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In the fast moving, ever evolving world of e-commerce, adapting to new trends and embracing cutting edge technologies is absolutely crucial for success.
In this post we will examine “Sidekick” from Shopify. This novel AI chatbot assistant is specifically designed to assist Shopify merchants with various dimensions of their online business operations, all from the familiar comfort of their existing Shopify dashboard. This post will look at what the tool can do, and whether it is worth the investment.
Introduction to Shopify's Sidekick - What is it?
Shopify’s Sidekick is an AI-powered virtual assistant that sellers can install into their Shopify dashboards and use as their ‘right hand man’. Once integrated into Shopify, the Sidekick can help with a multitude of tasks including inventory management, customer insights, and trend predictions to marketing strategy optimization.
It utilises advanced machine learning algorithms to analyse vast quantities of data and then delivers real-time insights that can be directly harnessed by the merchants.
Shopify's Sidekick is both a tool and virtual assistant all rolled into one easy to use package. Whereas most other machine learning tools are only available “offsite”, Shopify’s Sidekick fully integrates into the Shopify dashboard for ease of use.
Upon announcing the Sidekick tools launch, Shopify CEO Tobi Lutke is reported to have commented that every entrepreneur needs a sidekick.
How Sidekick Aims to Revolutionise E-commerce
It is not an exaggeration to suggest that Shopify’s Sidekick could help to revolutionise E-commerce. Let’s take a closer look at what exactly Shopify’s Sidekick can do and it can help entrepreneurs;
Explaining Sales Trends;
Sidekick is able to deliver incredible insights into sales trends by analysing vast amounts of data from the store's history. By identifying patterns and offering insights, Shopify’s Sidekick can help guide merchants and empower them to make informed decisions. whether that’s spotting seasonal shifts or pinpointing unexpected spikes.
Answering FAQs using Shopify's Knowledge Base;
Many online sellers complain that a lot of their time is lost in answering basic and repeat customer enquiries. Well, by integrating with Shopify's extensive knowledge base Sidekick can instantly answer common questions. Whether it’s responding to shipping inquiries or clarifying return policies, the Sidekick is able to tap into Shopify's comprehensive resources to provide quick and accurate responses.
Assisting in Website Theme Editing;
Perhaps even more impressive, Sidekick can even offer hands-on assistance in website theme editing! With help from Sidekick, merchants can easily experiment with different aesthetics and layouts guided by the assistants' smart suggestions. Whether this is a seasonal makeover or a complete brand revamp, Sidekick can help to facilitate the process saving sellers money on external web designers.
The Financial Implications for Shopify
Despite being a dominant player in a buoyant market, Shopify's 2023 Q2 results actually posted a loss of $1.3 billion. Now while that may sound bleak, the broader picture tells a very different story as Shopify’s revenue has actually grown year on year, and its Q2 revenue of $1.69 billion was up 31% - bettering the analysts average estimate of $1.62 billion.
Furthermore, Shopify also announced in May 2023 that it was shedding 20% of its workforce as part of the sale of its fulfilment operation to Flexport. As well as reducing operating costs by outsourcing logistics and fulfilment, Shopify will also receive 13% equity in Flexport which will benefit Shopify's bottom line profitability.
At the time of writing (August 2023) Shopify’s market valuation is a very respectable $67.84 billion making it the number one Canadian tech stock bar none. This is also expected to rise in the next few years.
Comparing Sidekick to Other AI Tools
AI powered assistants have indeed become hot property in 2023. This is largely a trend that emerged following the launch of ChatGPT in November 2022.
However it must be emphasised that there are a number of fundamental differences between ChatGPT and Shopify's Sidekick. Firstly, ChatGPT is largely a word-processing tool whereas Shopify's Sidekick was designed specifically for e-commerce and as such boasts a raft of functions that ChatGPT lacks. For example, while ChatGPT users could certainly ask the tool to recommend “hot trending products” within a certain niche, it would offer up very general information whereas Shopify's Sidekick makes educated recommendations using deep-dive data analysis.
Crucially, ChatGPT’s learning cut off date was September 2021 so any information it holds in its memory vault is now 2 years out of date which is an eternity in the world of e-commerce. In any event, ChatGPT never had insider access to Shopify’s data anyway.
All of that said, OpenAI's ChatGPT can still prove very useful to online sellers and Shopify store owners. One function that ChatGPT performs very well is copy writing so it can be used to help write to product descriptions. ChatGPT can also serve as a very powerful language translation tool for sellers wishing to communicate with prospective buyers in foreign markets.
Despite the enormous potential of Shopify's Sidekick, some users may be reluctant to “trust” it on the grounds that sharing their shop data with an AI app may help their competitors - for example any insights that the Sidekick may glean from working with Shop A, will ultimately be fed back and capitalised on by Shop B. However, there are safety measures in place and data and conversations are not shared with third parties.
Is Sidekick Worth Using?
Shopify’s Sidekick does represent an additional operating cost that sellers need to take into account. Generally Shopify sellers run on tight margins and are already paying a monthly Shopify subscription. The question therefore arises as to whether Sidekick is worth the investment.
Our take is that Sidekick may prove to be a genuine game changer for the serious Shopify sellers out there. Its ability to offer real time market analysis can help sellers identify untapped markets, find new product lines and even come up with smarter product pricing. Therefore when used successfully, Sidekick can potentially enhance a seller's profitability and pay for itself multiple times over.
Additionally, Sidekick's ability to answer FAQs and help with theme design can further save online sellers valuable time as well as costs.
As for how Sidekick will impact Shopify's performance and future stock value, that ultimately depends on how many merchants feel that the tool is a valuable investment 6 - 12 months down the line. However, the extra revenue that Sidekick will drive along with the increased monthly sales it can help to drive, could well help return Shopify to profitability within the next year.
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