When Should You Start Looking For A Shopify Alternative? Here Are 6 Tells.
Many brands start out their online journey with an entry-level all-in-one e-commerce platform. Shopify is a popular choice. In this article we look into five key tells that indicate that you’ve grown out of Shopify or Shopify Plus, and explore how to calculate the upgrade business case
Most startup brands start with a simple software‑as‑a‑service e‑commerce platform as the foundation for running their online business. When starting out, the most popular choices include Shopify and other entry‑level platforms such as WooCommerce, AbiCart and SquareSpace – for a few key reasons: those platforms are priced for brands with a limited budget, offer ready‑to‑use themes, and do not require any technical skills to operate. However, as the concept of Direct‑to‑Consumer e‑commerce continues to gain momentum, we see a growing fraction of startup brands that have a tech‑driven strategy, or are well‑funded with ambitious global plans that skip over the entry‑level steps and opt to launch on more technical platforms from the get‑go. Many brands however, launch their first website on one of the entry‑level solutions.
When/if business takes off on an entry‑level platform, it's just a matter of time until questions surrounding a potential upgrade or migration start to arise. Common questions are:
How do we know that we’ve grown out of our entry‑level platform?
What benefits will a headless or enterprise solution bring us?
What is the ROI of the features we are currently missing?
In this article we’ll look into the top six tells, letting you know that you have grown out of Shopify and should consider upgrading.
Tell #1: Your Shopify site is slow
The strong correlation between site speed and conversion rate is no secret these days. Neither is the correlation between site speed and SEO/Google Ranking for attraction of traffic. Shopify websites are not known for being fast, but with customized themes and extensions enabled, they can become incredibly slow. If you’re already on that plan, the only thing you can do to bring site speed up is removing extensions and custom branding. You will still not get close to what headless platforms deliver, but it can at least improve. Also, make sure you have the “Plus” package of Shopify – one of the few differences of Shopify Plus vs. the other Shopify packages is having more hardware to run on. However, if you’ve decided you need a faster site, it is most likely time to upgrade your e‑commerce software to a headless platform such as Centra, or CommerceTools – where the front‑end is fully decoupled from the backend.
Scaling is easy with a headless/decoupled setup, which enables you to support hundreds of thousands of site visitors at the same time, without slowing down your site.
Tell #2: You’re thinking about getting a PIM
There are many good reasons for brands to invest in a product information management software. However, doing it as a workaround to mitigate the lack of product information management tools in Shopify is not one of them.
You’ll of course be able to house all the product data that doesn’t fit into Shopify’s product model in a PIM. Variants and sizes, and the relations between them, product descriptions in different languages, for different markets and for different audiences, size charts for different markets, categories, collections and drops are all examples of product data that a PIM can organize in a systematic way. The problem is, it can’t be mapped over to the pricing and campaigning data in Shopify in a meaningful way, which means it can’t be used for driving revenue.
The better track to follow if you feel a need for a PIM is to first invest in an e‑commerce platform that allows you to house all product data you need to drive sales, and also link it to pricing, campaigns and stock. Centra has a lightweight‑PIM that supports just that, which enables other types of revenue‑driving features that are not possible with Shopify plus a PIM. For example, you can create both static and dynamic bundles, to drive increased AOV. You can also define how products should be merchandised towards different audiences. You might for example sell unisex prodcuts that should be merchandised in different ways in the men’s section vs. in the women’s section (while still being the same product in your warehouse).
If you’re still on Shopify and considering a PIM, you should consider upgrading your e‑commerce software first, followed up by investing in either a PLM or a PDM system. Only after that will a PIM be the next product to add.
Tell #3: You want to start selling wholesale
More and more brands consider adding wholesale into their sales mix. Correctly done, adding wholesale using a direct‑to‑retail approach can contribute to a growing brand’s business in several ways:
Wholesale can be a valuable branding channel that will boost your direct‑to‑consumer sales (although, done the wrong way, it can cannibalize it)
Brands can partner with their wholesale clients to fulfil global web orders quickly, making each wholesale client act as a micro warehouse for the direct‑to‑consumer channel
Brands can improve cash flow and de‑risk the business by taking in pre‑orders from retailers ahead of season
Brands can benefit from the increased volumes they can gain from running a wholesale business in the form of lower costs to procure and produce
Wholesale can in itself be a profitable channel
Shopify offers a product called wholesale, but it does not have advanced features or support for driving an advanced e‑commerce or direct‑to‑retail strategy. Centra has a powerful digital wholesale solution built for direct‑to‑retail that comes with the platform – out of the box. There are of course a few established third‑party wholesale alternatives out there too. Some, like Joor or NuOrder, have taken a marketplace approach to wholesale. These alternatives are great if you’re trying to reach a wider audience of buyers (just as Amazon is great for entering new markets where you don’t have good traction), but by using a solution that has a marketplace approach to wholesale, you’ll be putting your brand at risk of being exposed to copycats, or ending up being sold by retailers that don’t truly represent your brand. So if you’re running a brand with strong brand values, the best way to drive wholesale is to apply similar strategies and methods as you do in your Direct‑to‑Consumer business.
Leading brands now showcase collections on digital, non‑transactional wholesale marketplaces to generate interest and drive traffic. They are shifting their game by investing in data‑driven and creative digital marketing. The skills developed in the brand’s DTC department are being used for wholesale. Through e‑mail– and other digital marketing methods, these teams are able to nurture buyers with frequent, targeted (and re‑targeted), and personalized campaigns that drive up sales and conversion in wholesale.
This approach allows you to build personal relationships with your buyers, and protects your brand from copycats and/or ending up being sold by the wrong retailers. Also, with this approach your wholesale team and e‑commerce team can work side by side to maximize efficiency throughout your organization. So, if you're a brand that has a strong brand equity and wants to move ahead with a wholesale strategy – it’s a clear tell that you’ve grown out of Shopify and should look into a solution that allows you to efficiently operate your wholesale strategy without compromising your brand.
Tell #4: You want to grow abroad
Everyone knows localization is key to driving sales internationally – on some markets more than on others. Different markets accept different price points, prefer different languages, follow different influencers and are situated in different climate zones. Local payment methods can often increase conversion in checkout over 10%, and the best local shipping options can often add another 10% to that figure.
Shopify has recently launched support for multi‑market, cross‑border e‑commerce. However, you’ll still be locked and limited to Shopify’s specific feature set, which makes it hard to truly localize your e‑commerce experience with solutions that aren’t included in Shopify. If your plan is to grow substantially outside your home market, that’s the most obvious tell that your plans have outgrown Shopify’s capabilities.
Tell #5: You’re thinking about launching a second brand
There is a simple reason you don’t see many house‑of‑brands type companies running Shopify: There is no support for it in the platform. If you want to launch a second brand, you essentially end up with a second Shopify. You pay twice for everything, and you end up maintaining twice the amount of integrations.
With Centra, launching a second brand is as simple as setting up a new Store. All backend integrations can be used by both the Stores, to capture full synergies in operations.
If you are considering a business model with multiple brands, you’re probably best off migrating to an e‑commerce platform with built‑in support for this at the same time.
Tell #6: You’re looking into headless Shopify
With Shopify Plus you have access to (some) APIs, which makes it possible to run a headless store on top of Shopify. This approach circumvents many of the drawbacks of Shopify, including fixing site speed, making the checkout more flexible and allowing any design on any CMS, using the latest frontend technology.
To be frank, building a headless store on top of Shopify is possible, but doesn’t make any sense at all. You miss out on most things that made you go for Shopify in the first place: the low cost, the all‑in‑one tooling, the fact that you need no developers or technical skills. But you also miss out on most benefits that are generally associated with headless e‑commerce. You end up paying as much, or more, than a true headless e‑commerce setup would have cost to start with – while getting fewer of the benefits.
If you’re looking into headless Shopify, that’s the key tell that it is time to upgrade.
Upgrading is a revenue‑side business case
The reasons brands are upgrading from Shopify are almost always to increase revenue. Only in some cases we see cost‑driven business cases.
The more advanced e‑commerce platforms have multiple revenue drivers that are missing in Shopify, even if you opt for the biggest “Plus” package:
More advanced tools for attracting customers. Better tools for optimizing multi‑market SEO, better support for optimizing feeds for different markets and better support for running influencer collaborations and campaigns
Better tools for converting visitors to sales, much stronger support for localization, better delivery experience tools (especially outside of North America)
Better tools for driving average order value up (e.g., segmented and personalized pricing and campaigns, advanced bundle functionality to drive upsell throughout the purchase process)
There are some cost advantages to be captured as well. We worked with a brand that had two full‑time employees with the job to copy‑paste data between different Shopify storefronts. This type of work is no longer needed when migrating to a more advanced e‑commerce software. If you rely on SEM, you’ll benefit from lower advertising costs thanks to better supporting SEO.
Most often however, the reasons to upgrade come in on the revenue side. A business case needs to be developed based on each brand’s individual conditions. Usually it comes in at about 20‑20‑20: 20% more traffic, 20% higher conversion rate, and 20% higher average order value. However, moving to a headless solution also comes with a cost. For brands below 1 M USD revenue, it may often make sense to stay on Shopify until hitting that threshold.
If you've made it this far, you're probably experiencing pains from at least one of the tells above. At Centra we’re continuously building our platform for brands that operate a global online business. This includes solving the above tells (and many more) in an efficient way.