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Walmart deal helps Shopify shares skyrocket more than 300 percent

Shopify shares have skyrocketed to all-time highs over the past few weeks, largely as a result of its new partnership with Walmart. Shopify is the first online commerce platform partner that Walmart has signed such a deal with. 

The agreement, agreed in June, allows Shopify – which bought warehouse robot maker 6 River Systems last year for $450 million – to put 1,200 of its merchants into Walmart’s marketplace

Walmart is America’s largest retail chain, with annual revenues of more than $500 billion. The vast majority of its sales are in brick-and-mortar stores, but the company has recently been making a big push into the digital space.

Shopify is a digital native, as it were, being a provider of small- and medium-sized online shops, similar to WooCommerce, Squarespace and Wix. It currently has approximately 500,000 merchants on its platform, for which it charges prices ranging from around $30 a month for basic online shops to more than $2,000 a month for its “Plus” package.

The company currently has a market capitalization of almost $130 billion, which is more than 300 percent higher than it was last year.

Satish Kanwar, vice president of product at Shopify, says: “At Shopify, we’re focused on helping entrepreneurs go from just an idea to becoming thriving, scalable businesses.

“By partnering with Walmart, we will be able to connect merchants with consumers across America within a trusted marketplace, helping merchants drive new sales while consumers discover new products they’ll love.

“Our expertise in multi-channel commerce, combined with Walmart’s reach, will allow us to create better online shopping experiences for merchants and consumers alike.”

E-commerce was booming even before coronavirus lockdowns in most countries around the world forced more people to shop online.

One of the consequences of the accelerated growth in e-commerce has been that huge numbers of warehouse robots are being sold.

Warehouse robots, such as the one built by 6 River Systems, enable supply chain companies to create a fully functioning material handling facility with weeks or even days, and change it around almost on a daily basis.

Previously, when the only option for automating a warehouse was conveyor systems, this kind of flexibility was not possible. Infrastructure was fixed to the ground and it was expensive to build.

Autonomous mobile robots don’t need any fixed infrastructure – they can find their own way round a warehouse and locate themselves as well as plug themselves in the plug point when they need recharging.

Shopify’s acquisition of 6 River Systems was a surprise to some, but it made sense because the company created its fulfillment network in September last year, and for the type of high-mix, low-volume product ranges its merchants deal with, autonomous mobile robots were the ideal technology for its warehouse facilities.

And given that Shopify has introduced a system where small shops can become delivery and pick-up locations in its US-wide fulfillment network, some of the 6 River Systems robots may find themselves in many small- and medium-sized shops across the country.

At the time, Tobi Lütke, CEO of Shopify, said: “Shopify is taking on fulfillment the same way we’ve approached other commerce challenges, by bringing together the best technology to help everyone compete.

“With 6 River Systems, we will bring technology and operational efficiencies to companies of all sizes around the world.”

Jerome Dubois, co-CEO and co-founder of 6 River Systems, said: “By joining Shopify, we’re changing the game of fulfillment.

“Together, we will help thousands of businesses improve their fulfillment operations, with an easy-to-learn solution that can more than double productivity and improve accuracy.”

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