The uptick in online shopping since the onset of the pandemic has altered purchase habits for the long run.
Retail's big three, Amazon (AMZN), Walmart (WMT) and Target (TGT), have benefitted from this shift by investing heavily towards faster delivery of goods, boosting their supply chains, expanding their warehouse networks, and stocking up on inventory.
Much of retail's supply chain and backend today relies on technology. It forms the bedrock of their existence. The key proposition in the business is fulfillment along with the right product and price.
Last year, Amazon expanded to add two more fulfillment centers to its growing network.
Target is adding to its network of sortation centers outside of Minneapolis, with five more opening this spring in Dallas, Houston, Austin, Atlanta, and Philadelphia, and five more planned for later this year.
Similarly, Walmart has increased the number of stores that will serve as its market fulfillment centers, keeping the speed and convenience of delivery a key priority.
Tech businesses like Shopify (SHOP), which help businesses sell online, have grown faster during the pandemic as well. The company clocked over a $1 billion in sales for the first time during the December quarter.
And now the company is adding a new weapon to stifle competition from legacy retailers.
Shopify Will Make Logistics Easier
Tech platform Shopify has purchased Deliverr, a logistics supplier for e-commerce merchants for $2.1 billion. Shopify's best performing shops, like ColourPop and Jeffrey Star Cosmetics among others, could benefit greatly with the addition of this new tech startup and its delivery capabilities.
Deliverr used to manage order fulfillment or completion for merchants selling through Walmart, Amazon, eBay (EBAY), and Shopify. Many items can be delivered in two days or less.
Deliverr's technology interfaces with these platforms, allowing merchants to assign specific badges to items that indicate shipment times and whether they qualify for programs like Amazon Prime, which can help sellers rank higher in search results.
Shopify will gain visibility and control of movements along the supply chain with the addition of Deliverr's network management software.
"Our goal is to not only level the playing field for independent businesses, but tilt it in their favor — turning their size and agility into a superpower,” said Shopify Chief Executive Tobi Lutke in a statement.
With the help of a combination of software engineers, operations specialists, and customer service experts, Deliverr aims to offer warehouse space and more to thousands of merchants seeking it to run their businesses.
“Together with Deliverr, Shopify Fulfillment Network will give millions of growing businesses access to a simple, powerful logistics platform that will allow them to make their customers happy over and over again," added Lutke.
At the end of March, Shopify reported sales of $1.2 billion. The first quarter of 2022 marked the highest revenue growth in the company's history as a public company.
The company last month announced a 10-for-1 stock split.
A split can make a stock more accessible to regular retail investors by lowering the price per share, as Real Money Columnist Stephen "Sarge" Guilfoyle explained in March.
