Shopify Unite 2021, the annual partner and developer conference, delivered much to get excited about. It also left us with some questions. How will bespoke themes transition to Online Store 2.0? Now that merchants can create payment gateways as an app, will there be extra fees? What is the future for Shopify Plus? We discussed the highlights and did our best to give you our predictions.

Show Topics

  • Troublesome theme transitions to Online Store 2.0
  • Enhanced developer toolkit with Hydrogen
  • Create payment gateways as an app
  • Calculate international payments
  • Improved developer experience
  • Shift in value of Shopify Plus

Show Links

Show Notes

05:14 - Troublesome theme transitions to Online Store 2.0

Ben said the new Online Store 2.0 will only be compatible with newer themes. Some highly-customized shops, like larger brands, will have to do a lot of work to transition.

“It sounded like a lot of the features they released where they referred to it as Store 2.0 or Online Store 2.0, OS 2.0, is only compatible with we'll call this new breed of themes, starting with Dawn. And so the question I have is, does that mean that no store can incorporate most of the things that were just announced until they migrate their entire Shopify store to 2.0? My guess is with existing headless stores that implement Shopify, that will actually not be that much of an issue. Because they probably don't leverage their theme at all. For people who are using existing themes or popular themes, my assumption is that the theme developer will release an update that makes it compatible with OS2.”

07:27 - Enhanced developer toolkit with Hydrogen

Ben said the new developer toolkit has improved connections and components that make it very exciting.

“I think that was the most exciting. I also had the biggest questions around when is Hydrogen going to be implemented with the more fundamental shift around OS2. It was very interesting and exciting. The question there is what is that transition period involved and look like and whatever. As a developer, the things that changed around their tooling was cool, where there was a direct connection, it seems like a much tighter connection to GitHub around deployment. That was actually a funny thing too, around Hydrogen, was it implemented Tailwind. It's great. They went all in on React server components and they also offer Oxygen, which is their own hosting solution. You can also host it yourself. But again, it reminds me a little bit of, at least in the Laravel world, Laravel Vapor.”

10:59 - Create payment gateways as an app

Ben said you can now create payment gateways as Shopify apps, but it’s unclear whether there are additional fees.

“My assumption is that means that anyone, whether you're - a firm's a bad example because they have a native integration with Shopify - but any of these FinTech companies who are either doing things around payment processing, they can offer their payment gateway by way of being an app. So I imagine is now being supported through being an app, but I'm not 100% sure of that. What wasn't clear to me either was historically, Shopify has had a policy that if you're using a third party gateway, there's an additional processing tax if you're not using Shopify payments. I don't know if that's still true.”

15:05 - Calculate international payments

Ben said there’s also a new storefront cart API that automatically converts to international currencies.

“They announced the storefront cart API. And so their use case was estimating totals, et cetera, ahead of checkout. I mean, you can already do that using draft orders and/or using the Ajax API. So there's storefront cart API, and then the storefront API, which enables them now to do, they described it as in context stuff. You can say, hey, this person lives in the state of California. And because of that, we will do things like show a certain flag, or actually maybe the storefront API was international currency. Where if your country's Canadian, you can change all the prices across the entire store to show Canadian.”

17:48 - Unify endpoints

Joel said Shopify has doubled down on GraphQL as their API with all of the new features leveraging it. It pulls together many end points to collect data in a central place.

“The way that they would have you set up GraphQL is this really complex configuration saying, okay, if they want to access, let's say a user profile, it goes to this endpoint, it gets the data. If they want to access orders, it goes to some other endpoint behind the scenes to get that data. It's almost like in their context, it's a reverse proxy. Reverse proxy is one URL that will pull together things from 10 different URLs behind the scenes and make it seem like a really simple central place to access things. So that's one way to think about it, particularly moving from Rest to GraphQL. It's a way to access a lot of different end points. Think of it like very technically in multiple threads. So doing parallel HTML or HDP requests to return with one response. So that's one way to think of it, is a way to unify a lot of old endpoints into one centralized one.”

19:05 - Improved developer experience

Joel said the use of GraphQL also improves the developer experience by allowing only specific data to be loaded for each customer.

“When Facebook built this out, I believe it was because of their mobile apps. A lot of mobile apps really like to optimize how much data is transferred, so that if you're on cellular and things like that, you're not downloading too much data from an API. What it lets you do is it lets you specify very specifically each data point, each attribute on a customer. If you just want the name and the email, that's all you get back instead of 20 different attributes about a customer. So it really simplifies the amount of data that comes across HTTP to optimize bandwidth. Then at the same time, rather than having to go to different endpoints to download the orders and download the customer, you can get it all in one fell swoop to simplify that developer experience in terms of managing data within even a web page with React and Vue and so forth.”

28:48 - Growth in Plus went without mention

Ben said the pandemic saw a huge amount of growth in Shopify merchants in Plus, but Shopify didn’t mention Plus during the Unite conference.

“Everything I've heard about the market of Plus is that it's doubling in number of merchants. I do know that during the pandemic, if you look at their financial quarterly reporting and stuff, it's all in there. Shopify as a platform grew enormously in the number of merchants on their platform during the pandemic. Their Shopify Plus merchant base also grew substantially. The entire platform grew disproportionately at the non-Plus. But if you have a 900% increase in merchants and only 20% of that growth is Plus as opposed to maybe previously had been, you’re having 28% growth in Plus. 20% given the actual absolute numbers that Shopify reported in growth, it's still a huge growth.”

30:44 - Shift in value of Shopify Plus

Joel said many of the new things rolled out addressed concerns and trends that were on customers’ minds, but it has made the distinction of Shopify Plus less clear.

“It is interesting that there wasn't too much targeting the Plus merchants. I think the solutions they are coming up with clearly are addressing a lot of issues and complaints, as well as trends that we've seen for quite some time. What's interesting is that a lot of them are being rolled out to everyone rather than just Plus. I don't know. It makes me wonder if they're going to actually add more on the Plus side or not. You'd think this would be the point where they announced that kind of a thing, but it's very curious because they're kind of starting to commoditize a lot of this stuff that could be Plus only. Do you think that if all of that functionality is available for non-Plus merchants, that plus merchants would quote-unquote ‘downgrade?’ Because it's not like they're losing functionality, but I guess the question is whether the value of being a plus merchant is still there?”

33:27 - Eliminate the Shopify commission

Ben said you no longer have to pay a commission on your first $1 million in revenue.

“Regardless of whether or not you're in the Shopify app store, it previously had been, I think, 20% of your revenue. And now it's zero for your first $1 million in revenue. So honestly, I don't get warm, fuzzy feelings all that often around some of the changes that Shopify announces. Oh, that one. I felt good. I think it's a good one. I'm getting a free million dollars. It's great. You can actually think about it though, is it's actually not a free million dollars. It is a $250,000 investment in every Shopify app developer. So they were taking 20%, effectively. They're giving you back that 20%. And so maybe it's not 50 it's $200,000. It's a $200,000 investment, which eliminates friction for developing on their platform. I think it just varies. It also maybe will put some pressure on these other marketplaces.”