Brief:

• Shopify on Tuesday debuted a mobile shopping assistant app called Shop, according to a press release. The new app from the e-commerce software firm is available for free in the iOS and Android app stores.
• Shop covers a range of services, from product discovery to payments, and provides real-time delivery updates. It leverages Shopify's one-click Shop Pay checkout feature, previously called Shopify Pay, to handle transactions, and Arrive to track the status of online orders. Shop actually serves as an update and rebrand of the standalone Arrive app, TechCrunch reported.
• Shop users will receive personalized recommendations and updates from brands they prefer, including announcements around product launches and deals. The app also includes search filters that point users to local businesses and offer details on whether a merchant is offering shipping or pickup, along with return policies. 

Insight:

Shopify is launching an end-to-end mobile shopping app as e-commerce booms under the coronavirus pandemic, while smartphones accounted for 84% of e-commerce growth during the 2019 holiday season. The move shows the Canadian tech firm, better known for providing website hosting solutions for businesses, shifting more of its focus to the consumer during the public health crisis. In the press release, Shopify positioned the app as a means of deepening connection and loyalty between consumers and their favorite merchants in "a world of increasing physical separation."

Several key features of the app, including the spotlight on local brands and driving repeat business, could resonate with users. A recent survey of global consumers by Ernst & Young found that 34% of respondents are willing to pay more for local products amid the pandemic.

Small businesses in general are at peril as store closures and shelter-in-place orders persist, and many in the U.S. have grappled with red tape in receiving financial assistance from the government, forcing them to rely on delivery and pickup to stay afloat. Shopify is positioning Shop as a means of supporting those struggling at the moment, but the app also serves to drive more businesses to its platform and offerings like Shop Pay.

Shop has its share of larger brands at launch as well, including several from the direct-to-consumer category. Allbirds, Universal Standard, ThirdLove and Brooklinen are among the partners highlighted in a video promoting the app.

Still, a focus on smaller, nearby merchants could help differentiate Shop from a number of other e-commerce platforms receiving a windfall from quarantined consumers, including Amazon. Other competitors such as eBay have announced programs to support small businesses' shift online. Google last week also started letting merchants list products for free on its Google Shopping search pages. At the time, Google reinforced its work with e-commerce partners including Shopify, WooCommerce and BigCommerce.

Shopify needs to ensure Shop provides a seamless user experience for the app to gain traction. It is relying on Arrive and Shop Pay, which has processed over $8 billion in sales to date, to accomplish that goal, but consumers may not be as familiar with the Shopify brand given its deeper history as a platform for businesses.

A hard push to innovate in the increasingly crowded mobile commerce market comes as Shopify continues to perform well. The firm last week saw shares jump, making it the second-most valuable company on Canada's stock market, according to Bloomberg.