.png)
The FODcast
In the FODcast (The Future of #DigitalCommerce) we explore the real career stories of the people who have made it to the very top of the sector and those who are working at the cutting edge of innovation and change right now. Listeners to the podcast gain insight into the journeys industry leaders have taken to be where they are today, the challenges they are facing now and their aims for the future.
The FODcast
Beyond the Hype: Shopify’s Real Role in Enterprise Retail with Teemu Tolonen
In the latest episode of The FODcast, we were delighted to be joined by Teemu Tolonen, CCO at Woolman, to unpack one of the biggest shifts in digital commerce: how Shopify has quietly become a serious contender in enterprise retail.
As part of Europe’s largest Shopify Plus agency, Teemu brings first-hand insight into what’s driving this change and how retailers are rethinking their technology strategies.
We cover:
- How Shopify’s semi-composable architecture delivers flexibility without complexity
- Why major retailers are seeing considerable cost savings when switching to Shopify Plus
- What brands need to know before migrating - from data readiness to project teams
- How unified customer data is finally solving retail’s online/offline disconnect
- Where AI fits into the future of enterprise commerce
Teemu’s message is clear: Shopify isn’t just for start-ups anymore - it’s reshaping the way global retailers approach technology and growth.
If you’re evaluating your commerce stack or tracking retail tech trends, this one’s a must-listen.
Simply Commerce is the leading supplier of talent into digital commerce across technology, digital marketing, product, sales, and leadership.
Find our more about our approach and our services within digital commerce recruitment here: https://simply-commerce.co.uk/
Hello and welcome to Season 7 of the podcast, the podcast focused on the future of digital commerce hosted by Simply Commerce. Season 7 promises to continue to bring you some of the industry's brightest minds across the globe as we unpick the sector and where it's heading From war stories to strategy and technology, deep dives to future trends we cover it all as we continue our journey to have one of the most popular podcasts in commerce. Before we start, if you enjoy our content, please do hit the subscribe button on whatever platform you're listening on, like and share on socials.
Speaker 2:Welcome to another episode of the podcast where we talk about the future of digital commerce, and today we're going to be talking a lot about something that's a hot topic right now, which is Shopify, particularly coming off the back of the Additions Shopify event in Canada last week. And I would like to welcome to the podcast Timu Tolan. Timu is the CCO of Warman, one of the biggest Shopify agencies in Finland and doing a lot more work in the UK at the moment, delivering integrations into retailers and brands. Timu. As much as I would like to give you the best possible introduction, I think you'll probably do a better job of it. So if I could hand over to you to give a bit of insight as to who you are, that'd be great.
Speaker 3:Thank you, tim. Happy to be on the podcast. As I've mentioned, I'm, on the CTO of the company been with the business pretty much since the beginning, so I've been here for the last eight years. Woolman is one of the largest agencies in Europe, so we've obviously kind of started out first from Finland and expanded into Sweden and now kind of UK. It's one of our bigger markets.
Speaker 3:Year over year we've been kind of seeing the client base becoming bigger and bigger, which is actually quite nice for us. Two of our founders used to work with IBM WebSphere technology, so they were kind of already building enterprise commerce on a different tech stack. Now life for us, life for the merchants, is actually a lot easier because we don't need to kind of do or we don't need to be concerned about the technology and the limitations or the issues with the tech. Shopify is devices kind of making our life a lot easier and I'm doing a lot of customer work. The CISO is a kind of a it's a nice title but still hand-sturdy doing a lot of client work, especially with the bigger clients.
Speaker 2:I think that's a good start Makes sense, and obviously we've spoken a number of times before and we've been working with you guys to help with some of that um uh work in the uk and to build out that presence there, and you've talked about some of the technology already. It'd be good to start, from my point of view, to understand what. What is there? What one piece of e-commerce tech is there that really stands out for you so far in 2025?
Speaker 3:Oh, that's a good question. I think the answer might be chat KPT. At the moment I don't know if you can consider it to be e-commerce piece of technology, but I think that's kind of coming a lot in our own internal work. Uh, I know our developers are using other ai services but like the roll-off of ai overall in third-party technologies that are already integrated with Shopify third-party or ai in the roll-off of agencies delivering services, ai or consumer-facing I think it's already here Some people are kind of talking about it's going to be here in the next six months, in a year, but I think it's already here.
Speaker 2:Yeah, I think it is already here. I think it just seems to be evolving so quickly Every time there's another event on the topic is still, still ai, but what it is doing, or what we think it will be doing, is just changing dramatically every time. Oh yeah, I think we're going to see a whole different landscape in the next 18 months, 24 months yeah, so there's a lot of evolution with ai and if we, if we talk about shopify specifically, how would you describe shopify's evolution in the past six months of this year?
Speaker 3:I don't think that we've actually seen massive changes or surprises in the last six months. There's been a lot of development in the last maybe two years, two and a half years Kind of the evolution from being a D2C first with market focused platform. I think that's still there, but a lot of the product marketing.
Speaker 3:the messaging that they've been doing has been focusing around enterprise. They started their enterprise journey by obviously releasing what's known as commerce components, which is kind of like a composable version of their set that you can take. A component like the Shopify checkout that I believe even retailers like Amazon are kind of now leveraging in their e-commerce stacks. That was the first thing and then kind of the second big thing maybe the more important for us was their marketing and kind of researches that they were doing with the big four so Accenture, ey, forrester and then those guys to kind of make Shopify to be a credible platform in the enterprise space.
Speaker 3:So you need to be on those white papers on those studies that any enterprise company, their CTOs, CIOs, CMOs are going to be capable or confident enough that Shopify can handle their needs. That already happened like two years ago, but I think they've been kind of building on top of that momentum that they were gaining, Having the highest ability to deliver. I think that was one of the statements in the Forrester report. That was a really good one. Shopify can do a lot of the complexity.
Speaker 3:It can scale, it can do X, Y and Z, but the main messaging and the communication that they have been doing ever since is that they have the highest ability to deliver. So being a scalable solution, but not being a complicated solution is actually a really good pitch in the market today.
Speaker 2:Oh yeah, absolutely so. The pitch has been being made over the past couple of years as if you said the back end of year. We saw a lot of conversation about whether Shopify is capable of eating into that enterprise space. We've seen a few bigger retailers go onto the platform over the course of the past six months. I'm sure we'll talk more about some of those later. What is, in your view, one of the biggest misconceptions about Shopify Plus at enterprise scale?
Speaker 3:misconceptions about Shopify Plus at enterprise scale. I think it's still regarding the the pure capabilities on how they can manage complicated businesses, especially when it comes to retail space. In retail, we're going to always have typically kind of an external point of sales, external in the terms that it won't be Shopify Plus that those retailers are going to be using. That's going to create a lot of integration requirements for the standard omnichannel processes like buy online, pick up from store or buy online, return to store. Gift cards will be working offline and online. There's going to be an old ERP or typically kind of an older legacy enterprise ERP. There's going to be a lot of integration, order and fulfillment, product data, pricing and so forth what Shopify is actually really good at at the.
Speaker 3:Moment is that they're like way, how they've set up markets, how you can manage languages, currencies, even different content in different markets.
Speaker 3:How you can customize the checkout with different payment options in different countries how you can have different shipping options, that's a real killer at the moment and I think that there's kind of a platform available on the market that would be like easy enough to kind of set up the concept of markets, how Shopify takes care of it. And the second part is these omnichannel flows and their capabilities for the retailers so we can support multiple warehouses. We can do already complicated omnichannel processes even with this external point of sales. We can build those in the integrations. But Shopify actually has a lot of OMS capabilities like order management service capabilities within the platform. We can do order routing.
Speaker 3:A typical kind of conversation that we're now having with our retailer clients or prospects in our pipeline is kind of the the oldest part and I think Shopify is really good in there. So I think a lot of this comes down to the like, the low cost, and Shopify is the lottery. I to me I think their license fee is actually too cheap for the larger enterprise with the larger retailers, because it's kind of a part of the human psychology that I gave to something is too affordable compared to that service that you're paying at the moment. You're second guessing, you're having hesitation.
Speaker 3:that will that other option be able to produce me the same set of requirements and then fulfill the needs that I have. If it's going to be priced I don't know 60% less than the service that I'm using at the moment. So not sure if I completely answered the question in a clearer way, but there was at least a few points that we can talk about.
Speaker 2:Yeah, absolutely, that's interesting. So actually the positioning, the price point positioning, is something you think that they need to consider to make sure that the retailers are taking it seriously as an enterprise scale option. I think so.
Speaker 3:Well, they've adjusted the pricing if I remember correctly, at least twice in the last few years. So they've adjusted the pricing on the smaller licenses and now they have like a clear revenue-based pricing model on Shopify Plus as well. But the fun part is that if we're having a look on any larger migration that we've done typically, the TCO is dropping from 30% to 70%, so from one third to two thirds, and you're getting the same set of features.
Speaker 3:You're getting a easier solution architecture to kind of host and maintain, because Shopify will be taking a big part of that. Shopify will be handling a big part of that automatically through the platform. I'm not sure if Shopify will be able to do kind of a pricing model that's going to be fitting all of the types of clients that they're going to have on Plus. What I'm thinking is that we might be seeing kind of an enterprise pricing version coming at some point soon. But this is me guessing completely out in the wind. I don't have any information and if I would, I'm going to be able to show it in the in the book no inside information from the additions event, then no, nothing that I've heard.
Speaker 2:Let's let's elaborate on that point a little bit. So we talked about the original starting point of um for shop for us, d2c. Uh, very small one-man bands, etc. How has the profile of a typical Shopify prospect changed in your perspective?
Speaker 3:That's a really, really good question. So eight years ago and this is like a long way ago a typical Shopify prospect in our pipeline was kind of a DTC brand, maybe a small B2C merchant, maybe doing a few million pounds or euros online, maybe not even selling more than into one market. So they have one language, one currency. Three years ago we were kind of already seeing this, or four years ago we were getting these bigger like global, international D2C brands coming over.
Speaker 3:I think one of the biggest builds that we did at the time was a Swedish watch brand called Daniel Wellington. I think they were serving customers in like 65 different markets. Could have been even more. They had been running on e-commerce tools at the time, having kind of a really complicated tech stack to manage.
Speaker 3:I think they had like 75 people working for their IT and content management when we were completed with the migration.
Speaker 3:They were basically running on a few different storefronts and I think their team size is at the moment like 15 people or somewhere in the ballpark.
Speaker 3:So kind of the impact on the reduction on the complexity was kind of seen on the team size In the last year, in the last 18 months. What's kind of really visible in our pipelines at the moment is at the moment is kind of larger retailers, so department stores having multiple stores there's one in UK that we can talk about in a minute Retail chains having even 100 different retail locations and they're going to have a lot of complicated like OMS needs. They're going to have maybe more than one currency language on this side. They're going to have a lot of technical complexity in these builds. But the fun part is that these type of retailers are organically coming to us at the moment. So like there's definitely a change happening in the market at the moment with the retailers, and I think one big thing will be for them will be around TCO Kind of that whole market macros, the economic conditions that we're seeing in most of the world at the moment. I think they're kind of favoring Shopify as a platform, really a lot.
Speaker 2:You said that organically, this is coming to all of you. Yeah, so that will be a byproduct of the marketing and sales work your guys are doing and the engagement with clients. But what do you think from a plus feature of Shopify has moved the needle most for those enterprise scale decision makers that are making them want to talk to you about this moving Shopify?
Speaker 3:It's a good question. I don't think that there's one, but there's kind of a list of features and kind of the modularity or kind of the composability within Shopify. Shopify isn't known to be kind of a composable commerce stand, but if you really consider what you can do with Shopify, plus, storefront is a good example. You can have a native theme-based storefront, which is a really good option for most. If you don't do any other digital channels than your online store, then a native storefront will be most likely a good option for you.
Speaker 3:But it's not the only option. You can do a headless storefront. You can do multiple types of headless storefronts. You can do one that's going to be hosted by Shopify through their Hydrogen and Oxygen stacks. You can do like a complete custom headless and just do Shopify backlinks Kind of the composability comes in also with payments and a shipping option.
Speaker 3:So you can basically pick any payment method that you want to have in the checkout. Obviously, shopify favor Shopify payments because they're getting their commissions through payments. Always. You can choose add-in if you're going to be a bigger retailer. Like, add-in at the payment option on Shopify was kind of a must-have that they can win in the enterprise space.
Speaker 3:Regarding third parties, you can decide what you want to use for email or the CRM. Typically we go with Klaviyo, but you can go with Braze, you can go with Bloomberg, you can decide, like, what you're gonna pick and then kind of put into the stack. And the beauty is that all of those services are natively integrated so we don't need to spend any time or money kind of building an expensive custom integration on those. And then on the backend side it's kind of that standard API. It's like standard, consistent APIs that are well-documented. So if you need to integrate your PIM, your ERP, your warehouse management solution, we're going to have APIs that we can deliver that. To top everything off, they have the easiest to use interface admin UI for any kind of a business user working with product data working in their CMS. So I don't think that it's going to be about like one feature, it's like everything that's going on in the philosophy, how they're building the product.
Speaker 2:And does that make it, as you've described it, kind of semi-composable?
Speaker 3:In my opinion yeah, you can kind of the composable term as it is it is more like towards microservices in the brain and everything through APIs, which, at scale, is kind of an idea that could still work, but it comes with a cost. It comes with a cost that you're going to need to have a super genius.
Speaker 3:CTO in-house that's going to kind of drive the process to development that the ongoing service is to support all the time and obviously that the actual cost of paying those license fees hostings to all of those integrations that you need to run.
Speaker 2:And then which will be fire, kind of getting the upside that you can pick the components and the way how do you want to build it, with certain limitations, but managing and hosting the solution which is going to it's going to come with a fraction of cost compared to like a true composable solution okay, and, and talking about the solutions and the proposition to enterprise clients and trying to win them round to shop by being the right product, can you share a particular success metric or similar, from a recent large client that helped convince the board and the stakeholders that this is the right choice?
Speaker 3:I think the last one is quite often that everything is focusing at the moment and it is TCO, so like I can mention Salesforce Commerce Cloud as a platform that we quite often are migrating from.
Speaker 3:This isn't official numbers, but what we typically see are going to be costs that are going to be reducing the TCO by like 50 to 60%, even 70%, and that's a number that, like any board, any management team, any e-commerce team, can ignore, like if that's going to be the level of cost that they're going to have with the new setup based on Shopify and not having to limit down on any other requirements that they would be needing to have in the current or the new solution. I think that's kind of a pitch that we're going to be willing to make any day.
Speaker 2:Okay, and that's hard to argue, that kind of number right.
Speaker 3:It's impossibly hard. There's been cases where things still go through. Well, won't go through, but I think it's a number that everybody will be eyeing.
Speaker 2:Even more carefully at these things, and you've talked about dextes, of the large scale implementation. We touched on it. I mean you and I have spoken about it a number of times. Yeah, what is a good example of a really complicated integration? You've had to bolt onto Shopify, and how did you keep it all under control?
Speaker 3:Well, I think the use case that we can talk about now would be obviously Fennec, the known retailer in the UK, mostly based in Newcastle but having eight different department stores, not going into specifics of what we deliver with Fennec.
Speaker 3:But I think this is what we see with retailers that they're going to have the external point of sales, they're going to have their own ERP, even multiple ERPs. If they're going to have their own ERP, even multiple ERPs, if they're going to be department stores, what happens quite often is that they're going to drop ship, so they're going to have their suppliers ERPs or inventories being integrated into their ERPs. So, like when we're going to actually get an order to Shopify, we're going to get the order information back to the ERP and we're going to send get an order to Shopify. We're going to get the order information back to the ERP and we're going to send that order information to the actual vendor who's going to then fulfill their order, confirm the fulfillment, and we're going to integrate the information and the data flow coming back to Shopify once again.
Speaker 3:So the whole complexity in the order flows and then kind of the omnichannel process is where we're going to be buying online, picking up in in-store uh we might even have like clienteling solutions that need to be working online and offline, so making sure that we're treating kind of the vip customers in the best possible ways, both online and offline. There's like compared to adidas brands I don't even know that kind of the multiplier that we should use around the technical complexity that we're going to see with the larger retailers, like everything will be multiplied.
Speaker 3:So I think Benid was like a super nice case, to deliver in the UK, just to kind of showcase what we can deliver on Shopify Plus, what we can deliver on Shopify Plus. Obviously they had a great team on their side to kind of deliver everything from IT, from their digital product side and like everything that they were doing.
Speaker 3:So that was a fun build in a way a really demanding one from a different point of view. I was obviously the lucky one to be just kind of to be part of the discovery process and then, when the actual heavy lifting started, our delivery teams took over and then they did all of the coding, support and integrations and so forth. But that was kind of a landmark for us in the UK and you've talked about the different elements ERP, crm, pim, point of sale.
Speaker 2:In your view, if the right groundwork's not done, what's going to blow up first? What's going to go wrong first?
Speaker 3:The first thing that's going to blow up without the proper groundwork will be the actual project itself. So we're going to have an issue in the implementation space.
Speaker 3:So, like a proper discovery would be like we always do a discovery but, like the extent and the level of details that we need to go through in these discoveries, it's completely different. I think the discoveries is going to be like two things defining the technical scope what we need to deliver but also focusing on the technical scope. Or we need to deliver but also focusing on the business outcomes we actually want to achieve. Uh, I can give you one good example of like a typical outcome that we might see. So especially with the larger, like enterprise or retail clients, what we've seen late a lot in the last two years is that they might not have?
Speaker 1:like a clear place for centralized customer data.
Speaker 3:So typically the point of sales might be owning the retail customer data and then the online store might be owning the kind of the digital customer data and, if they want, to do any email communication, any kind of personalization.
Speaker 3:They haven't been able to combine and merge the data that we can kind of harbor at the same time with our experience, both online and offline. So Shopify is actually great in here. So we have like a standard data model that we can share across everything that will be integrated with Shopify. So in quite often, or in most of the cases in the last two years, we've actually migrated the point of sales, transactional data meeting customers and then their purchases that they've done in the retail stores back to Shopify.
Speaker 3:What this allows us to do is that, like if we take our email marketing solution like Klaviyo instead of having 200,000 online orders, we might have 200,000 online orders plus a million purchases what those same set of consumers have done in the retail stores. You can kind of imagine that the impact and uplift that we're going to get in the power of the email marketing that we're going to be able to do with so much more data yeah, yeah, absolutely, we'll get on to data as well.
Speaker 2:That's going to be another part of the conversation, for sure. Um, the next question I want to ask you is around um shopify components that they've added in, but obviously that you've been to the additions event and there's probably some other stuff they're talking about, so you can either answer with either some of this already there or some of this coming. But what component on Shopify Plus is, in your view, quietly solving problems that most people haven't spotted yet? That's a tough one. Keeping your toes.
Speaker 3:Yeah, again, I'm not sure if there's gonna be any tough one Keeping your toes? Yeah, again, I'm not sure if there's going to be any single one. I think this isn't me kind of ditching to answer the question, but I think the ones that I was most impressed were actually around B2B, so like Shopify is really evolving their B2B presence. One that was pretty impressive was AI as a whole, so like obviously they introduced more features on their sidekick, their kind of chat pod or AI service. That has been around for a while, but it's kind of becoming to be more like an authentic type of an AI agent that the merchants can use.
Speaker 3:And then they were introducing AI services, or layer of AI, into their own themes as well. So you're going to be able to produce sections in your themes, and if I would need to pick from those three, I think the sidekick would be maybe the one that's going to actually answer your question the best, because if the merchants don't know what to do, sidekick is basically a conversational agent that they can try to figure out if there's anything wrong with their business or shop.
Speaker 2:If I actually get the thing resolved through the AI and it's competent, because some of if I actually get the thing resolved through the AI server and it's competent, because some of these AI support tools don't necessarily work that well.
Speaker 3:I'll maybe answer in a way that I haven't personally ever tried it, so like I don't have any first hand experience, Maybe the first version wasn't kind of really there yet, but now that Shopify has kind of been coming kind of the or bringing the kind of agentic AR or like more advanced AR layer into the Sidekick service, then I think it's going to be close this time.
Speaker 2:Okay Makes sense. And here's another scenario for you and we're looking at things like time scales, scalability and delivery. So you're talking to stakeholders standing at the tournament board and they come to you with a proposal for a global rollout in nine months. What are the key variables you're thinking about that determine whether or not you actually say yeah, that's realistic or no. We need more time.
Speaker 3:Great question. I mean the first one will be kind of the technical solution that needs to be delivered, so, like story phone will be one component, will there be a custom business logic? Do we need to actually like build some proprietary piece of like custom applications or something like those, what the integrations will look like, how we deliver the integration.
Speaker 3:Is there already a service like patchworks in place, like an IMPath layer, where maybe, even in a lucky case, we're going to be able to use the other half of the data flows that they would have between the IMPath and their current uh backend stack and we would be only rebuilding the part between shopify and the ipass layer?
Speaker 3:now, that's kind of the first, like a quick overview on the tech scope, like what do we actually need to deliver? Uh, then kind of the business impacts on those, uh, well-timed rollouts. Is there going to be a lot of dependencies on going live in different markets and different times? Will there be dependencies on different like solutions or components of the projects being on time?
Speaker 3:And then the third one is obviously like the resourcing on both sides, like I think the technology part quite often will be. I don't want to say easy, but like it's something that we can kind of map out and plan really well but the transformational piece, the transformational piece on like how do we make sure that the stakeholders on the client side will be able to run the new solution in the best possible way?
Speaker 3:uh, it's kind of a combination of change management uh being kind of really on top of the scope all the time but then training the people to kind of make sure that they're going to be capable on doing the CMS part, managing orders, running their customer service. And I think that's actually a part that's completely different on an enterprise scale, Like, again, if we come back to the industry, brands quite often where they start their migration and where they're going to end up there won't be a massive change in the way how they kind of do different processes in the business.
Speaker 3:Then when we go on enterprise scale and let's say that we're going to change their e-commerce platform, we're going to change their customer service, we're going to change their email marketing service. It's going to mean that there's going to be maybe like 100 or 200 people that are going to be running their day-to-day work on a different software and that's going to require a lot of support, a lot of transformational support, that they can be sufficient and kind of succeed on the new solution. So kind of the tech piece, but the transformational piece being maybe even a bigger one that we can evaluate the timeline, the realistic chances of being live within.
Speaker 2:The nine months time frame that they were requesting in the first place and it's interesting, you mentioned the team their side right, but you've talked about it in the context of kind of coming up to go live and then post go live.
Speaker 1:Do you think?
Speaker 2:at enterprise scale. Actually, they need a project team on their side of the fence to make sure everything is managed from day one, Absolutely.
Speaker 3:Like always, that's a big red flag to us.
Speaker 3:If the client doesn't have a project team, they need to have a good product owner, a good project manager, somebody that's going to be taking care on their part around the communication, setting up internal workshops, making sure that their partner will have access to X, Y and Z. It's always kind of a must-have and typically the bigger the client, the bigger the teams will be, which is always kind of another thing on making it harder to have successful communication throughout the times. Like there might be somebody from marketing, somebody from IT, somebody from digital, somebody from logistics, one from finance and we need to make sure, as a vendor, that we're always communicating respectfully for each on making sure that they're going to be happy with the progress and having even more importantly, having the same understanding of the scope that we're actually delivering for.
Speaker 2:Yeah, makes sense, and often we don't see that. From our perspective, we don't see the end client necessarily having a separate or a dedicated project team, which can lead to delays, as you've probably experienced. Yeah, where do you think teams over-engineer the scale? In doing so, potentially slow down the process?
Speaker 3:I think the easy and kind of even a bit brutal answer would be that sometimes we listen to the customer too much. It's a little bit elaborate because it sounds worse than it is. The larger clients can be even is the larger clients, or it can be even like mid-market clients, but like sometimes clients have clients fixated ideas on their processes being like completely perfect at the point when we start the project.
Speaker 3:There's two options we can always try to reproduce their processes and then the way how they do order fulfillment or how they do customer service. But the way how Shopify works is that there might be kind of a better way how to do it. That's going to be through a ready-made third-party application that's already integrated, but the impact might be that it's going to result the end clients in a need that they need to actually change their process and you need to be confident enough that you can actually challenge that the customer to kind of rethink some of the ways how they've been running their business so far.
Speaker 3:I think that's kind of always a part to part of a successful collaboration that there needs to be kind of a demanding and challenging conversation happening all the time, like is is the solution that we've now decided to go for actually the best one that you want to have in the long term and I think that that's the biggest thing Like, if we always go with the option, what the customer is thinking that we're going to reproduce the exact same way. How? We've been running these things that might be causing a lot of technical complexity and fluct uh fluctuate up that it's going to expand the budget and the time and perfect is the enemy of good, as they say it is.
Speaker 3:I think it's. You need to be good enough that you can complete and go live good enough, to kind of go live with the solution. But part of the pitch, what we do these days is that like we need to be good enough and then we want to go live as quickly as possible, like in a reasonable way, like not with a poor product but like a good enough product. But the actual work will start afterwards.
Speaker 3:We don't get the return on the investment on the day of the go live, but the client won't be getting the ROI on the day of the go live. They're going to get it six months later. Two years later and the bigger the return on that investment for the migration will be.
Speaker 2:the more we're going to, the more we kind of need to put effort on the post-go live times and making sure that they're running, that the solution has as well as data sure that they're running, that the solution has, as well as data, and, in your view, what KPI tells you that the site's architecture is future proof, before they start to get traffic spikes that are going to prove it.
Speaker 3:Well, we do kind of an extensive testing on the kind of larger and enterprise cases. So yeah, UAT testing, integration testing. We have obviously sandboxes and kind of testing in which we run everything.
Speaker 3:We don't need to do kind of load balancing or everything that was kind of typically done in the old worlds with custom technology. So Shopify already has a lot of things in place to kind of even support it in the testing phase. But basically we have a testing plan that's going to be structured in like four or five, six, seven different components and like when we get a grid line in every single one, we're going to go live with the solution. That's kind of a simple, simple answer in a, in an answer in a question that we could kind of talk about for hours.
Speaker 2:Makes sense. So, given everything we've talked about, what I would really like to know and I'm sure you don't have the exact answer, because if you did, you'd be a very wealthy man, but in your view, by 2030, what will be the biggest difference between a Shopify build now and then? You can't talk about AI, oh yeah.
Speaker 3:Well, I'll frame it like this In 2030, we're going to have two types of builds happening, Ones that are going to be won't use the two letter word here, but that are going to be done super quickly through automated services that are existing on the market. Second one is that we're going to have more and more builds that are going to have several hundred million. Gmb coming over to Shopify. That are going to be global builds on a massively large scale and they can be. Dtc.
Speaker 2:they can be B2B, they can be retail and is that, if you look at those two types of builds, do you envisage Woolman delivering both those supporting with one and being heavily involved in the other?
Speaker 3:We're going to invest more in the latter. So obviously we've been building our own skill sets, the roles in the organization, the way how we offer services to be maybe slightly supporting more than the enterprise customers. But then we've also kind of inbuilt kind of the structure that we have in the organization is that we have different customer teams so, depending on the client requirements and the needs, we can always kind of assign a right type of a team for them, which is kind of making our life easier and making sure that the customers are like getting the type of the support that they need to.
Speaker 3:but yes, I would there's always kind of a ambitious side to me, to us as a company, that I think we're kind of always aiming to, always aiming a little higher. So like I would want us to kind of do even bigger and larger cases in 2030.
Speaker 2:Interesting On that note. Then we've talked about two types of builds. We've used the AI effectively build and I know I said you couldn't use the phrase, but I'm going to have to and then the bigger, 100 mil plus GMB builds. Do you then think that AI generated storefronts, for example, will actually make agencies obsolete?
Speaker 3:I don't think that they're going to be obsolete. There's going to be maybe a set of clients where the AI produced storefronts will be good enough. Be good enough. But if we go into a set of requirements. What like a larger D2C brand, like a big retailer and enterprise client, will have? I think they're going to want to have ownership on a pixel level, on a feature level with their storefronts.
Speaker 3:And in their cases on a feature level with their storefronts and in their cases, I'm envisioning that AI will be able to reproduce some of the code, some of the content on the website, but I don't think that it's going to be completely creating everything, all of the components, on the storefront side. But for the smaller merchants that are going to be happy with the good enough type of approach, I think AI can already deliver almost everything on the storefront side. So it's going to be like already here in the next few months.
Speaker 2:And that is going to change the cost model as well, isn't it? It is so in theory, what we're almost suggesting is there's going to be a big gap between the bottom end and the top end cost modeling from the Shopify perspective.
Speaker 3:I think so too. I think that the impact on the AI and the ecosystem will be twofold. We're going to see from the technology provider's point of view. I think the ones that are going to have like a tiny pinpointed application serving a small thing somewhere in the front end or in the customer service side, I think they're going to be maybe having problems where these agentic AI services will be taking over bigger proportions of the whole place.
Speaker 3:I think customer communication will be most likely one where we're going to have one unified AI agent taking over everything that we do for the customer communication, so customer service chats, emails, social media communications and so forth.
Speaker 1:So that's what I'm thinking that will happen, kind of on the tech landscape side.
Speaker 3:on the tech landscape side.
Speaker 3:And then for the agencies, I think the amount of billable hours that aren't actually adding a lot of value will be reduced. So if us, or someone else, have been having big retainers where we just do storefront developments through our roadmap ideas, I think those are becoming less. But then services, where we're going to be on a strategic level, thinking on the clients, quarterly earnings like more revenue, increasing the arbitrary value, increasing conversion, opening up new markets, and we're going to be on a strategic level, I think those won't be going away.
Speaker 3:So it's going to be a different form of partnership that we're going to have agencies having with their clients.
Speaker 2:As an example, you've got a retailer 100mlplusGMV just about to start its first large Shopify project. What is the one pitfall you're going to suggest to these guys to really focus on and make sure they avoid on day one?
Speaker 3:Do you mean like in the implementation or like during the post-call office?
Speaker 2:As in prior to starting the implementation. Obviously, you've been through this a few times. Yeah, not many of these builds have happened. If you're going to have one thing to really focus on, to really make sure you avoid that pitfall that you might have seen previously, what would it be?
Speaker 3:Stay away from RRP processes. I don't yeah, it's kind of a yes and no type of an answer. There's been good RRPs, but quite often they're just like a 500 list of questions or requirements that don't have to do anything with the business. The main piece of advice would be that focus on the business outcomes, like why do you in the first place want to engage in the migration and what's going to be the primary business outcomes that you want to get out from that? It can be the lower TCO. It can be that you want to find ways how you can increase the AOV or customer lifetime value.
Speaker 3:But have clear business outcomes and start with those in the conversations, where you're kind of meeting with vendors and other partners that you want to work with. I think it should be always about the business. The technology should be there to support the business, not the other way around.
Speaker 2:Yeah, it makes sense. Well, I'm going to come back to you in five years' time on the 2030 calls and we'll see how you go on. Last question yeah, there'll be lots of other agencies listening and for those that are, what skill sets do you think they should be hiring now? There will be lots of other agencies listening and for those that are, what skill sets do you think they should be hiring now that are going to matter in the next five years?
Speaker 3:There's one thing that won't be going away ever and that is kind of having the ability to understand different types of businesses. So, like you can always find technical skills or I don't want to undermine that the technical skills that we have in the organization they absolutely like massively crazy. But like I think if AI will be taking a part of the technical development or streamline in those processes, what we're going to need even more in the future are going to be people that are kind of understanding businesses, different types of businesses.2C retail businesses, b2b businesses.
Speaker 3:I think that's going to be applied through finding the right type of people, but also the way how you can build services. So not just to kind of deliver those available hours, but think on, if you understand their business. What's going to be the best way that, how you can kind of add value for them?
Speaker 2:Perfect. Well, on that note we shall finish. Thank you for joining us on another episode of the podcast. That was incredibly insightful for me and I think some of the audience will really, really enjoy getting a real deep dive on the future of Shopify. Thank you, timmy. Thank you really really enjoying getting a real deep dive on the future of shopify. Thank you, timmy, thank you.
