Déployer la puissance du commerce unifié : une conversation exclusive entre EY et Shopify

0:02
Welcome everyone and thank you so much for taking the time out of your busy day today to join us, especially at this time of year.

0:08
My name is Brian Peterson, I'm a partner at EY here in Toronto and sit within our telecommunications, media and technology practice.

0:15
I also happen to Co lead Ey's global Shopify alliance.

0:19
We have an exciting hour with you today.

0:22
Last month, EY released Apos market study highlighting the benefits of adopting a unified approach to commerce.

0:29
Today, I'm pleased to be hosting a panel discussion that will be digging deeper into some of those insights and with a number of key contributors of that research.

0:37
Patrick Joyce from Shopify, Corey Natt from Pepper Palace, and Vincent Lee, another EOI partner who led some of that work, are all here today to to have this conversation with us before I actually go and have our panelists introduce themselves directly.

0:52
Just a just a quick note, we have AQR code at the end of the presentation that you can just take a snapshot of and that will allow you to download the actual report.

1:01
So if the conversation is intriguing to you, if you want to know more about some of the resources that we did, just click on that QR code in a minute or right here if you want, and you can download that report.

1:11
With that, I'm going to go around the visual table and have our guests introduce themselves.

1:16
I'm going to start with Vincent, then Patrick, and then over to you, Corey.

1:19
So Vincent.

1:21
Thanks, Brian.

1:23
I'm a partner at with with EY as well focused on tech technology specifically and the intersection of technology and consumer.

1:30
I spent a considerable amount of my career round of topics like TCO and I've had the pleasure of being involved in this study.

1:39
So happy to be here and based out of Toronto, so Canadian as well.

1:46
Patrick, over to you.

1:48
Hi, I'm Patrick.

1:49
I am a Director of Engineering at Shopify.

1:51
I lead engineering and product management for Shopify POS and I am from Maryland, right outside of Washington, DC and excited to be here and for you all to get to talk to one of my favorite merchants, Corey as well.

2:06
Corey.

2:09
Thanks, Patrick.

2:10
I'm Corey.

2:11
I'm the Director of Marketing at Pepper Palace.

2:13
I can handle everything marketing related, online sales related and Shopify related at the company currently based out of Charlotte, NC and super excited to be here today to talk more about it.

2:27
All right, great.

2:28
So we're ready.

2:28
So we're going to jump jump right into this.

2:30
So the retail landscape is evolving as customer expectations shift towards a unified shopping experience, both online and in store.

2:39
This has compelled retailers to adopt A holistic approach to commerce that really focuses primarily on the customer and the customer journey.

2:47
This shift has made unifying commerce a central priority for a lot of retailers, medium sized and enterprise.

2:55
As I noted in our introduction, over the past several months UI has developed a report to better understand the continued disruption and evolution of the retail retail landscape.

3:04
Excuse me, as it pertains to both online and offline retail, we're really curious and we were really curious about the unified commerce's approach to managing these processes.

3:16
The next stage in the evolution of retail is clearly unified and retailers are quickly evolving to adopt this idea from a Shopify perspective.

3:25
Patrick, why do you think the shift is happening now?

3:29
I think it really comes down to customer expectations.

3:32
The standard has been set where our customers expect to have an amazing in store experience, to have an amazing online experience, to have those two experiences really be one, be part of one overall unified experience where you know what you're doing in store is aware of the transactions that you've made online and vice versa.

3:52
And with those expectations comes, you know, a lot of challenge to provide that level of of to meet those customers expectations and to do it in what is, you know, a very challenging competitive environment at all times.

4:07
And so having a product that provides all those things for you that works really well out-of-the-box across all of your channels at a a very strong customer, I mean a very strong cost of ownership is really important because it's the only way you're going to be able to, you know, for mid markets and even large enterprises to compete with the largest enterprises in the world who are trying to fight with you.

4:34
Well, you know, as part of the report, we introduced and talked about something called the retail maturity Model, which is a framework that can be used by any retailer to generally understand how mature they are from a technology perspective.

4:47
In this framework, Omni channel, as you can see here, and unified commerce are two distinct phases in a retailer's journey, both having distinct signatures from a complexity perspective.

4:58
Corey, help us understand a little bit your lived experience as Pepper Palace matured from single channel to unified?

5:08
Yeah, so Pepper Palace, we really started off as a very fragmented business where nothing really spoke to each other.

5:13
And the first step for us was really getting our online and in store to kind of get that connection between them growing as a company though we added more sales channels in more touch points for our customers both online and in a retail side of things.

5:29
So that's where where Shopify came into play of kind of being that one unified source of information to really control the experience that our customers got at every different touch point of ours just to be sure that no matter where somebody was shopping, they were still getting that Pepper Palace experience that they expect from our company.

5:49
As a experience based retailer, the experience in all of our different touch points really matters.

5:54
And that's what it came down to for us to shift over to that that mindset.

5:59
That's super interesting.

6:00
Patrick, you know, any thoughts to add to Corey's experience?

6:03
I mean, what are the key indicators, you know, that you would be looking for from a retailer to know sort of when it was, you know, when's this appropriate sort of to start thinking about unified?

6:15
I mean, I think almost at all the stages of the retailer journey, it's important to be thinking of how everything is going to work together because that's what the base expectation is.

6:22
Now.

6:22
I think what we've seen in the past is a lot of what's on the slide right now, I'm showing you starting a single channel, then you add a second channel and they don't really talk to each other.

6:30
And then you do a ton of work to stitch together with middleware and integrations, somewhat of an Omni channel experience.

6:37
And what we've worked really hard to be able to do with Shopify is have a unified experience from day one.

6:43
And as you add additional channels or as you move to Shopify and move your multiple channels to Shopify, they work together from the beginning.

6:50
And so that progression that Corey was talking about of, you know, first we had this channel, then we need to get our online and our retail stores to talk together.

6:59
And then we're adding a lot of retail stores is something that we've seen a lot of our merchants go through.

7:03
And we have a case of the app right now from a jury who's a really cool jewelry jewelry company who moved to Shopify relatively recently.

7:14
And I think one of the things that they said that I'm super proud of is that, you know, they have a tech team, but they have a small tech team.

7:24
And they want to be spending their time thinking about how to make the best jewelry experience in the world and instead of thinking about the things that are sort of common across all types of retail.

7:33
And I believe what they said was, you know, 90% of what you're going to need is going to be there for from Shopify out-of-the-box.

7:41
But for that, you know, 10% or 5% or whatever you need to do.

7:46
There's multiple ways for you to then be able to customize that experience and like you sort of get the the best of both worlds and take advantage of, you know our very large engineering team working everyday to give you the best commerce product in the world and then sprinkle a little bit of your magic on top of it.

8:06
In our report, we we also introduced this concept of a commerce operating system, which we defined as an integrated suite of software capabilities that support a retailer's commerce strategy.

8:15
So ACOs provides the necessary infrastructure to centralized pretty much all components of a retailer's operations, including inventory management, data and analytics, and of course, customer management, among a few other things as well.

8:28
As you can see, this operating system ultimately serves as the backbone to any retailer's unified commerce strategy.

8:36
Patrick, how does Shopify's solutions and capabilities fit into the concept of a commerce operating system?

8:44
Yeah, I think I jumped the gun a little bit and talked a little bit about that in the last one of like we have all of these things, they work amazingly well together.

8:51
It's not even that they work well together, it's that they are part of a single system in a single unified platform.

8:56
But then the thing that distinguishes an operating system from just a suite of applications or an application is the ability to build on top of it.

9:03
And so for all of these things that you see around the edge of the commerce operating system, we have AP is we and methods of extensibility.

9:10
So if you have a very specific use case that you want to do for your order management system or you have gotten NetSuite configured exactly how you want it and that's what you want to use for your ERP and even some of your fulfillment, then you can do that.

9:27
And every April like we have Waze and built in integration so that all those things can connect in and then everything else flows through the commerce operating system of Shopify.

9:37
So what we know about your inventory in NetSuite, we know about it and the point of sale system so that your stores have accurate and up to date information on where your all of your inventory is and you can make sales that you wouldn't be able to make otherwise.

9:50
Because if this hoodie is out of stock in the large that I need, but you have it in another store or you have it in your warehouse, then your sales associates can still make that sale because of that unified commerce operating system.

10:05
Got it.

10:06
And I actually want to use Corey and his experience has been an example of that as well.

10:10
So, so Corey, grounding us a little bit, would love to understand how Shopify supports Pepper Palace again through this concept of a, of a commerce operating system.

10:21
Yeah, I think a little bit about what Patrick talked about is, you know, you have all these connections to the Shopify account, but I think that's the biggest power for us in the way that Shopify supports us the most is really having that one source of data, that one data center that that can feed to all of our different channels that we that we have.

10:40
So, you know, that has, you know, speed up some of our processes, added some efficiencies in our reporting and decision making.

10:50
We're able to get real time information from any of our points and any of our points are able to get real time information from from that one data source.

10:57
So you know, in, in, in terms of how Shopify supported us, it's really with that one connection, that one source of truth for all of our different channels.

11:08
Got it.

11:08
OK, great.

11:09
So, so already we've covered covered the concept of of unified commerce and, and unified retail.

11:15
We talked a bit about the commerce operating system.

11:17
We're going to shift gears a little bit now and talk a bit more about or a bit about the role of Apos system as an enabler to, to unified and to some of this construct of, of a unified commerce operating system and A, and A, and a commerce operating system.

11:33
So I don't think we need to, to spend a ton of time on this.

11:35
However, just to make sure our audience is fully aligned on definitions, we define APOS system as a hardware and software solution that really enables business transactions through debit, credit and and cash and other sort of payment types.

11:48
Of course, not all POS solutions are created equal.

11:51
Retailers looking to future proof businesses have to really think about the right POS solution for them, ensuring that they align to the business goals of the of the business, the strategies, growth ambitions, as well as whether or not they support some of these concepts like unified commerce.

12:07
So, Corey, can you explain a little bit why you chose Shopify's POS system as, as the one for, for Pepper Palace?

12:18
Yeah, more than more than happy to.

12:20
So really Pepper Palace was looking for a better online store to boost our online traffic, something that would connect to our current or our previous POS system through some middleware.

12:32
During the discussions we found that Shopify did have a point of sale system and really I I'd be lying if I didn't say the main thing that it came down to and joining over to Shopify, it was the cost of it.

12:44
So we did get that Omni channel experience between our retail stores and our online.

12:48
But with the phase of Pepper Palace and where we're at in terms of growth, we will we saved around six figures move making that move to Shopify POS and unifying everything under that one platform.

13:00
So that was really what, what drove the, the decision to move to Shopify.

13:06
There are some efficiencies that we learned customer experience that we learned later on down the road.

13:11
But that number one key factor of moving over to Pepper, Pepper Palace over to Shopify was cost in that Omni channel experience that we were looking for.

13:20
Got it.

13:21
Patrick, You know, listening to Corey talk a bit about their experience, you know, curious to to get your perspective on Pepper Palace's use of your POS system and how it supports Shopify's POS strategy generally speaking.

13:34
Yeah, I mean, our point of sale strategy is to make sure we have the best point of sale in the world for, you know, to run a store and like the going back to the unified commerce theme that we're talking so much about.

13:47
And what Corey was talking about is that your customers expect by a unified experience, whether they are shopping on the Pepper Palace website or whether they've come into one of the Pepper Palace stores And we have built Shopify point of sale and Shopify together.

14:03
They there's not a bunch of metal wares that you're stitching together.

14:07
And that means that you can configure things in one place and they're going to work across multiple channels.

14:13
And you can configure them so that if you only want something to work online and will only work online, but there's a lot of things that, you know, you're, if you want to have an automatic discount apply to a certain, certain customers, you can set that up and it will automatically apply online and it will automatically apply in store as long as soon as that customer has identified themselves.

14:34
And so, yeah, like I, I'm very happy that, you know, Corey was looking at the value that we provide and it made it a no brainer.

14:44
And then I'm even more happy that as they got in and started using it, they realized all the things that it enabled them to do.

14:48
And that they have a single view of the customer and they have a single view of their orders.

14:52
And they can process online returns in store where they can turn them into exchanges so they make more money and more sales instead of having those go back as returns.

15:02
And that all sort of stems from having it really be a single system as opposed to a bolted on point of sale to or a bolted on ecommerce system, but one commerce operating system that gives you multiple channels that you can sell through.

15:16
And so one of the things you mentioned that I want to drill into a little bit is this idea of single view the customer, because I think it's a real, it's a real value driver, I think to the Shopify ecosystem, generally speaking.

15:29
Corey, you know, how is the single view of the customer that you've sort of been able to sort of assess based on, you know, Shopify E com and Shopify POS?

15:38
Like how is the single view of the customer really translated into some of the loyalty programs that that you've been able to create?

15:45
Yeah.

15:45
So I think the benefit of that single view of the customer is it doesn't matter where they shop with Pepper Palace, it's all in that one spot.

15:54
So our rewards program, we really launched it to get people into our ecosystem and learn more about them and where they're shopping.

16:02
And our rewards program was a really big benefit of that.

16:05
We were able to get customer information whether they shopped online on our mobile app, in any of our retail stores.

16:10
And then from that they could then go to another retail store, they could go to our online site, our mobile app and shop under that same account and get rewarded for it.

16:21
So the rewards program really unlocked customer information and behavior and also allowed us to target certain channels that we wanted people to shop at in order to push them and drive over to a retail store location or shop on our mobile app that we're running an exclusive sale on for our rewards member.

16:38
So it just opened up a new form of marketing for Pepper Palace and it spread across all of our channels.

16:45
Yeah, super compelling.

16:47
OK, so we're gonna, we're gonna move now to sort of one of the main themes within the report, which is this idea of, of total cost of ownership.

16:55
Before we do that, just a note to the audience, please.

16:58
If you have questions, just submit them in the browser.

17:02
You, there's a, there's an area there you can actually submit questions.

17:04
We're kind of collecting those.

17:05
So at the end of the conversation, we can, we can have the panelists speak to those If, if, if of interest.

17:11
OK, so TCO, so in the report, we, we leverage a number of different UI frameworks to, to really assess several POS solutions in the market.

17:19
And in doing so, we actually gained a pretty robust understanding of how Shopify specifically enables unified commerce capabilities in order to create value while at the same time lowering average TCO.

17:32
It was a really interesting finding in the report with a lot of data around that.

17:36
So if you do demo at the report, you'll, you'll, you can read a, a ton about it.

17:41
So before jumping into our findings, though, Vincent, over to you.

17:44
Given everything we've talked about so far, you know, how does TCO really play into a retailer's ability to kind of be resilient in a, in a retail environment that's consistently changing?

17:57
Thanks, Brian.

17:58
I mean, TCO as a concept is pretty simple, right?

18:01
It's, it's the total cost throughout the life of owning that particular solution.

18:07
And so TCO is the combination of everything that's being said by Patrick and Corey.

18:13
It's the measurable impact to your business and how does it impact your bottom line.

18:18
So it includes things like upfront costs, the implementation, the ongoing costs, which includes obviously the subscription costs and the middleware.

18:27
We, we, we, we, we want to be able to take that concept a little bit further because just given how fast technology is innovating, all the trends around unified commerce, retailers are looking beyond just costs.

18:41
They want to understand what the implementation means in terms of driving that improved customer experience.

18:47
What is the value enabled from the technology solution and what why is that important?

18:52
Well, you know, I thought we talk about the velocity of technological change, we talk about the unified customer experience.

19:00
And then you you add on top the macroeconomic climate.

19:03
The, the only certainty really these days is volatility.

19:07
And so customer experiences are changed, preferences are gonna change and continue to evolve.

19:12
You need to be able to rapidly adapt to that.

19:16
And so when you look at comparing the cost of solutions, it's increasingly more critical for you to ensure that it's apples to apples how you use to measure TCO is lining up, you know, kind of saying cost A, cost B, cost C, which one's lower?

19:33
It becomes more difficult to do that when the operating models themselves, the business processes are transforming and combining into one.

19:41
And so, you know, when you look at the TCO as a concept, it's increasingly important to look forward and understand what the operating model is in store online and what are we trying to achieve in an integrated fashion from the implementation of this technology and how does that impact the costs and benefits going forward.

20:02
And then you net them across and understand what solution has the highest financial impact.

20:08
So that, that that's, that's why TCO is important.

20:11
Yeah, got it, got it.

20:12
So this idea of TCO plus plus the value that a solution can can add really does support sort of this idea of resiliency.

20:19
So, so retailers can can really think about their strategies more robustly.

20:23
So it's not just looking at costs, it's looking at, at the value proposition of a solution and trying to trying to understand, you know, some of the, some of the hard, hard numbered value that that that creates as well.

20:34
So super interesting.

20:35
So, so obviously total cost of ownership is is super important in terms of retailers purchasing decisions.

20:41
Vincent, I want to come back to you again a little bit and and have you elaborate on sort of the operational efficiencies we explored in the report that actually impact TCO?

20:52
Yeah, sure.

20:53
So you know, if you think about traditional TCO or you know the cost side of the equation on the left side of the page here are the upfront costs.

21:02
The upfront and ongoing costs is what you would traditionally think about as TCO.

21:06
So if you, if you look at the ongoing costs, the subscription ongoing costs are substantial part of the total cost of ownership.

21:16
Then traditionally speaking you have disparate systems and so the middleware makes up a large portion of the the ongoing cost as well.

21:22
And then you add to that the third party applications required to support things like inventory, orders, loyalty, which adds increased complexity and cost.

21:32
And on top of that unit then have to train individuals.

21:36
And we'll get to that later on how to use those systems as you implement different ones.

21:41
But you know, if we're looking at the value creation side of TCO, that's where it really gets interesting.

21:48
So operational improvements driven by having that unified commerce environment include things.

21:54
Let's just start in store.

21:55
So in store it's unified experience, easy to use interface.

22:00
You're going to be able to transact faster, have retail staff be able to support and spend more time with customers, less time behind the counter figuring it out.

22:10
As we said earlier, some of the things that are pretty uniform across every retail.

22:17
So less time doing administrative tasks, more time with the customer.

22:21
Secondly, if you look within the the store, you're going to have the right goods at the right time because you have the unified data behind behind you to be able to identify where you need products, when and where behind the scenes you have people in a traditional sense having to reconcile produce reports, cross reference, correct errors in all of disparate systems.

22:46
If you have unified commerce, these these tasks are they go away.

22:51
And so the productivity improvement both in the front front of the house, at the, within the rear 4 walls of the retail store and in the back end are, are either eliminated or mitigated.

23:03
And finally, you know, if you combine all these things together, it's, it's, it's hard to quantify, But if people are spending time on elevated tasks, thinking about the customer, thinking about the customer experience, there's got to be a loyalty brand and a customer experience impact as well.

23:21
But, but in terms of hard operational improvements really is headcount inventory and, and just speed the transaction, right.

23:28
So, so super specific.

23:30
You know, we, we found in the report that retailers using Shopify POS actually reported a 22% reduction in TCO, which is which is super interesting and I think you know, very compelling.

23:43
Patrick, what features or strategies from a Shopify perspective really Dr.

23:48
operational efficiencies within within sort of this TCO discussion?

23:53
Yeah, I mean, I think there's several things that have been mentioned already.

23:55
1 is that there is an like our goal and what I think we achieve is that there is an insane amount of value that comes with Shopify immediately.

24:06
And so you need to spend a lot less money on stitching together a bunch of different solutions.

24:13
And even if you are adding in a different solution for one part of your stack, it is a lot easier to pull that in.

24:20
The cost of owning that is a lot is a lot lower.

24:23
So I was talking to a merchant a couple weeks ago who has migrated to Shopify recently and they were talking about on the previous point of sale system, they had a third party gift card provider and by moving to Shopify, they were able to replace that and save on, you know, A5 figure monthly cost.

24:38
Because this is something that just comes with Shopify for free on any Shopify plan, any Shopify plan structure.

24:46
And those add up because there are so many things like when we go back to the earlier slide that had the, you know, commerce operating system in the middle and all of the things that go into providing that amazing customer experience that is table stakes for your customers.

24:59
At this point.

25:00
We give you a lot of those.

25:02
The other thing that I we focus a lot on is the cost of training and getting up and running.

25:08
So I was in the King of Prussia Mall, which is one of the just malls on the East Coast of the United States a couple of weeks ago.

25:16
And I was popping in and, you know, saying hello to some of our merchants, some of our merchants who have recently joined Shopify.

25:23
And I was just asking staff like, hey, how's it been?

25:25
How's the transition been?

25:27
And one of the, one of the, the sales associates in one of the stores was like, oh, I love Shopify.

25:32
I really feel like it's taking over the mall.

25:34
Like everyone sort of understands how to use it now.

25:35
It's so easy and so quick to get up and running and like, that's what we aim for.

25:39
And that adds up as your onboarding staff, as you're launching new locations and all that together results in, you know, a way more more value for you, so you can spend your time making, you know, the best shopping experience for your customers.

25:56
And I I want to move to Corey a little bit just to just to hear it right from, you know, a a retailer that that's actually been able to benefit from some of this.

26:04
So so Corey, again, just just top line up for us.

26:07
What were some of the TCO benefits that you've realized by implementing shellfight E com and and POS?

26:14
Yeah.

26:14
So a lot of what Vincent mentioned was kind of across the board what we saw for Pepper Palace in terms of savings.

26:21
You know, our our accounting team really took a a liking to the system with that one spot to pull all the reports from.

26:28
It saves them about 20 hours in reconciliation.

26:32
The the biggest thing for us though is what Patrick was kind of mentioning is the the third party systems that we had to have on and then the middleware that we had to connect all of our different systems together.

26:44
So we were able to cut about 60% of that out when moving to Shopify.

26:49
I think the two biggest parts for us though is like Patrick mentioned that other jewelry company Pepper Palace is still, you know, relatively small in terms of, you know, head count for, for what we have for our systems.

27:02
So we're able to really cut it down to one IT person on our staff.

27:05
Shopify handles a lot of the other, you know, IT support with their, their helpline that they have available.

27:11
So that was a big, big savings for us, right?

27:14
There is really only having one person and then the last thing is really the the set up time, the POS cost and the training on the POS.

27:22
As Patrick mentioned, we saw something very similar at Pepper Palace.

27:25
It used to take us about two weeks and a decent cost for setting up and training on this new system.

27:33
We were able to cut that down to a week or less for most of our retail stores.

27:37
So that kind of leads into what Pepper Palace funds is the most valuable part of TCO.

27:44
The savings are great, but the value creation is kind of what we really latch onto.

27:48
When we moved over to Shopify, we were in a hyper growth phase of our company.

27:52
We were at 50 store locations.

27:54
2 years later we had we were at 150.

27:57
So that was really opening one to two stores and even sometimes three stores a week.

28:02
So being able to cut that two weeks down to that one week time was really significant for Pepper Palace and that's where we saw really the most value in in TCO.

28:12
Moving over to Shopify, the secondary part is a little bit what we discussed on earlier is that one unified space for customer data.

28:21
So with that and being able to connect all of our touch points to that one data source, we were able to increase our marketing list and our customer list by 1000% since moving to Shopify.

28:32
Hey.

28:32
And Corey, I don't think you've mentioned this and if you did, I'm sorry if I missed it, but but just maybe tell the audience the number of retail locations that that that you have and that you've rolled this out too.

28:42
Yeah, so we we rolled it out to at 1.162 retail locations.

28:48
Got it.

28:48
OK.

28:49
So and you were saying, you know, average a week or so to implement POS per per retail location.

28:54
Is that correct?

28:56
Yeah, correct.

28:57
So we have during during our hyper growth phase, we opened 60 retail locations in 30 weeks.

29:03
So that was about an average of two a week that we opened up.

29:07
Yeah, that's amazing.

29:08
Great.

29:08
OK, perfect.

29:09
Thank you.

29:10
OK, so we're going to talk a bit about about implementation in just a second for the audience.

29:15
We're about halfway through the conversation.

29:17
So we're going to be answering some of the questions shortly, have a bit more content to get through that I'm sure is going to spur a ton of other interest and and and questions from you.

29:26
So implementation, implementation and deployment is, is obviously one of the most challenging parts of any sort of transformation if if you want to call it that.

29:37
Vincent, you know, based on our study, can you please provide some more sort of specific details around some of the challenges that retailers face when implementing POS based on our study and and sort of talk a little bit about, you know, how Shopify can kind of streamline some of that.

29:55
Yeah, sure.

29:56
So I mean, I think implementation and upfront costs really can I'll, I'll tie it to some of the things that being that Corey just hit on.

30:04
But I'll answer your question first, which is, you know, I think upfront the discovery process and, and I'm really understanding the, the configuration development requirements is typically a very lengthy process.

30:17
And as you kind of, you know, I know Corey mentioned that they didn't have a ton of locations.

30:21
But as you go up market and particularly with enterprise, it becomes increasingly challenging because processes potentially not only vary by, by channel, they vary by geography that they, they, they are highly customized.

30:34
And often times, you know, employees churn and for business, no one knows why business processes even exist.

30:41
And so the whole documentation process and discovery is, is often a, a lengthy and very critical process.

30:48
And what having unified commerce enables is be able to hit a reset button, say, well of these processes, what do we actually still need?

30:57
And then you kind of start a little bit from, from, from bottom up rather than trying to work backwards from what you currently have currently have around current state.

31:05
And so the importance of shrinking that configuration development process and making it less about customization and replicating what it currently is and thinking more in the future about what it can be is, is, is enabling retailers to be able to save on upfront costs.

31:23
2nd commode and I think Patrick hit on was is training on on boarding.

31:27
It's, you know, when you have disparate systems and highly complex customized processes, the whole change management process becomes a huge burden on the business.

31:37
And there often is change fatigue as you start to roll out additional modules and additional capabilities to try to accelerate time to value.

31:46
And then third, data migration, if you think about kind of a non unified commerce environment, data migration costs are substantial and you're talking about having to cleanse data, combine data sets and think about what the right structure is gonna be going forward.

32:01
You can minimize that with having one source of truth.

32:04
And so in combination, we said it a few times, but the time to value really is on the flip side of reduced upfront cost.

32:14
Yes, you reduce upfront cost.

32:15
What does that mean?

32:16
It enables you to create value quicker.

32:19
And so that's what retailers are really looking for in 2024.

32:25
So retailers that we surveyed reported that Shopify offers a like significant savings up to 7% we found in deployment costs alone.

32:35
And and that's sort of in addition to, you know, value that Shopify brings relative to, you know, a sort of robust ongoing support service.

32:45
Patrick, you know, how has Shopify enabled lower cost of overall in terms of deployments and what, what support does Shopify provide retailers as they as they look to migrate to to your POS solution?

33:00
Yep.

33:02
So we've talked about just making sure that we are obsessed with making onboarding training super easy by having very clear and easy to understand software.

33:12
I think the for as merchants are migrating to Shopify, we have an internal launch team that can support them through that process.

33:19
We also work with an array of partners who can help with some of the more complex and merchant specific changes.

33:28
So if you have something above and beyond getting Shopify set up, there's something very custom that you want.

33:33
We have a a team of partners who are dedicated to doing that and we can connect merchants with that so that they have support as they're doing their implementation.

33:44
And then the last thing is I think just a general relentless dissatisfaction with no matter how good what we have is, we think it can be better.

33:54
So recently we have our point of sale terminal, which is our card reader with the big beautiful customer facing display integrated into it that looks really nice and can display your branding.

34:06
And setting that up is not the thing that you do all the time.

34:08
You set it up when you get a new device, but it was taking about 3 minutes and 30 seconds as we were looking at the data of like how long it took to get through the onboarding process, get it paired properly, get it set up.

34:19
That's a one time thing.

34:19
That's the only thing you're doing all the time.

34:21
But that is not meeting our standard for what Amazing is.

34:24
And so we've rolled out an update where like we were able to simplify that process, pull some steps out, make it much, much, much, much faster.

34:33
And now we're saying it takes about 37 seconds.

34:35
And we're still actually not satisfied.

34:36
We think we can get even better.

34:38
And we apply that to every part of the experience.

34:40
We are constantly using, talking, using our software, talking to merchants, seeing something that, oh, that's like a little bit of friction.

34:47
We can make that even better.

34:49
And that adds up in compounds over time.

34:53
That's, that's super interesting.

34:55
I think we'll talk a bit more about Shelf 5's approach to to development and innovation toward towards the end of the talk.

35:00
Corey, just before we move on, you know, I know you talked a little bit about, you know, the POS roll out to, I think at the time 160 plus retail locations, you know, in, in terms of the transition to Shelf 5 POS.

35:11
Is there anything else that's worth mentioning or have you sort of covered it already in sort of some of the comments you made earlier?

35:17
No, I definitely think there's something that I can add to it.

35:20
And it's honestly one of my favorite things to talk about when anybody asks me about Shopify.

35:25
So I, I come from a marketing background.

35:27
I'm good at, you know, selling things, but I don't have any coding experience.

35:32
You know, I, I'm not proficient when it comes to to coding and setting things up, but what Shopify allowed me to do is really by myself with Shopify onboarding team really helping with the data migration.

35:46
I was able to set up our entire POS system and online store by myself over a course of one to two months.

35:53
So kind of one of the things I, you know, kind of tip my hat to, it's by far my favorite thing to talk about is they made it so easy that, you know, a marketing guy like me could set it up.

36:04
Really other than that, though, rolling out to the stores was a fairly easy process too.

36:09
If you have a phone, you know how to run Shopify just like any other application is it's very intuitive on how to set it up.

36:16
And, and like I mentioned before that really cutting it down to one week or less of training time and setup time really helped us out.

36:24
So we were able, with a team of five, be able to roll it out to all of our store locations in two months time.

36:30
We thought it was gonna be a much longer process, but just seeing how easy it was for people to pick it up, easy for them to use and really the small text stack that's needed to run it really made that very quick and painless roll out for us.

36:46
And I want to be remiss if I, if I didn't say that, I think it's a really, it's a really good example of sort of how, how simple it can be.

36:54
I think one of the things that I want to talk a bit about or just mention at least, is that it also depends on how complicated, you know, the, the retailer is and the back end systems are.

37:03
So, you know, we also, EY have done multiple POS implementations as well for, for fairly large retailers.

37:09
I mean, it can get complicated.

37:10
I think Shopify absolutely simplifies the process and adds a ton of value in terms of how we think about traditional POS implementations.

37:18
But again, I think it's also important to say that, you know, as the environment is complex and the back end system is complex, you know, often times there, there are unique capabilities and, and, and skills that are required.

37:26
So I think just so the audience knows that it's not always going to be probably one or two days to to implement.

37:31
It's definitely easier, but depending on the complexity, you know, there, there are, you know, there are sometimes, you know, unique processes and work flows that that have to be accounted for.

37:40
And, and you know, sis like like EY and, and others really do do a lot of that work as well.

37:47
So in a, you know, in, in the report, we also sort of looked at direct costs associated with TCO, you know, in addition to to the value created by Shopify.

37:56
And, and I think we covered that sort of at length.

37:59
One of the things Vincent that I wanted to talk or have you talk about really is, is how how Shopify and and unified commerce solutions really add to retailers ability to drive top line growth.

38:12
So can you just talk about a little bit about sort of the impact, for example, GMV or what have you by implementing unified commerce?

38:20
Yeah, sure.

38:20
And, and, and, and trying not to repeat some of some of Corey's stories here, but you know, I, I, I think lived experience is the best.

38:27
But, you know, I think it's, it's quite simply having more real time access to customer information is extremely important.

38:37
And so, you know, enhanced the enhanced impact of marketing efforts is amplified by having a unified source of data across all of your channels, which allows you to understand when people are making purchases, when they're dropping off, when they, when how inventory is moving in store relative to how it's moving online.

38:56
And then being able to make targeted campaigns and marketing efforts around that data.

39:03
If you think about here in Canada, we, we just finished Black Friday, we're heading into the holiday season and, and the shopping doesn't really typically end up at, at, at on Black Friday.

39:13
It continues on for another month.

39:14
And so being able to react to that, have the right discounting methodology and roll that out very quickly becomes extremely powerful for, for, for, for retailer.

39:26
And So what that does, what that does is it increases football into the stores, it increases traffic online.

39:32
It actually it increases average order size and so average transaction value.

39:37
And of course, as we're seeing with some of the results retailers are reporting overall increased lifetime value of the customer.

39:45
But the most important thing is I think retailers are looking at the are, are really realizing it's important that the frequency of customer interaction is, is, is what's driving that revenue growth and unified commerce and having a single source of truth is at the center of that.

40:03
In the research, we also found that, that Shopify provided up to I think in some cases 8.9% uplift in sales.

40:10
So kind of speaking to your, to your point, Vincent, Patrick, you know what are some of the specific features that Shopify's POS solution?

40:18
You know, has that that directly lead to, to GMV growth do you think?

40:23
Yeah, I think there's really 2 main areas.

40:25
The 1st is that we help you make sales that you wouldn't be able to make otherwise because you have that unified view of and your inventory.

40:32
So if you don't have the shirt in the right size or the right color, you're still a while you have that that that customer in your store talking to your sales associate, they are very easily able to look up and see that it is at the store, you know, in the city of the next city over or that it is in your warehouse and you can ship it to with the customer directly.

40:50
And that is a thing that can be done with Omni channel experiences where you're stitching together multiple multiple systems.

40:58
But it's very hard.

40:59
Whereas it is like from the moment you were using Shopify available to you.

41:03
A quick anecdote on how that can get even like go even farther.

41:08
We had a employee of Shopify who on Friday messaged me and I said they were out doing some Black Friday shopping and they went to Aloe Yoga, who is one of who uses Shopify.

41:19
And they had a gift card that they had received as a present and they wanted to make a purchase.

41:23
And they went and they picked out some things and they went to check out and they realized that they had left the gift card in the car.

41:28
And so they asked the sales associate to, you know, set their set their inventory aside and then run back to the car and go get the gift card and come back so that they could pay for it.

41:36
And they got back to the car and they realized they did not leave it in the car, they left it at home.

41:41
And so they called back to the store because they're not monsters.

41:45
And they told them, hey, I'm really sorry, I don't actually have the gift card.

41:48
I'm going to go home.

41:49
I'm not going to be able to make this purchase.

41:51
And the sales associate just immediately said, oh, would you like us to e-mail you that card so you can check out online when you get home and we can just show it to your house.

41:58
And that's what they did.

42:00
They went home, they used the gift card, they were able to make the purchase because it's unified system.

42:03
It's still actually tracked to the sales associate who had helped them and allocated the revenue to the to the store.

42:10
And it all just worked naturally.

42:12
And like, that's a sale that would have very easily been lost before.

42:15
And the second thing that we're really excited about is how we help you know your customers better.

42:20
And so we've mentioned before having unified view of the of of the customer, helping you to identify more of your retail buyers.

42:27
So online, you know who the purchaser is, they have to put in a name, they have to ship it somewhere in person.

42:32
A lot of transactions end up happening where you actually aren't sure exactly who the customer is.

42:36
It's not associated with customer record.

42:38
And one of the things we've been able to do is help merchants get more of their sales associated with that unified customer record.

42:44
One of the ways that we can do that is that we have the shop pay network.

42:47
And if you have used Shop Pay before and you go into a retail store that is using Shopify POS and you tap or insert your credit card that you've previously used with Shopify POS, I mean, with Shopify, with even another Shopify merchant, we're able to actually match that and give the customer the option of receiving their receipt by e-mail and at that moment opting into marketing as well.

43:07
And if you already have a customer with that e-mail address on file, it automatically matches and creates 1 unified customer record that you can then continue to market to after the fact.

43:16
So making sales that you would have made otherwise and helping you know who your customers are so that you were developing a relationship with them as opposed to a single transaction with them.

43:24
Yeah, I mean super powerful.

43:25
And I think, you know, the clients that we work with that have implemented Shopify, you know, talk a lot about, you know, how important some of some of that is to, to, you know, their, their own success as, as a retailers and, and their growth as a retailer.

43:41
And, and so with that, I, I do want to go back to Corey and just say, you know, Corey, I don't know if you're comfortable with this, but I don't put you on the spot.

43:48
Would love for you, if you can, to talk a bit about like some of the GMV uplift that you guys actually experienced when you went to to Shopify's POS solution.

44:00
Yeah, I'll share, you know, some of the information on that and some of the other, you know, topics that we really saw growth in, in, in value in, you know, kind of what Patrick said at the very end that that customer information that was probably the most helpful impact to Pepper Palace making better decisions and our our marketing opportunities based on customer behavior, their spending habits, who they are.

44:23
So collecting that into that one unified piece and growing our our marketing efforts was really a lot of the value.

44:30
But what it comes down to as well is our online, you know that's where we saw the biggest impact besides our retail growth from you know 50 stores to 160.

44:40
But online getting more of that customer information, having an easier platform where we can get people back to purchase more.

44:47
We've we've increased our sales over 400% since launching on Shopify.

44:51
And what we've found is we can attribute about 10% of that to that unified experience of maybe a first touch point was in one of our retail store locations getting them back online to repurchase again.

45:05
Yeah, that's, I mean, again, I do like that story.

45:09
You've you've told us that before.

45:10
And I think it's just, it's a just a really great example of, you know, benefit to the customer, benefit to to you as the retailer.

45:17
And I think it's it's it's super powerful.

45:20
And I also kind of speaks to this idea of sort of unified data, right, which is something that, you know, we've touched upon a little bit earlier on the conversation.

45:30
I, I do want to spend a bit of time just just getting Shopify to talk to us a little bit about their perspective on unified data specifically.

45:38
So, you know, Patrick, you know, any thoughts in terms of, you know, how retailers are, are leveraging unified data?

45:43
We talk about loyalty programs, we talk about, you know, some of the ability to to to to create sort of unique customer experiences.

45:51
You know, anything to add in terms of how Shopify it really looks at that?

45:56
Yeah.

45:57
I think what Corey was just saying of having where regardless of what the first touch point that a human has with your company, how are you able to turn that into a relationship?

46:06
So if somebody comes in and purchases something in one of your stores, how does is how are you able to make that not just a one time transaction?

46:15
Similarly, if somebody comes and purchases something from you online, how are we able to help make it easy for you to then be able to guide them towards your stores?

46:25
And so we've actually just been rolling out a bunch of things that when you are using, you know, Shopify for your retail stores and you are using Shopify online, some templates in our marketing flow automations where it's really easy to set up that, oh, this is a first time purchaser who just made their first purchase from us, who lives within a certain radius of one of your stores.

46:47
And you know, as you collect other information, for instance, like this person, you, you know what their birthday is.

46:55
And so create an automation for come in for your free gift to the store that you are located near, near.

47:02
And that means that you are able to do that in a really personalized and targeted way.

47:07
So when you have a storefront for parent that is on the East Coast, you are not sending that to your California customer who is 2000 miles away from your store, but you are guiding them to, hey, there's a store down, down the line.

47:19
And similarly, in your order confirmation emails, you can very easily, you know, if for whatever reason, you know, size isn't exactly what you needed, come down the street to our store and you can get it in the right size, which again turns what would have been returns and lost revenue into exchanges.

47:34
And one of the things that we found is when when buyers come in to exchange an online sale, they end up not only preserving the revenue that would have been a return, but actually purchasing more.

47:47
And, you know, having that unified view of the customers, what makes that possible?

47:52
So, you know, and we're kind of drawing towards the end here and, and I think, you know, we've, we've talked a lot about unified, unified commerce, unified data.

48:00
We talked about the fact that, you know, a unified strategy is, is really important for retailers that are looking to, you know, stay resilient, future proof their business, You know, really, you know, try to, to navigate some of the, you know, some of the rapidly developing realities of, of, of retail.

48:22
You know, I would love Patrick, if you can just touch upon a little bit, you know, the investments that Shopify makes to ensure that retailers will continue to benefit from some of this thinking.

48:36
And I think, you know, it's pretty clear that that you guys move fast, that you're hyper focused on on your customers, which is enabling, you know, partners like EY to really bring your value proposition into the enterprise.

48:50
Talk to us a little bit about sort of how you think about the future or how you think about some of the investments you make going forward in this area.

48:57
Yeah.

48:57
I mean, I think the first thing is just to make sure I acknowledge the scale of the investments that we make and the pace that we move at.

49:03
So we've invested over $1.7 billion in R and DI get to work with a team of thousands of the best engineers in the world who are focused on nothing but making the best commerce platform in the world, the best unified commerce platform in the world.

49:17
And that means that when we are doing that, we are doing it not for online and not for retail, but for all of our channels.

49:25
We have annually released over 200 platform updates that you can see by going and visiting Shopify editions, which shows off the, you know, incredible pace of development and speed of progress that we're making.

49:40
And our goal is to make sure that we are always building towards the future so that as there's something that you want to be able to do, it is already there.

49:51
And I don't think there are many or any companies in the world that have our scale and our leverage to be able to do that.

49:59
So, so team, thank you very much.

50:01
I mean, I think we covered a lot of territory.

50:03
You know, we, we've touched upon a couple of the key insights from, from the report.

50:06
And again, at the end of this presentation, you'll be able to download that that report directly from from the materials here.

50:13
We're going to move now to, to some questions.

50:16
We have a fairly active chat here.

50:19
So I'm just going to sort of go through the list of, of different questions that that have come.

50:23
Well, I'm going to, I'm going to clearly start with Corey because I think, you know, Corey, the lived experience of Pepper Palace is one that I think that the audience is super interested in.

50:32
So the question for you, Corey, can you share specific examples of how Pepper Palace has leveraged unified customer data to drive sales and improve your marketing strategy?

50:41
I think you, you touched it a little bit in the discussion, but maybe if you have some other examples that'd be great.

50:48
Yeah, I'm, I'm more than happy to share a couple examples of, of how we've done this.

50:51
One most recently is we launched a subscription program for Pepper Palace.

50:56
And in this kind of unified customer data, we found that people were already purchasing something 3 or 4 times within a few months time frame.

51:05
So what we're able to do is identify those customers and and target them with some marketing efforts to get them into the subscription program.

51:14
We we knew based on their buying behavior online and in store that they were buying the same products over and over at a very similar frequency.

51:23
So that allowed us to kind of target those customers specifically to get them into our subscription program.

51:30
Another way that we did it is we launched a new deal about a year ago in all of our retail store locations.

51:37
Previously in Shopify or in Pepper Palace's experience, we just sent sent out the same messaging to everybody.

51:44
It didn't matter where you shopped, how you shopped and we just sent you the same message.

51:48
With this unified data, we really got to understand where our consumers were shopping, which was a big thing for us when we launched this new deal.

51:56
What we were able to do is actually pull, you know, customers who only shopped in store that was their their preferred method of shopping was in store and and group them within an area of 30 miles of our store locations.

52:10
And we could target them directly to say, hey, here is a new store, new in store deal specifically for you.

52:17
So in terms of, you know, how we leveraged it, it's really around just spending behavior and customer data and being able to pick apart and really drill down how these people are shopping and target them with what exactly they want to see.

52:31
Got it.

52:32
That's I mean, again, the lived experience of of of you and your team is super valuable as we sort of ground some of the concepts and and some of the insights from the report.

52:41
So, so that's, that's super interesting.

52:44
Patrick, I'm going to go to you with it's more of a general question.

52:49
I think it's just interesting.

52:50
So I think a lot of people you know, are trying to think through Omni channel versus unified.

52:55
So, you know, can you from a Shopify perspective elaborate a little bit about the differences around Omni channel versus unified commerce and, and why it's critical for retailers to kind of think about these two things separately or distinctly?

53:10
Absolutely.

53:12
I think the key distinction is one of integration capabilities and cost.

53:16
So I guess 3 of integration's capabilities and cost.

53:19
So Omni channel, you have multiple channels in which you are selling and you have done a ton of work to make sure that those channels work together.

53:29
You have the middleware to connect the disparate systems together.

53:31
And you can provide somewhat of a like an Omni channel experience where your stores are aware of what's happening online, online the aware of what's happening in stores with a bunch of sinking of data around and a bunch of work on your part.

53:44
The difference between that and unified is unified is a single view of your operations, regardless of the channel that it's that the sale is happening in.

53:54
And what this means is that you have the same capabilities are becoming available across all of your channels at the same time.

54:01
Your your cost and your effort into integration is dramatically lower.

54:07
And the ceiling of the experience that you can provide is much higher because instead of, you know, waiting for your nightly sync between systems, your hourly sync between systems, even your like, you know, multi minute sync between systems, it is a single platform, a single commerce operating system that you're operating on.

54:23
And it leads to a better experience at lower cost and less effort The next one.

54:31
And, and thank you for that, Patrick.

54:32
I think it's a, it's really a really good overview of both of those.

54:36
And, and again, the reason why we think about them a bit differently.

54:39
We have somebody from the audience that that wants to spend a bit of time with Vincent really understanding some of the common pitfalls that retailers, you know, should try to avoid when they calculate TCO specifically around sort of new commerce solutions that they might be considering.

54:59
Yeah, sure.

55:00
I think first in a really obvious one is make sure you're considering all the costs and benefits, right?

55:08
I think if you're thinking about traditional TCO upfront cost, ongoing cost, most people get that right.

55:13
When you extend the, the, the aperture of the definition of that to value creation, it becomes a lot more complicated and difficult to predict.

55:20
But you don't have to get the, the numbers perfect.

55:24
What you do need to do is to be able to put, have the right people on at the table to be able to provide input.

55:30
And what that enables is a high level road map as to how we're gonna create value using unified data.

55:37
How are we gonna run better promotions?

55:39
How are we gonna have, how are we gonna utilize real time access to transaction data in, in one place?

55:46
And so you know that your TCO becomes a lot more holistic and the results may change.

55:53
And 2nd, you know, I think just in around TCO, if you think about something like disparate systems having their own pricing schemes, if you combine them together in an environment like unified commerce, it could be the case that you have economies of scale that you're not factoring in.

56:13
If you just look at each system side by side.

56:16
And so it's the POS and PO versus POS, ECOM versus ECOM, you combine the two and you compare it to disparate systems.

56:23
It may be the case that in combination there's economies of scale on things like transaction payment rates that you'll be able to realize that you're not accounting for.

56:33
And so you really need to be able to account for economies of scale.

56:39
That's great, Thanks.

56:39
Thanks Vincent for that.

56:41
And I think we're going to go to our last question, which is a a bit of a general question.

56:45
And, and the question was, you know, a lot of the strategies we've talked about today really focused on developing customer relationships.

56:52
You know, are there specific industries that that we can think about that don't necessarily need customer loyalty as a source to to drive revenue growth?

57:03
And I'll actually take that one.

57:04
And I think, you know, what's important here is, is loyalty is just another way of saying, you know, understanding your customer and, and if you choose to create offers and, and programs that you, you uniquely cater to them or uniquely benefit them.

57:19
So if we sort of unpack this idea of loyalty, all it really talks about is understanding your customer.

57:25
And so I actually don't think that there's really any industry where we're not understanding your customer, their unique behaviors in terms of what they're buying, why they're buying, what they are typically looking to purchase, like not knowing that I think is, is not a great position to be in regardless of the industry.

57:45
So I think, you know, removing loyalty a little bit and just talking about understanding your customer, I think that's really what the what the focus needs to be.

57:52
And I think some of the solutions or definitely the solutions we talked about today, you know, powered by Shopify allow you to do that, whether or not you you leverage those into robust loyalty programs or just use them to better understand your customer and how they're interacting with the products and services you're selling.

58:07
That's really the point.

58:08
So I'd say no, there, there's probably no industry that that that wouldn't benefit from sort of better understanding the customer.

58:17
So with that, we are going to end the discussion.

58:21
Again, really appreciate everyone's time.

58:23
It's a busy part of the season.

58:24
We get that, You know, we we loved working with Shopify on on this particular report, you know, please download it, take a look, let us know your thoughts and I'm sure there's going to be many more of these types of conversations that we'll be putting together in the future.

58:42
So thank you so much for your time and and have a great evening and or rest of day wherever you are.