Everything’s going well for e-commerce firm Shopify, right? Just in our world it has recently inked or expanded deals with YouTube, Spotify and TikTok after all. But no, there are some problems at Shopify too, and yesterday the company announced plans to lay off 10% of its staff.
The reasons why are interesting for anyone who’s thinking about e-commerce for music artists. “When the Covid pandemic set in, almost all retail shifted online because of shelter-in-place orders. Demand for Shopify skyrocketed,” wrote CEO Tobi Lütke in a blog post.
So, the company expanded rapidly. “We bet that the channel mix – the share of dollars that travel through ecommerce rather than physical retail – would permanently leap ahead by 5 or even 10 years,” wrote Lütke. “It’s now clear that bet didn’t pay off. What we see now is the mix reverting to roughly where pre-Covid data would have suggested it should be at this point. Still growing steadily, but it wasn’t a meaningful 5-year leap ahead… Ultimately, placing this bet was my call to make and I got this wrong. Now, we have to adjust.”
The news came ahead of Shopify’s latest quarterly financial results, due to be published today.
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