How Scalable is Shopify Plus (and What GMV Can it Handle)?

At Swanky we’ve been building ecommerce stores on Shopify since 2012. As a founding Shopify Plus Partner, we’ve had a front-row seat to watch one of the pre-eminent technology success stories of the last decade unfold.

As Shopify has matured from a challenger product, ‘arming the rebels’ in their fight against the established order, into the dominant SMB ecommerce platform of our time, a number of questions about the scalability of Shopify Plus have started to emerge.

Some of these questions are fuelled by competitor platforms.

Others have arisen from inevitable growing pains experienced by some of the fastest growing and most ambitious brands using Shopify Plus, including many of our clients.

We’re regularly asked about the scalability of Shopify Plus, and the extent to which it is a genuine enterprise ecommerce solution. Typically these conversations include questions about the GMV that Shopify Plus can handle, its capabilities for international commerce, and (sometimes) whether or not Shopify is a monolith (and to what extent that matters).

None of these questions have a straightforward answer, and our response will typically depend upon specific circumstances.

However, we are consistently seeing brands conclude that Shopify Plus is much more scalable than they had previously realised.

In turn, this is leading to an acceleration in the numbers of brands migrating to Shopify Plus from legacy digital commerce solutions like Adobe Commerce Cloud, SAP and Salesforce, but also from the new breed of composable commerce solutions like commercetools. For more information on how to build a composable architecture on Shopify, read our comprehensive CTO’s Guide to Composable Commerce and Headless Technologies on Shopify.

To consider some of these questions, we recently interviewed three of our senior leaders to understand their views – and find out what they’ve been seeing and hearing in the market.

In this article, we’ll be sharing insights from Dan McIvor (Swanky’s Founder and Chief Future Officer), Ian Jamieson (UK Head of Technology) and Dan Partridge (CEO).

Full disclosure: Swanky is a Shopify Plus partner, specialising exclusively on the platform, and so we cannot claim to be an impartial commentator on the digital commerce landscape. We believe in strong opinions lightly held, and are always open to contrary viewpoints. In our 10+ years as a specialist ecommerce solutions provider we have regularly and thoroughly investigated other ecommerce platforms, and consistently and emphatically concluded that we will keep building on Shopify because to do so is in the best interests of our clients and our own business.  

How scalable is Shopify Plus?

Dan McIvor (DM): I’ll kick this one off. It’s very scalable, to a point, and almost infinitely more scalable than it was two or three years ago. We’ll get into the details in a minute, but if you’re a growth or mid-market DTC brand, there’s a very high probability that Shopify Plus is the most performant and best value-for-money digital commerce platform available to you. If you’re an enterprise brand, the same may also be true, although ultimately this will depend upon whether you want to build an in-house engineering team and, to a greater or lesser extent, become a technology business. Even then, more and more people are starting to understand just how powerful a tool Shopify Plus can be when rightly deployed.

Ian Jamieson (IJ): A lot of that has to do with the sophistication of the digital teams that the brands have built and their ability to handle scale on a people/engineering level.

DM: Absolutely. When I say that Shopify is scalable to a point, there are often limitations that come with certain functional requirements. The solutions to those challenges have typically not been native, out-of-the-box (OOTB) Shopify functionality. However, good development teams can build very sophisticated and elegant solutions using Shopify and its increasingly mature third-party app and integration ecosystem. Does that make Shopify any less scalable? I’m not sure it does.

Dan Partridge (DP): I was speaking recently with the technology advisor to a mid-market PE fund. They told me that their default position these days when advising portfolio companies is that they need to “come up with a very good reason why they shouldn’t be building on Shopify”. These are ambitious, fast-scaling brands who are looking to dominate their respective markets.

IJ: We’re also seeing the core Shopify product develop rapidly. If you examine Shopify Plus today, complete with features like Flow, Markets and even Hydrogen (Shopify’s modern React framework) and Oxygen (Shopify’s edge network hosting counterpart), you get a whole bunch of advanced features that simply didn’t exist a few years ago. The robustness and quality of Shopify’s API also gives engineering teams a lot of flexibility when it comes to building more bespoke solutions, which is something we spend a lot of our time doing.

DM: Before we get into some of the nuances of ‘scalability’ and what that means in practice, because there’s a lot to it, shall we talk about the GMV question?

What GMV can Shopify Plus handle?

DP: Dan, I know you have a number of issues with using GMV to determine scalability or platform choice, but please humour us for a moment. What sort of GMV can Shopify Plus transact?

DM: Three years ago our typical clients at Swanky were transacting £1-2m GMV per annum on Shopify. Today that figure is around 10x higher, and climbing all the time. We’ve helped some clients achieve their rapid growth through strategic partnership and growth services. Others are larger brands who we’ve helped to migrate to Shopify Plus. More broadly, there are a number of high-profile Shopify success stories – Huel is the fastest-growing British ecommerce business internationally and did £100m last year and grew another 40% this year.^1,2 Gymshark did over £400m last year, and in Australia, JB HiFi transacted $1.6bn AUD last year.^3,4

IJ: None of those brands have had to replatform away from Shopify to achieve that level of revenue. There’s no fundamental technological reason why brands can’t transact billions through Shopify Plus.

DM: The reality, though, and the reason I don’t like the GMV question, is that GMV is one, fairly indiscriminate gauge of scale. It doesn’t address fundamentals like brand, functional requirements, international strategy etc. We’ve got clients doing £10m GMV with extraordinary complex stores which push the boundaries of what’s possible on Shopify Plus.

DP: There’s an intriguing blog post on this subject from (headless ecommerce solution) Elastic Path, which suggests that Shopify Plus is the obvious SMB choice (<£10m GMV), that commercetools is the stand-out solution for the largest global brands (>£250m GMV), and that there’s a lot of confusion in between.

DM: I remember you sending me that article, and in some ways it captures a lot of sentiment quite accurately. That is, that you build on Shopify until such time as you’re constrained by platform limitations, and then perhaps you look at a MACH Alliance* or legacy enterprise solution. Even then, I’m not sure it’s entirely true.

*The MACH alliance is an affiliation of businesses aligned around a core technological approach which is Microservices based, API-first, Cloud-native SaaS and Headless. 

IJ: I don’t think there’s as much confusion in the mid-market as Elastic Path makes out. As you say Dan, GMV is a one-dimensional way to categorise tech stacks. There are Shopify Plus use cases at £1bn, and I’m sure you could find commercetools or Elastic Path use cases well below £250m. The conclusion that Shopify Plus has had ‘little success’ in the mid-market is just plain wrong to me, and I would argue that on its current trajectory Shopify will very soon have the best product and best use-cases in this range. Even if the GMV ranges are rather arbitrary.

DP: Use cases are crucial aren’t they. If you look at something like Gartner’s Digital Commerce Magic Quadrant, Shopify isn’t currently ranked as a leader alongside commercetools or SAP, but a big reason for that is the perceived lack of use cases.

DM: That’s going to change so quickly though. Even if we ignore migrations for a second, there are so many fast-growing brands on Shopify that are punching into the mid-market extremely quickly. Our client portfolio is full of them. Also Gartner didn’t include this year’s Shopify product roadmap in its assessment, which is a significant factor.

DP: Absolutely. And it’s going to become progressively harder to argue against Shopify’s solution for brands in the £50-250m GMV range when in 12-18 months there are going to be hundreds, if not thousands more use cases. There’s also a bit of chicken-and-egg here, because when the likes of Gartner and Forrester inevitably decide to classify Shopify Plus as a leader, procurement teams globally are going to be adding another platform to their vendor list, and that’s very quickly going to drive some phenomenal use cases.

DM: We’re also starting to see the first commercetools to Shopify migrations, and I’m sure more will follow. Many brands are compelled by the purity of a MACH Alliance proposition, but quickly realise that they don’t want to become tech companies. They want their tech stack to work for their brand, not vice versa.

IJ: Without wanting to take us into the headless/composable conversation, I think that another big part of the GMV question is around resources and human capital. If you’re a £500m+ GMV brand with advanced feature requirements, you want the most powerful composable solution on the market, which might for the sake of argument be commercetools. But if you’ve rapidly grown your GMV on Shopify Plus, you’ll probably have a largely MACH-ified Shopify store. You’ll have continued to upgrade and refine your tech stack along your growth journey as revenue and requirements grow. That in turn is going to reduce the need to replatform to continue scaling.

DP: Let’s revisit that one in a bit, because part of the argument against enterprise brands using Shopify Plus is that it’s a monolith, which I know you think is a bit unfair Ian.

IJ: I think it’s patently untrue. It intrigues me that BigCommerce is generally seen as being a composable, MACH-principles embodying solution, whereas Shopify with its almost infinitely versatile deployability and app ecosystem is misconstrued as an inflexible monolith.

DP: You’ll definitely need to explain that one a bit further for us Ian.

DM: Before we change the subject, and I do think we should dig into the headless commerce angle actually, let me add two more reasons why GMV is a poor way to assess platform suitability and scalability. The first is that a lot of enterprise brands we’re working with are running a whole portfolio of sub-brands on Shopify, each of which notionally has a lower GMV, but collectively forms something much more substantial.

DP: We’re currently working with the UK’s 7th fastest growing company – is that a good example of this?

DM: Exactly. They’re baking scalability into their tech stack as a core requirement – and have chosen Shopify Plus as their foundation. My other big objection to the GMV criteria is that some of our largest enterprise clients aren’t native DTC brands. In some cases they only do a very small percentage of their revenue through ecommerce channels, but have a huge opportunity to build market share in the coming years. These are brands which again notionally have very low ecommerce GMV, but are in many instances market leaders and household names. I was listening to a technology leader at Mars recently describing their portfolio-wide global technology strategy for their food & drink brands, which Shopify will be at the heart of. Mars wouldn’t be building on Shopify Plus if they didn’t believe it to be a robust and scalable growth engine.

How enterprise-ready is Shopify Plus?

DP: Okay then Dan, you’ve made a compelling argument that GMV is a one-dimensional way to appraise a tech platform. If you’re appraising Shopify Plus through a product and feature lens, then how does it stack up? At Swanky we’re persuaded that Shopify Plus is going to be the dominant enterprise commerce tool of the next decade – and that Accenture, EY and Deloitte Digital moving into the Shopify ecosystem validate this thesis – but what are brands looking for from a technical perspective?

DM: Again I think it very much depends, but in terms of what we’re seeing in the market there are a number of clear themes. We’ve been migrating brands away from Magento for years, but there’s growing concern from brands using other legacy platforms like SAP and Salesforce Commerce Cloud around value, flexibility and speed of implementation. This is being accelerated by economic headwinds and the recognition that Shopify is an incredibly powerful, scalable and affordable solution compared to those I’ve just mentioned.

DP: The value aspect is increasingly important in the current economic climate. The push for value and ROI is encouraging more brands to look at Shopify Plus. But you’re also right about the underlying quality of Shopify’s product.

DM: In terms of features or technical functionality, Shopify is underpinned by an unbelievable payment engine. We tend to apply a number of tried-and-tested UX changes to Shopify’s checkout, but in terms of its stability under volume it’s near enough unbreakable. The Black Friday numbers alone are just incredible – 99.999%+ uptime, peaking at 75.98 million requests per minute.⁵ Even if you’re looking at a composable/headless configuration, it’s hard to argue against Shopify as a payment processor.

IJ: It’s also very secure. Level 1 PCI compliance is bank-grade security. From a risk perspective, this is very important to CTOs and CFOs.

DP: That ticks procurement’s boxes too.

IJ: Definitely. With Shopify you’re talking about a solution with near-total uptime, which is a huge draw for brands who are currently operating in a hosted environment. I know we’re going to come onto this in a bit, but from a product perspective we’re talking about an increasingly robust and sophisticated technology. Just looking at Shopify’s checkout, we’ve now got checkout app extension APIs, checkout UI extensions and checkout post-purchase extensions that give developers so much flexibility.

DM: Shopify’s product is undoubtedly enterprise-ready. The next step is all about market penetration and use-cases, and that’s just a matter of time.

How well does Shopify Plus enable international commerce?

DP: This should be a quick one, because we literally wrote the book on ecommerce internationalisation.

DM: True, although that doesn’t make it a quick one. We’ve been helping brands internationalise on Shopify for years, and learnt a lot in the process. Shopify has been particularly strong I think at enabling cross-border digital commerce. We’ve had Shopify Markets for some time, which has until now been a very mid-market type solution for brands trading in a limited number of international markets. Now though we’re deploying quite a bit of Markets’ functionality for enterprise brands. Markets Pro is here too now, and in our conversations with the Markets product team they’ve made it very clear that Markets will be a genuine enterprise solution.

DP: Shall we flip this one around and look at where Shopify might not be the best international solution?

IJ: It’s definitely fair to say that Shopify hasn’t always been the most flexible international solution, and in certain cases isn’t the cheapest either. It depends on your core markets. But let’s be clear here, any approach is going to bring its own complexity and costs. If you look at other enterprise digital solutions, generally going into a new market involves spinning up another storefront.

DM: Previously other platforms have perhaps given you greater control of checkout in certain ways. Flexibility around payment types, for example SOFORT in the German market, and payment flows, taking payment for a subscription before selecting box content in the case of food-box brands and so on have all been responded to in recent years. What I think you get with Shopify is a huge amount of stability and robustness in the core platform. That gives you confidence to go into new markets, and now increasing customisability to create location- and experience-specific flows.

IJ: Checkout customisation certainly has been a pain point with Shopify in the past. Even with access to the checkout.liquid template, core checkout functionality has been somewhat inaccessible and modifying business functionality via Scripts has been cumbersome and complicated.

DM: That paradigm has changed radically in recent months with the release of the Checkout App Extensions APIs and Shopify Functions. Checkout extensibility gives developers access to core checkout functionality, as well as post purchase user journeys. This has opened up a whole new avenue for merchants and app developers to create augmented checkout experiences and increase average order value, as well as collect and display additional data required for fulfilment, promotions and so on.

IJ: Shopify Functions addresses limitations with interfacing with core backend functionality, and will eventually replace Scripts entirely. They’ve only provided access to discounting logic for now, but in time they’ll be opening up more of the backend and it’s a move in the right direction.

DM: There are still certain limitations with Shopify Markets that can sometimes warrant a multi-store approach. These can include where you have different, region-specific business entities, payment platforms, banking restraints etc. Some brands will have different back-office functions and fulfilment setups in different markets. There can also be a need for localised product catalogues and content.

IJ: Depending on your deployment this can lead to additional development overhead, but we have reduced that quite a bit with our multi-store deployments approach. And we’ve got some good use cases using Markets now, such as our work with Bouclème.

Finally, is Shopify Plus a monolithic ecommerce platform?

DP: Ian, you’re going to need to help us here. What’s a monolith, and is Shopify one?

IJ: A monolithic architecture essentially refers to one big, multi-functional platform that manages everything, with an integrated frontend and backend that is closely coupled together. This means code that runs the storefront, search, content, and checkout also runs alongside code that handles the backend business logic, order management, fulfilment, data, communications, and so on. While monolithic platforms are indeed very capable, the drawback is that they are seen as a very opinionated choice of technologies and rigid in their capabilities. This makes them less adaptable to different business needs and markets.

DP: Okay, so monolithic ecommerce platforms have their use cases, but fast-scaling or high-GMV brands might see ‘monolithic’ as a down-side?

IJ: Exactly. By contrast, in a composable architecture, the tech stack is decoupled into separate layers, and functionality is distributed to a group of microservices, or “packaged business capabilities”, to use a new term coined by Gartner. Each microservice performs a specific business function, and disparate systems communicate via APIs. This architecture is technologically un-opinionated, and allows merchants the freedom to choose from a range of best-of-breed technologies and services that best suit their business requirements in different contexts and markets. For larger enterprises in particular, this flexibility is paramount to digital transformation and penetrating into new global markets successfully.

DP: So we have in effect a spectrum between monolithic platforms at one end, and composable commerce platforms at the other?

IJ: That’s right. As to your second question, Dan, Shopify most certainly does have a monolithic architecture. Indeed it is one of the largest Ruby on Rails codebases in existence. But it would be too simplistic to paint it as a rigid monolith, because alongside the Rails-Liquid stack, they provide a robust suite of APIs that have long permitted a composable architecture.

DM: In fact that’s been the case for a while, even though language like headless and composable has been coined more recently.

IJ: Absolutely. Since the Storefront API was released back in 2016, brands have had the option of just using Shopify for checkout if they so wish. Developers have been building headless stores on Shopify for years already. Shopify’s engineers have been collaborating closely with the leading headless platforms like Gatsby and Next.js for quite some time.

DM: A surprising percentage of headless stores are powered by Shopify. Well, surprising if you listen to the detractors that say that Shopify is just a monolith.

IJ: In the last few years especially, Shopify has been investing heavily into headless technologies and developing their APIs even further. The new Hydrogen UI, as distinct from pure Hydrogen, is even a decoupled set of React components, that can be added into existing headless builds like Next.js and Remix, so the technology has evolved further to become truly agnostic and composable. Incidentally, Shopify recently acquired Remix, which I think says a lot about their keen eye for pioneering technologies and how much they value pushing headless technology forward.

DP: Okay then, so to conclude the monolith question… one of the arguments that other platforms are trying to make against Shopify is that it’s monolithic, and that this is a bad thing. There’s nuance to the second part of that allegation, but to conclude then we’re contesting that Shopify is only a monolith?

IJ: Definitely. If you look at what the likes of Fabric and commercetools are saying – and I’ve got nothing against any of these platforms – there’s very little truth in it. Certainly not when you look at what Swanky has built on Shopify Plus over the years, and the way in which we compose ecommerce stores.

DM: That Fabric article misses the point entirely. I don’t know anybody building on Shopify Plus who wants a fully native, OOTB solution. I don’t even know if that’s possible because of how Shopify has cultivated its app ecosystem over the years.

IJ: That’s a very interesting point. We’ve known for years that Shopify’s app ecosystem, as part of the wider app ecosystem, is part of its defensive moat. Shopify has chosen to leave room for others to fill in a way that creates value for everybody and ensures maximal innovation. There are Decacorns like Klaviyo which only exist because Shopify didn’t create a native CRM and email solution. I think the point that you’re making though Dan is that Shopify is inherently composable, because there’s actually no such thing as an OOTB Shopify Plus store – certainly not one that we’ve seen.

DM: Exactly. When we start working with a brand and working through defining tech stacks, there are thousands of permutations there. Each of these is shaped by the requirements of the client. Every aspect of a Swanky/Shopify tech stack is carefully considered and solutioned with reference to requirements, budget and scalability. And if a free or low-cost solution will work now, there’s scope to easily upgrade it in due course.

DP: Looping back to the question of scalability, Shopify’s strategic investment into so many of its ecosystem players is hugely reassuring to me. It signals long-term product and partnership commitment and is an emphatic statement of approval. If you look at the investments into Klaviyo, Yotpo, Sanity – you have this virtuous circle whereby Shopify is acting as a corporate venture partner, bankrolling and championing innovative solutions within its ecosystem. This in turn drives the purity of Shopify’s core offering. The defensive moat is just getting bigger as the quality of the app marketplace accelerates.

IJ: And if the desired functionality doesn’t exist in a third-party solution, we build it. You can engineer products on Shopify, just as you would with another composable solution.

DM: That’s one of the reasons I think it’s so unfair to call Shopify Plus a monolith. We’ve been doing composable commerce, or something embodying the spirit of it at least, for years, long before anybody at Gartner came up with the phrase. And we’ve been doing it on Shopify Plus.

IJ: The introduction of Hydrogen and Oxygen, and the future product roadmap that this points to, is also very exciting here. You can argue that Shopify isn’t fully composable, and isn’t truly enabling a best-of-breed tech stack to be composed, because each component needs to be compatible with the Shopify ecosystem. But now that we have Hydrogen and Oxygen, the corresponding hosting platform, we’re stepping into a new era. Even if it could have been argued that Shopify was monolithic, and I agree with you Dan that it wasn’t, we’re now looking at a totally different proposition.

DM: Absolutely. Many of the perceived limitations of Shopify Plus were stripped away with the introduction of Store 2.0, but this is a whole new level. Brands wanting to build powerful digital experiences using Sanity or Contentful can do so on top of a hugely robust and flexible Shopify backend. Shopify’s investment in Sanity sends a powerful message to other composable platforms that Shopify is serious about building in the headless ecosystem.

IJ: It’s very exciting. And it’s clear that Shopify is incredibly scalable – which is where we started this conversation.

Scalability of Shopify Plus: Continue the conversation

We’re at a fascinating cross-section in the relatively short history of digital commerce.

If you’d like to discuss anything we’ve covered in this article, whether to understand more or to share a contrary view, please get in touch and we’d be pleased to speak with you.

For reference:

[1] business-live.co.uk/…/revenue-steven-bartlett-backed-huel-23546750

[2] sifted.eu/…/huel-series-b-investor-idris-elba

[3] theindustry.fashion/gymshark-more-than-doubles-revenues-in-2021

[4] insideretail.com.au/…/jb-hi-fi-posts-record-earnings-backed-by-online-growth-202208

[5] twitter.com/…g/status/1597983918900510720