Shopify has launched a new fulfillment network (SHOP)
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Shopify has launched a new fulfillment service that uses machine learning (ML) to predict demand, allocate inventory, and route orders to the nearest fulfillment centers, The Wall Street Journal reports. The company's goal is to "make fast and inexpensive shipping the new standard on the internet," according to Shopify Chief Product Officer Craig Miller, as cited by The WSJ.
Eventually, Shopify wants to enable merchants of all sizes that work with it to use the Shopify Fulfillment Network, but it will start by extending the services primarily to small- and medium-sized businesses (SMBs) that are currently unable to meet their logistics needs, Miller told VentureBeat.
Here's what it means: An in-house fulfillment service is a major benefit to offer potential clients, and it can help Shopify stand out as an e-commerce platform provider.
Having their platform provider handle fulfillment could be especially helpful for smaller partner merchants. Small businesses with fewer resources may be stuck working with a third-party logistics provider or even shipping products themselves. For these merchants, being able to hand this labor off to Shopify could save a lot of time and speed up deliveries since Shopify's ML-powered network may be faster than those of their previous providers.
The bigger picture: Services like Shopify Fulfillment Network can help Shopify partner merchants stay competitive as the fight for fast shipping intensifies.
Since Amazon's announcement about the upcoming shift from Prime two-day shipping to Prime one-day, e-tailers have been scrambling to slash delivery times. For example, Walmart has debuted a next-day shipping offering and Target has made same-day delivery via subsidiary Shipt available to nonmembers for a flat fee.
As major players speed up their fulfillment processes, consumers will likely come to expect deliveries to arrive rapidly — which is a detriment to smaller e-tailers that lack the fulfillment networks needed to attain such speeds. But if major e-commerce enablers like Shopify can develop strong fulfillment networks and take this job off their sellers' hands, they can remove this concern for their clients.
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