiser holds about its own customers. Apple allows targeting based on these details but not “third party” data gathered from other companies’ sites.
Shopify’s pitch is that it can offer retailers similar targeting capabilities as Amazon but beyond the confines of the Seattle-based retailer’s online store, including through Instagram, Google search results and YouTube.
https://on.ft.com/3VESJp2
Sign In
Follow the stocks
