Shopify has invested $100 million in e-commerce marketing automation player Klaviyo, extending a partnership that makes Klaviyo the preferred product for premium merchant customer management and messaging.
Why is this important: Amid slowing post-pandemic growth, Shopify has made targeted investments in back-end functions.
- The company paid $2.1 billion in May to buy shipping logistics company Deliverr and invested in music and video app Single to provide NFT-based functionality to its merchants.
- For Boston-based Klaviyo, the partnership is a way to help Shopify merchants deepen their relationships with their customers, Klaviyo CEO Andrew Bialecki told Axios.
How it works: Klaviyo helps merchants automate its emails and SMS to customers, aiming to be a repository of customer data, says Bialecki.
- So when customers “visit your website, they buy something, they interact with customer support, they write product reviews — it all comes to us,” he says, adding that the data helps inform marketing campaigns. by email.
- Klaviyo has signed with top companies like Unilever, Dermalogica, Solo Stove and Citizen Watches.
State of play: For eight years, Klaviyo has worked with Shopify to link its customer data software with its payment and logistics technologies.
- The partnership “really aligns our businesses together where we’re going to be doing even more product co-development,” says Bialecki.
- Klaviyo will receive early access to Shopify’s new developer features.
- Profits will help Klaviyo hire more engineers and advance product development, he adds.
Rollback: In May, the company closed a $320 million Series D funding round led by Sands Capital. The round valued Klaviyo at around $9.5 billion.
And after: Coming soon: a feature that will allow Shopify merchants to purchase products directly from an SMS, Klaviyo says
- Ultimately, Klaviyo could enter more consumer-focused markets, such as restaurants, hospitality, and entertainment.
- “Each of these companies will need a set of client technologies behind the scenes,” he says.
Yes and: The broader digital advertising market is experiencing a downturn, but Bialecki says he thinks his business is insulated from it because its success isn’t tied to consumer spending and metrics like gross merchandise value.
- “For us, the key kind of metric is actually the number of relationships a company has that are digital,” he says. “And that number keeps growing.”
The bottom line: Personalization is key as retail moves away from what Bialecki calls a “one-size-fits-all, context-free experience.”
- “Every retailer will need an e-commerce platform and a customer platform.”