Shopify Inc. is unveiling new point-of-sale technology, dubbed POS Go, which will first launch in the United States this week and expand to other countries in the coming months.Shopify/Supplied
Shopify Inc. SHOP-T is unveiling new hardware for brick-and-mortar stores in a bid to expand its retail network during an e-commerce slowdown that has sharply impacted the Ottawa company’s stock price and profitability.
The point-of-sale technology, dubbed POS Go, will first launch in the United States this week and expand to other countries in the coming months. It is part of a strategic shift at Shopify to blend its online platform of nearly two million merchants worldwide with services for offline retail.
POS Go is a mobile payment terminal with a barcode scanner. It accepts tap, swipe and chip cards through a built-in credit and debit card reader. A touch screen displays sales, analytics and inventory metrics, which are automatically integrated across all channels with every purchase.
The payment machine is comparable to those from Shopify’s competitors, such as Square Inc. and Lightspeed Commerce Inc. But the new hardware emphasizes how Shopify is adapting to slowed e-commerce growth and adding to its in-store products.
Arpan Podduturi, vice-president of product at Shopify, said shopping habits are evolving quickly around the world, bouncing back to pre-COVID-19 trends. “Retailers need technology that keeps them nimble,” he said.
Online spending took off at the beginning of the pandemic. Consumers were stuck at home because of public-health restrictions and flush with cash they weren’t spending on discretionary expenses, such as vacations. As an e-commerce leader, this gave Shopify a big boost. However, that has since largely reversed.
Shopify’s share price has plunged by almost 80 per cent since its peak in late 2021. The company posted a big second-quarter loss and warned of further losses in the third and fourth quarters of 2022. Gross merchandise volume, a figure that shows the value of sales through Shopify’s platform, has also stalled.
But in the first half of 2022, Shopify said it saw sales made by merchants using the company’s point-of-sale system grow by nearly 60 per cent. That’s why it will bank on that growth with POS Go, Shopify said.
The last time Shopify unveiled a new point-of-sale device was shortly before the pandemic. Prior to that, there hadn’t been a sizeable update since 2013, when the company first launched retail hardware.
“With offline retail all the way back, we’re investing heavily in hardware that’s fit for the fast-growing, most innovative retailers in the world,” Mr. Podduturi said of POS Go.
Shopify has made several moves recently to find new avenues of growth. Last month, it launched Shopify Collabs, a new tool to connect digital content creators with merchants, brands and businesses on the company’s platform.
Earlier in the summer, Shopify unveiled a variety of partnerships with platforms such as Google, Twitter and YouTube. This expanded upon its previous e-commerce agreements with TikTok, Facebook, Instagram and Pinterest.
Shopify has also aimed to bridge the gap between online and physical retail. For example, merchants can sync their store inventories with Google, allowing consumers to search for items in stock at stores closest to them.
The e-commerce downturn has rattled Shopify for much of the past year, and was cited as the reason for its massive staff reduction this past summer.
In July, Shopify announced it would lay off more than 10 per cent of its work force, or roughly 1,000 people. Tobias Lutke, the company’s chief executive, told staff he had wrongly believed e-commerce would keep soaring at the same rate as early in the pandemic. But that was a miscalculation, Mr. Lutke said.
In early September, Shopify extended layoffs with a small number of cuts while boosting pay for its remaining employees. The company plans to slow hiring for the remainder of 2022.