Storefronts by GoPuff A Win For Shopify, a Meh For GoPuff

GoPuff has announced that it has launched a storefronts program to help the brands in its fulfillment network launch their own DTC sites, fulfilled by GoPuff.

In a practical sense, if the brand is not already selling on GoPuff, it is not likely to attract a ton of new interest.

For large CPG brands, the benefits are simple even if the DTC volume overall won't make up a significant percentage of overall sales. Small does not always mean unimportant. Here are the benefits:

* Get more customer data

* Test unique / promotional merchandise,

* Do something special/bespoke for events -- even if the DTC volume overall won't make up a significant percentage.

* Low commitment level for the brand

For Shopify, this does a few things:

* Creates a new relationship with a CPG brand, likely at a large holding company like Unilever, PNG, etc. This relationship gives them

* As near as I can tell, this is one of the first examples of a reseller-type partnership for Shopify. Clearly something that design/dev agencies and even consultancies do all the time.

* Creates a new type of fulfillment partner, and sets a model for the "how" of logistics they should have been doing all along -- integrating with every type of logistics provider there is. Because logistics is unique, category-dependent and low-margin -- not universal, generic, and high-margin like software.

* Demonstrates an "instant store" use case for Enterprise which is a fit for their capabilities. And away from silly, costly Enterprise sales cycles which the Shopify organization will find more difficult to penetrate.

For GoPuff, unfortunately, it's interesting but not transformative:

* This is an incremental capability for new custom. Perhaps makes their app a little stickier for brands.

* After raising $3+ billion, GoPuff is still a niche player relative to Instacart, Doordash, and Uber. There isn't any room for another player in the market. Growth has likely stalled, and this is not going to reignite growth.

* GoPuff partnering with Shopify is STILL a better approach than Instacart acquring Unata and trying to run someone's grocery eCommerce site, however. GoPuff sticks to logistics, Shopify sticks to eCommerce.

* The new Shopify store - unlike a true bespoke store - would likely encourage their CPG brands to add in Instacart, Doordash or Uber integrations to this new store too, right? All this would be good for Shopify. Not so good for GoPuff.

All told, for Shopify reinforces the narrative that Shopify works super-well for quick little storefronts you need that are fit for purpose.

The fact that this is for "Enterprise brands" lets them make sideways claims about penetrating Enterprise.

For GoPuff, this is no savior. The most likely outcome for them is still acquisition or merger with Instacart, Doordash or Uber in the long-run.

All told, if there is a winner here, it's Shopify not GoPuff.