Pull-Forward Sales to Mean Lower Q4 Share of '21 Revenue: Shopify CFO

E-commerce’s share of overall retail “has reset lower than the peak last year,” said Shopify Chief Financial Officer Amy Shapero on a Thursday earnings call. The company expects Q4 to generate most of its 2021 revenue, but the revenue spread “will be more evenly distributed across the four quarters than it has been historically,” she said, citing potential impact from supply chain delays and higher costs for materials, labor, shipping and advertising. Spending for Black Friday and Cyber Monday “may be pulled forward.” Shopify expects its gross merchandise value to grow “substantially faster than the commerce market," Shapero said. E-commerce share remains several points higher than two years ago and is “poised to resume a more normalized rate of growth,” she said. In a reflection of in-store retail’s 2021 rebound, CEO Harley Finkelstein pitched traditional retailers on the call, saying the brick-and-mortar segment “reclaimed some of its share of retail.” He touted Shopify’s new point-of-sale software that supports in-store retail, allowing merchants to “transition seamlessly” between online and off-line selling. The e-commerce platform company’s revenue grew 46% year on year in Q3 to $1.1 billion. In social commerce, Shopify expanded its relationship with TikTok in the quarter, introducing product discovery and shopping tabs, linking products directly to a merchant’s online store for checkout, said Finkelstein. He also cited integration with Spotify, allowing artists to sync their product catalogs and showcase products on their Spotify profile (see 2110270043). The economy “remains resilient,” said Shapero, but with consumer spending on services and off-line retail expanding, e-commerce “is growing at a more normalized pace relative to 2020.” Shopify, in turn, expects to “grow revenue rapidly in 2021, but at a lower rate than in 2020.” Shares closed 7% higher Thursday at $1,457.