Shopify Takes Aim at Salesforce, Bragging About Customer Gains

Shopify, the online shopping specialist, is making bold claims about its success in attracting large-scale businesses, including those previously loyal to Salesforce, reports CX Today. The company is touting "the mass migration" of customers from Salesforce to Shopify, citing lower prices as a key driver.

Shopify Chief Operating Officer Kaz Nejatian, in an interview with Bloomberg, took aim at Salesforce's pricing practices, stating, "The reason most enterprise software is so expensive is because it takes so many steak dinners to put it in your hand."

Shopify is touting success stories like Toys R Us and Casper, and industry experts like Scott Lux, EVP of Global Commerce and Technology at Esprit, support these claims. Lux suggests that Shopify's lower fees could save businesses up to 50% over three years compared to Salesforce.

Mattel Inc., another recent Shopify convert, cited the company's flexible pricing model, which allowed them to handle demand spikes for new products without incurring high fixed costs.

"Shopify has been extremely responsive to the complexities of Mattel's needs," said Subramanian Kovilmadam, Mattel's VP of Technology. "By moving from a large, annual licensing fee model to a more flexible and transactional cost model, transitioning to Shopify has also resulted in cost savings for us."

Salesforce, while quick to defend its position, acknowledges Shopify's growing presence. Luke Ball, Salesforce's Senior VP of Product Management, said, "Anything’s cheaper if you narrow the use case to one thing and say, ‘Oh, we’re cheaper for this one thing.’" He added that Salesforce remains the dominant force in the space, but conceded that Shopify is "a noticeable competitor."

Salesforce also claimed to have poached hundreds of customers from Shopify, including brands like Black Rifle Coffee Co., ReserveBar, and Hasbro Inc. Shopify, however, refuted these claims.

Despite Salesforce's larger overall revenue, Shopify is experiencing rapid growth, with revenue increasing by nearly 500% in recent years. This growth trajectory, combined with Salesforce's slower-growing commerce and marketing business, makes this a favorable time for Shopify to challenge Salesforce's dominance.

D.A. Davidson Analyst Gil Luria observed, "Shopify has added enough capabilities over the last few years that have made it a viable option for even the biggest e-commerce merchants. At the same time, Salesforce is deemphasizing its Marketing Cloud and focusing more on the Data Cloud, which leaves them vulnerable to losing e-commerce customers."