The recent announcement of Commerce Components by Shopify offers further confirmation that Shopify is rapidly evolving into an enterprise ecommerce platform capable of powering the biggest and most complex global brands.
Enterprise represented the fastest-growing segment of Shopify’s user base in 2022. Only last month, our CEO, Dan Partridge, shared his thoughts on the rise of Shopify in the enterprise market in an article for the Enterprise Times, and how we’re seeing this being accelerated by economic headwinds. We’ve also commented recently on the scalability of Shopify Plus for high-GMV brands.
Now, following Shopify’s latest announcement, the platform’s growing importance in the enterprise space has been further underlined.
New year, new enterprise offering
For Shopify, the new year heralds a new era of growth.
In a move that sees Shopify “redefining enterprise retail”, it has announced the launch of Commerce Components by Shopify (CCS), a new enterprise-only service offering.
CCS gives enterprise brands “the best of both worlds”; access to the unrivalled high performance scalability of Shopify, with an unbundled product offering more familiar to enterprise retailers.
What is Commerce Components by Shopify?
CCS is a modern, composable stack where enterprise retailers can handpick the Shopify components they want to integrate with their own systems and build a fully flexible, scalable commerce solution. It takes over 30 of the constituent functional components available with Shopify Plus, and unbundles them for enterprise retailers.
“Commerce Components by Shopify opens our infrastructure so enterprise retailers don’t have to waste time, engineering power, and money building critical foundations Shopify has already perfected, and instead frees them up to customize, differentiate, and scale.”
– Harvey Finkelstein, President of Shopify (Source)
As a commerce solution, Shopify’s newest offering prioritises choice and flexibility. Retailers can pick the components they need and leave what they don’t.
The trusted, high-performing components available to choose from include storefront search, subscriptions, point of sale and Shopify’s industry-leading checkout which converts 72% better than a typical checkout (rising to 91% on mobile). You can view a full list of available components here.
As well as modular components, retailers have access to flexible APIs to connect these with their existing tech stacks.
Pricing will be tailored for larger brands, with clearly tiered, pre-defined pricing rather than the metered approach currently provided under Shopify Plus. CCS is ostensibly tailored for brands with GMV in excess of $500m.
Many aspects of Shopify’s Plus offering have become increasingly enterprise-ready in recent years. The launch of CCS gives the largest retailers the ability to build with Shopify with greater flexibility than ever before.
Our analysis: What does Commerce Components mean for enterprise brands?
The enterprise ecommerce landscape has changed enormously in recent years.
Traditional ecommerce platform solutions – hosted, monolithic, inflexible and expensive – have come under increasing pressure from a new breed of cloud-based SaaS solutions.
Brands which have spent years inadvertently building technology platforms are becoming freed up to focus on their core proposition.
In particular, the dominance of Shopify Plus in the SMB and mid-market has already redefined the commerce landscape. CCS provides further clarity for how that transition can continue in the enterprise market.
We’ve also seen a progressive movement towards a new breed of technologies, with a range of different (and sometimes confusing) labels and language associated with them. Most notably, these include headless commerce and more recently composable commerce, the latter being coined by Gartner in a 2020 report.
Headless commerce has been possible using Shopify since as far back as 2016 when the storefront API was released. This was further supported with the release of Hydrogen and Oxygen in 2022 (Shopify’s React framework and hosting solution respectively).
The market has often misunderstood the place of Shopify in this changing landscape. The composable commerce movement has sometimes sought to downplay the suitability of Shopify for larger retailers. We have commented on this in some detail in our analysis of the scalability of Shopify.
The introduction of CCS confirms Shopify’s status as the most scalable ecommerce platform on the market, capable of powering emergent challenger brands and global category leaders alike.
To understand more about the significance of CCS, we asked three of Swanky’s senior leaders for their reaction to Shopify’s latest announcement and what it means for enterprise retailers.
Dan Partridge, CEO
“Commerce Components by Shopify represents a much-welcomed line in the sand for Shopify. We’ve known for some time that Shopify is an enterprise-ready solution, and now we have the language and service offering to take this to the market with greater clarity and confidence.
“In our view, Shopify has been unfairly strawman-ed as a purely monolithic platform. The introduction of CCS removes any doubt; Shopify can be deployed as a powerful composable commerce offering.
“In the last 18 months Swanky has observed a shift towards larger mid-market and enterprise brands concluding that Shopify is the most scalable platform on which to grow their omnichannel commerce operations. CCS will no doubt accelerate that move significantly.”
Dan McIvor, Founder and Chief Future Officer
“At the time, the introduction of Shopify Plus in 2016 felt like a reactive move by Shopify to secure the future spend of merchants who felt they were outgrowing the ‘plug and play’ origins of the platform.
“Plus launched with a range of core features, tweaks to support and service availability, and a repositioning of language to appeal to the mid-market. It has since reached such high adoption that it is listed alongside the core pricing options. I mention this because it highlights two important things:
- Unlike Plus, I do not necessarily expect CCS to be a natural progression for Plus merchants looking for more, who would otherwise churn away from Shopify. There is little upward pressure from existing Plus-based merchants because the feature-set and service offering is already so extensible; at the high-end, Plus already serves multinational businesses like Universal Music, JB HiFi and Swanky portfolio brands Huel and Wilkinson Sword. Shopify does not have a ready made, internal market for CCS, meaning they have the freedom and incentive to create something unique in CCS.
- This suggests to me that we can expect significant differentiation of CCS from the Core and Plus offerings over time, and likely a more receptive stance from Shopify in terms of building out features and functionality to serve specific use-cases within prospective merchants.
“I have no doubt Shopify will get the marketing of CCS right; they have the experience and budget to compete and rapidly win ground from the incumbent enterprise platforms. In my opinion, the long term success of CCS largely depends upon how Shopify deals with the cultural and procedural shift from product-led roadmaps where the platform’s functionality is prioritised based on it being ‘most useful to most people, most of the time’, to something more democratised.
“Whatever happens next, as one of the first Shopify Plus agencies globally, I could not be more excited for Swanky’s part in the rollout of CCS.”
Ian Jamieson, UK Head of Technology
“At this initial stage of development of CCS, we don’t expect a major divergence from Plus in terms of functional capabilities, and we anticipate that the core feature-set of the storefront, cart, checkout, and APIs will be largely identical. Plus merchants will not be deprioritised in any respect, nor missing out on any ongoing feature development.
“Shopify’s intention with CCS isn’t necessarily to lock features at different price points, but rather to enable large-scale enterprises to leverage modular, tiered enterprise pricing and bundle discounting that enables economies of scale, with all the advantages of a mature SaaS framework and managed infrastructure in tow.
“However, at the outset, there will be some tangible differentiation in terms of elevated platform features, including unlimited Storefront API and Admin API limits, where throttling is completely removed. This enables massive bulk operations, as well as other low-level limit increases to things like product variants, etc.
“We expect to see a different CCS admin interface that reflects a modular decoupling of business capabilities (demonstrating a composable architecture), as well as some extra controls for permissions and devOps capabilities for staged feature rollouts.
“Finally, with integrated access to a dedicated technical account team included in the SLAs, Shopify is opening up engineering at a service level. Access to Shopify’s core engineering team will unlock backend capabilities and expedite certain feature development that might otherwise block an enterprise merchant from adopting the platform or from leveraging a unique opportunity due to some sort of technical limitation.”
Talk to us about Commerce Components by Shopify
Shopify’s latest innovation marks a significant step forward in the platform’s ability to serve enterprise brands. Here at Swanky, we’re excited to see the growth that CCS will unlock for both individual retailers and for Shopify as a platform.
To chat with our experts about Commerce Components by Shopify, and how it could transform your ecommerce presence, please do get in touch.