Growing Shopify’s Fulfillment Network

THE CHALLENGE

My team was referred to as the 10x team, which was essentially dedicated to “10x-ing” the amount of merchants using the SFN platform/service. Our team was made up of a product manager, six software engineers, a content designer, and myself. We sought out to understand the questions merchants had when trying to understand how SFN was going to benefit their business and the pain points they experienced once they decided to try the service out.

Each week we set out to release 1-2 experiments in hopes of learning what merchants needed in order to try SFN for their fulfillment, storage, and returns. After releasing an experiment, if there were positive signals, we would pass on the data to another team within Growth to think through how to implement the design as a longer term solution.

Some of the metrics we were using to measure positive signals were the following:

• An increase in the number of SFN app installs

• An increase in the number of new merchants activated, which meant that they had added products in the SFN platform

• An increase in the number of merchants converting (deciding to use SFN as a service by sending products to one of the warehouses for their orders to be fulfilled)

OUR USERS

We were most focused on attracting merchants who owned small and medium sized businesses given the services SFN offered at the time. The size of the business was determined by its average number of orders per day. Typically these merchants were brand new to third party fulfillment as they were used to fulfilling orders on their own, thus had a variety of questions when they got started.

In order to motivate them to get started with Shopify Fulfillment Network and determine if it was a right fit for their business, we needed to focus on education and onboarding from the very start of their decision making process. They knew the ins and outs of their business but needed much more hand-holding when it came to understanding how to outsource their storage, fulfillment, and returns with a third party.

EXPERIMENTATION

In order to validate/invalidate ideas quickly, our team set out to ship 1-2 weekly experiments to sets of merchants. This allowed us to learn quickly and not over scope efforts in order to do so. The following list are some of the experiments we ran with a summary of each.*

*Unfortunately, my time on the Growth team at Shopify (within the Fulfillment Network vertical) was halted abruptly in May 2023 due to an acquisition. Flexport acquired a subset of employees working on the Shopify Fulfillment Network, as Shopify decided to discontinue investing in the physical fulfillment network. Due to this transition, I didn’t have access to the data we were tracking on these experiments and therefore need to rely on qualitative findings from my memory that I’ve tried to include below.

Free Shopify Fulfillment Network Trial(s)

One of the first experiments we released was a free trial as a means of drawing more merchants to try the service. The free trial was available to merchants already on a Shopify subscription. Once they downloaded the first party app, they would receive free order fulfillment, storage and returns for up to 75 units for a total of 45 days. We decided to use an in-app banner to display the number of days they had left in the trial, using time as a motivation to get started.

Although the trial was successful in increasing the number of new downloads of the SFN app, we did not see a significant increase in the number of merchants who were activated. We defined an ‘activated merchant’ as a user who had sent inventory to one of the warehouses and an order was fulfilled via SFN’s network. We decided to due a experiment with a few iterations of the trial, adjusting factors on the following criteria:

• Adjust placement/entry point of the free trial across Shopify marketing pages

• Include free trial as part of the Shopify Advanced Plan

• Adjusting the terms of the trial (i.e. The number of free units of fulfillment, returns, storage, increasing the number of days of the trial, etc)

Shopify’s Shop Promise + Shopify Fulfillment Network

Shop Promise is a product that allows merchants to display expected delivery dates to their customers while they are shopping. The date is intelligently predicted and displayed on store product pages, checkout and in the Shop app. Merchants were motivated to add Shop Promise to their storefronts because it was shown to increase conversion by up to 25%. One of the experiments we wanted to release was combining the two value propositions of SFN and Shop Promise and displaying it to merchants within the Shipping and Delivery settings during setup.

If a merchant decided to use SFN, they would automatically be qualified to have Shop Promise display on their product pages and checkout because the network’s capabilities met the requirements to be able to be delivered within 5 calendar days. Although this benefit already existed, it was not being broadly displayed to merchants who weren’t already SFN + Shop Promise customers. By integrating the two products into one callout card in Shipping and Delivery settings, we were hoping it would increase awareness and ideally the number of interested merchants. Unfortunately this experiment was paused due to organizational changes within the company so we didn’t have data to report back.

In-app Onboarding Videos

Many of the questions our Support team received from merchants who were getting started with SFN were about how to send products to the warehouse and the process after their products were received. In an effort to help merchants understand the end-to-end process, we created videos that were embedded into the onboarding steps in the app. Based on data we gathered from other similar Shopify support resources, we learned that short-form video education was most helpful to merchants looking for an overview of a product. Given the quick turnaround time, we created the videos by recording screenshares of the product with our own voiceovers, narrating the different steps merchants would take to get started.

Overall these videos proved to be really helpful to merchants in adding and sending products to the network, which had been known to be the most challenging steps in the process. Based on the high watch rate and the number of merchants who completed the first two steps in the onboarding journey, we decided to implement short-form educational videos into the longer term onboarding strategy and passed the results on to another team who would produce higher quality content.

Shopify Fulfillment Network + Shopify Collabs

Shopify Collabs is a first party app that allows influencers and creators to discover products from a variety of Shopify brands and generate commission links to share with their followers. In turn, merchants who own these brands are able to generate more visibility and gain broader traction in the market through influencers on social media. One of the methods in which this is effective is when merchants choose to gift certain products to influencers so that they in turn can document opening the product, providing a review, and sharing a discount code/percentage to their audience.

The downside to this marketing tactic is that it can be a time burden for the merchant to send out gifts to influencers all over the country. We thought that there was an opportunity for SFN to help with this part of the process. We set out to design an experience which would offer merchants the ability to send up to 30 gifts to their influencers, shipped and fulfilled for free. We decided to market this offer within the Shopify Collabs app, specifically within the Gift section of the Collab experience. Merchants would click a ‘Learn more’ button and be redirected to an automatic download of the SFN app if they didn’t already have it installed. From there they would add the product they were going to gift, send them to an SFN warehouse, and we would be able to automatically identify if the order was a gift for one of their influencers once they opted to send a gift through the Collabs app.

Providing an entry point for SFN on the Collabs app proved to be successful in the number of merchants who downloaded the SFN app. We had a couple of merchants go through the onboarding process on SFN and send the warehouse products to be sent as gifts. Although the number of merchants who set out to use SFN for their gifting wasn’t significant enough to build long-term, we learned that collaborating with another product/service within Shopify was helpful in increasing visibility of SFN.

SFN Monthly Subscription

In reviewing qualitative data from the Support and Sales teams, we discovered that one of the reasons merchants were hesitant about signing up for SFN was due to not understanding the pricing structure. Another team had worked on a pricing calculator feature on the marketing website for SFN which allowed merchants to select from a list of generic products to see the price breakdown of fulfillment and shipping per unit. Although this was helpful at a generic level, merchants were still lacking the transparency of pricing details as it pertained to their shop’s needs. The only way they could get a true pricing breakdown at the time was by working with a Sales representative, which was time spent not only on the merchant’s behalf but our internal teams, thus not being a scalable solution.

We brainstormed a method that took the guessing game out of pricing by providing a subscription model to merchants, ideally laying out a simple and transparent pricing structure without the hassle. Although the effort for actually building out a subscription billing service was out of scope for the purpose of this experiment, my team set out to understand the level of desirability from merchants by designing an A/B test of an in-app banner. Option 1 would state the $600/month fee and list out what the subscription included at a high level, and option 2 did not include the price but mentioned it was an ‘all-inclusive monthly plan’ and also listed out what it included. We wanted to A/B test the two options because we didn’t want the specific price to be the sole factor a merchant did not click ‘Yes, I’d like to learn more’, and wanted to gather as accurate of a gauge of interest in the monthly subscription as possible. If the merchant clicked on the button, one of our team members was going to reach out and understand their questions, concerns, and interest levels a bit more.

Unfortunately we didn’t get to ship this experiment because it was designed the same week Flexport acquired the Shopify Logistics arm of the company.