Pizzas in the post: Shopify challenges Amazon for slice of lockdown trade
Firms becoming more inventive to survive, and increasing numbers turning to the e-commerce platform
When the lockdown forced the Pizza Pilgrims chain to close, the company came up with an unusual solution to stay in business.
The company, with restaurants in London and Oxford and run by brothers Thom and James Elliot – who started out selling Neapolitan pizza from the back of a converted Piaggio Ape van – hit on the novel idea of posting pizza kits to customers.
The first 50 of the £15 frying pan pizza kits, which promise to make a pair of “banging” margheritas, sold out in 20 seconds. The company is now packing up to 700 a day and considering opening up a second of its 13 restaurants to satisfy the demand.
Pizza Pilgrims pivoted online almost overnight via Shopify, the Canadian e-commerce platform that sells the digital kit that companies need to build and run a website.
The Ottawa-based firm is challenging Amazon’s dominance by offering brands of all sizes an alternative route online. For a monthly subscription, its software allows companies to manage their stock, payments and logistics under their own domain and brand.
Shopify now has 1m companies on its books, ranging from small UK outfits such as Pizza Pilgrims to celebrities including Kylie Jenner and Kanye West, who use its tech to sell their respective makeup and clothing lines. Shoppers spent nearly £50bn on the platform last year.
The world has tilted towards the internet during the pandemic and there is a growing sense that the shutdown may be permanently changing consumer behaviour. Working from home has been normalised for millions of people, while pensioners have become converts to online grocery shopping.
The closure of big parts of the retail and hospitality trade has forced companies to find new ways to make sales. In the six weeks to 24 April, there was a 70% increase in the number of UK companies opening websites compared with the preceding six weeks, says Shopify.
Pizza Pilgrims had never considered selling online before, Thom says, but was forced to become inventive as the economy collapsed. The “most surreal moment of his life” happened last week when he was invited to join a business brainstorming session with No 10, only to find himself on a Zoom call with Boris Johnson.
Investors are banking on the evolving business model being good news for Shopify, with its share price more than doubling since the start of April. The surge has made it Canada’s most valuable company, worth $86.2bn (£69.4bn) after nosing ahead of the Royal Bank of Canada.
Shopify’s rocketing value has turned the spotlight on its German-born boss, Tobias Lütke, 39, who describes himself on Twitter as “CEO by day, Dad in the evening, hacker at night”.
An avid video gamer, he openly takes days off work to indulge his passion, broadcasting his Fortnite and Starcraft campaigns on the Twitch streaming platform.
Lütke has blogged about his decision to quit school at 16 and become an apprentice computer programmer for Siemens in his home town of Koblenz.
“School was not for me,” he wrote. “To me, computers were so much more interesting. They diagnosed me with all sorts of learning disabilities and started to medicate me. I wanted to leave it all behind. My degree is not recognised in North America so I am technically a high school dropout.”
Lütke met his Canadian wife while snowboarding in Whistler and eventually moved to Canada to be with her, starting the Snowdevil website, selling high-end snowboards, with the entrepreneur Scott Lake. The pair soon realised the software Lütke was writing for the site was actually more valuable, and Shopify was born.
Shopify has made Lütke one of Canada’s wealthiest people, with a $7.1bn fortune, according to Forbes. However, the father-of-three reportedly shuns the workaholism that often comes with business success: “I’m home at 5.30pm every evening. I play video games alone, with my friends and increasingly with my kids. My job is incredible but it is also just a job,” he said on Twitter.
He recently announced Shopify’s offices would not reopen until 2021 with remote working set to become a permanent arrangement for most of its 5,000 staff. “Office centricity is over,” he tweeted.
Shopify’s plans for the future include parking its tanks on Amazon’s lawn by building a warehouse and logistics network so that it can also handle shipping on behalf of its sellers.