Shopify Augmenting Logistics with AI and Automation

Shopify is becoming a Logistics Company Too

Shopify is evolving as an E-commerce platform. From moving into cannabis to third-party logistics, Shopify is one of those companies tethered to the increase of E-commerce in society and consumer trends.

Is Shopify really the “Amazon of the North”?

I think Shopify really is the “Amazon of the North” and now it’s spending $1 billion on fulfillment network.

It’s actually launching a network of fulfillment warehouses and shipping logistics capabilities in the United States. While Shopify is no JD.com or Amazon, that it’s even getting into logistics is really interesting.

Upgrading Logistics and Fulfillment with AI

Shopify recently acquired 6 River Systems for $450 million to expand its AI-powered fulfillment network. I think this proves it’s elevating its game to create its own manifest destiny as a company. Shopify to me is a rare Canadian startup that manged to scale globally.

So what is 6 River? 6 River Systems Inc., a Waltham, Mass.-based warehouse automation startup best known for its Chuck autonomous mobile robot (AMR), was acquired by Shopify for $450 million. That’s a considerable sum but as we enter the age of automation, Shopify needs to keep up.

Shopify’s Fulfillment Network is being Upgraded

A 3PL is a link in the supply chain brands use to outsource part or all of a business’ distribution and fulfillment services. The market for 3PLs providers exploded following the birth and exponential growth of ecommerce. Most Fortune 500 (86%) companies and 96% of the Fortune 100 use services like these.

Shopify can be more than just an E-commerce platform. In how it helps to E-commerce and small businesses it can help automate the future of commerce.

At Shopify’s Unite 2019 partner and developer conference in June, it announced its Shopify Fulfillment Network, which uses machine learning to ensure timely deliveries and lower shipping costs.

Shopify is a leading multi-channel commerce platform with HQ in Canada, but needs to keep pushing its technology to keep up with Amazon in China. It is now already bigger than Ebay. I think Shopify still has incredible potential to keep scaling.

With the acquisition of 6 River Systems, Shopify will add a team with decades of experience in fulfillment software and robotics which bodes well for their automation of fulfillment networks for the future. As a futurist, I believe this might be one of their biggest and most important acquisitions. I cover the future of retail, and Shopify getting more into AI is key for it to keep up.

In June, Shopify laid out a plan to expand its fulfillment business to help merchants using its e-commerce platform deliver products. I think Shopify’s Fulfillment Network can become something important, not quite in the league of JD.com and Alibaba in China, but nonetheless relevant for North American retail.

U.S. Merchant Convenience is Key

Shopify needs to scale its Fulfillment Network quickly to provide United States-base merchants with a network of distributed fulfillment centers, coupled with machine learning to ensure timely deliveries and lower shipping costs, putting their brand and customer experience front and center.

I think Shopify needs to scale these services above all others. Because this is how you attract & retain small businesses and E-commerce shops, Shopify’s primary clients.

As E-commerce keeps taking marketshare from physical stores, companies like Shopify can keep growing at enormous rates. So Shopify’s fulfillment centers already span California, Georgia, New Jersey, Nevada, Ohio, Pennsylvania, and Texas. The network, which currently is only available in early access, supports merchants that ship between 10 and 10,000 packages per day.

Shopify needs however to improve this and to eventually support between 3 and 30,000 packages per day.

Robots & Automation in Retail Fulfillment — Shopify?

On an earnings call in August, Shopify’s CFO said the company will bring seven warehouses online (Retail Dive) in 2019, and over the next five years, it plans to invest $1 billion in its fulfillment network.

Shopify believes that adding the robots to its fulfillment network “will increase the speed and reliability of warehouse operations by empowering on-site associates with daily tasks, including inventory replenishment, picking, sorting, and packing.” This means, Shopify is will become a leader of automation in retail fulfillment.

Robotics and automation will completely transform warehouse operations in retail within the next 15 years. JD.com in China are among the leaders in how this takes place currently in 2019.

Follow a Futurist, sign up to receive blog-rolls about breaking news in Business and Technology & related Op-Eds.