May 12th, 2025: Shopify Needs Incentive Alignment to Win in Enterprise, 3 Notables From BigCommerce earnings call, Instacart CEO Departs for OpenAI, and Shopify Reports Solid Earnings Amid Uncertainty
In this week’s Watson Weekly, we will discuss Fidji Simo is out at Instacart CEO to join OpenAI. This is a huge feather in Simo’s cap and leaves an opening at Instacart which I predict will be filled by their Chief Product Officer Daniel Danker. Not only did Danker and Simo overlap from their time at Facebook, but Danker was promoted by Simo into his current role as Chief Product Officer.
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It’s May 12, 2025 and this is the Watson Weekly - your essential eCommerce Digest!
Today on our show:
Shopify Needs Incentive Alignment to Win in Enterprise
3 Notables From BigCommerce earnings call
Instacart CEO Departs for OpenAI
Shopify Reports Solid Earnings Amid Global Uncertainty
- and finally, The Investor Minute which contains 5 items this week from the world of venture capital, acquisitions, and IPOs.
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To hear new episodes of the show every Monday morning, subscribe now at rmwcommerce.com/watsonweekly and wherever you get your podcasts.
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BUT FIRST in our shopping cart full of news….
Shopify Needs Incentive Alignment to Win in Enterprise
With the dominance of Google (GCP), Amazon (AWS), and Microsoft (Azure), most enterprises (by that I mean companies above $1B in enterprise value) are tied to one of these solutions indefinitely. If anything, a fourth player has just been minted with OpenAI -- further cementing Microsoft's growth trajectory ahead of AWS (it's only a matter of when not if AWS gets passed).
Sure, could Shopify swap places with Salesforce? Yeah it's possible. (salesforce is currently 2x Shopify market cap)
Could Shopify take out a number of custom Enterprise retail installs? Yes also possible, but in limited ways. Most enterprise architecture contains ERP, PLM, PIM, POS, OMS, CMS, Inventory, Supply Chain, Checkout, WMS, MDM, a CDP (off-the-shelf or custom). Did I mention a mobile app? And this is just for B2C. B2B adds much more complexity.
But what does Shopify replace? Likely the CMS and the Checkout at best currently. One day, POS. The rest of the stack primarily stays in place if you were considering a "replatform".
Which plays just fine for Shopify's current business model - % of GMV. Frankly, replacing the checkout might be enough for it given Shopify's economic engine primarily being powered by Merchant Services.
Yet as much as Shopify innovates, they have always seemed focused on one metric above all: conversion. The challenge? Not all software domains and enterprise goals flow from conversion.
Let's take the software which helps brands manufacture new products: product lifecycle management, or PLM. A critical part of any brand's journey -- handles everything upstream of minting that "real SKU" in your ERP.
Would Shopify ever tackle a domain like this? Not likely. But why? Couldn't it do so? Well, of course. It's not an innovation problem, though.
Instead, the problem is a different one. What is Shopify's INCENTIVE to innovate here?
After all, if you show me incentives, I will show you outcomes. And until Shopify innovates on its core business model drivers along a number of new dimensions not tied to GMV, it may not have the impact in Enterprise commerce it wants to have.
Unless Shopify is actually just using eCommerce to bootstrap itself as a global payments provider (which is what it currently seems to be doing with Shop Pay). Which to be clear, is a fine vision, it's just not an expansive Enterprise Commerce vision.
Unless, it decides to pick one of these lanes to innovate towards
* Data
* Advertising
* Payments (mostly today)
* Customer Engagement (a little here)
* Customer Service
* Supply Chain
Shopify has repeatedly shown not much interest in advertising. I predict Data will be the next lane that Shopify it tackles. After all, it needs it for its AI future anyway. And would incent partners + brands to bring more data to Shopify. Because that would be its new incentive.
>> closer
[References:]
Our Second Story
3 Notables From BigCommerce Earnings Call
Overall, the BigCommerce Q1 2025 earnings call was sleepy and I was not exactly surprised to see it exactly overlap with Shopify's earnings call. Who would have thought?
1 - Travis Cleaned House in Management Team
It would not be a shock to anyone who has read me for the last few years to say, a lot of this was overdue. Daniel Lentz you survived! Give yourself a cigar my friend.
The team while experienced is agency-heavy. Is that the right mix for the company? Remains to be seen. I had mentioned in the past, I would bet on a Product and Technology leadership change, and this has come to pass as well.
The product needs continued updating and fast. 2 features released last quarter?
2 - Pipeline Building. Yawn.
I mean, there is no more fake metric in SaaS than pipeline. I'll check in on this next year. All it means is this team is more aggressive in being IN deals, it doesn't mean they will close anymore. Although, you know, law of averages and all.
Better than a kick in the head to be in more deals, since ... consistently BigCommerce did not see a lot of deals. I imagine new sales and partner leadership alone corrected a lot of obvious layups missing customers who were "in-market" for a replatform.
Still, with Shopify being pushed down from the Board and C-Suite, it's tougher sledding for those not carrying a green bag (though not impossible).
The number you need to know: ARR increased 3% to $351M. Anemic comes to mind. "Enterprise" ARPA increased 9% to $45k. One day we will learn what Enterprise means.
B2B got a few mentions and successes, we just need to hear a lot more. Enough for the company to break out the progress. No specific metrics does make one worry.
3 - A few veiled shots at competition, did I spot them all?
if not direct quotes, these are all pretty close:
* "We are not going to have a P&L that looks like a fintech" -- CFO
> Definitely Shopify.
* "In B2C, we’re driving focus and discipline on our core target customers, including our strategic focus on businesses outside the traditional fashion, beauty and apparel verticals traditionally prioritized by legacy platforms."
> Probably Salesforce and Adobe? I would chuckle to hear them talk about Shopify as a legacy platform, doesn't seem like the intent.
One last point:
Is Feedonomics the planned trojan horse? It feels to me like the unstated plan is that Feedonomics is going out on its own (self-service), and this might be the tip of the spear for a lot of new activity to introduce the market to BigCommerce.
The channel management market has always been fierce (and fiercely difficult to make profitable), and it's often very hard for a "full-service" (i.e. hamsters who fix your feed in the background) to become a true self-service company. So there is a lot to prove here, too.
[References:]
Our Third Story
Instacart CEO Departs for OpenAI
The news dropped last week that instacart CEO and Chairman of the Board Fidji Simo is departing to another company she is on the Board of. No not Shopify, that other company - OpenAI.
Fidji Simo will lead Product, Business and Applications. Essentially, everything tied to a customer’s experience with OpenAI, but also how the AI is packaged and delivered to users. This is quite an expansive role.
A few points off the bat:
* Whenever I see a CEO leave for a lesser role with another company, you know they must view it as a career-making opportunity. While OpenAI has a lot of troubles and has already made a few big mistakes regarding things like corporate structure and has ongoing challenges with hallucinations and accuracy, they also have a chance to be a generational company if they play their cards right.
* I’ll go out and say this, Fidji Simo earned this move. Instacart has performed well under her leadership over the past few years. She has infused AI into Instacart, and improved the application, user experience, and service significantly — in addition to expanding selection.
* Fidji Simo may also help with the public face of OpenAI which could use an overhaul. Meaning, OpenAI has a Sam Altman problem. This could setup an eventual CEO transition if the company plays its cards right, which you think this wouldn’t overhaul their image? I don’t think this is likely to happen soon, but you never know. And the Board is smart in my mind to bring in another proven public figure.
As far as Instacart goes, she leaves it in a good place. One of the things that was notable about Simo’s departure announcement is that they signaled a current executive will take over as CEO. There are really two choices: the Chief Business Officer Chris Rogers, and the Chief Product Officer Daniel Danker. Of the two, I would bet on Daniel Danker. The executive is the most like Fidji Simo from my point of view, having spent time at Facebook, and Danker then moved on to head Product at Uber Eats.
Instacart to me seems like a very product-oriented company and so that would likely pass the torch with the least amount of disruption I am guessing. Being headquartered in San Francisco, there is also a bias towards Product and Technology oriented leaders as a rule — though sometimes there are exceptions. We will see how it shakes out.
[References:]
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And Our Last Story
Shopify Reports Solid Earnings Amid Global Uncertainty
Shopify channeled the Ghostbusters theme with a "we ain't afraid of no tariffs" in this earnings call. Growth double the average eCommerce, solid profitability, and bullish outlook.
A few points from Shopify's earnings that make sense to call out:
* 27% revenue growth y/y, marking 7 consecutive quarters with > 20% GMV growth. 20% MRR growth. (You don't want MRR growth going much below this)
Revenue growth accelerating. FCF margin up to 15% from 12%. (Investors wanted more). Gross profit dollars up 22% y/y. Op income up 136%.
* Offline GMV up 26%. Good merchant progress. Alo a highlight with recent same-day partnership. Although Alo only has 71 stores, it's a good reference.
* Enterprise:
Shop-Pay offplatform mentions
Vuori, Barkbox, Brilliant Earth (good marker for catalog and buying complexity, at least in D2C)... the wins are notable yet the names are not big enterprises. Toys R Us gets a mention, but it's more nostalgia than impact.
* Europe: EU GMV grew 36%. If there is any metric which points to the failure of other platforms this is the one I point to. A US/Canadian-based company should not be able to enter such a complex market where many countries have well-defended competitors. Instead, it looks to me that the competition is the one not prepared for Shopify.
* Q1 Shop Pay GMV up 57% y/y to $22B GMV, penetration highest ever
* Shop App growing from a smallish base: 94% y/y. Paypal and Amazon: you do not want to see this activity.
* Shop Pay off-platform a highlight. Tapestry, Lily Pulitzer, Birkenstock. Even if you have a custom platform, who wants to keep up with payments.
* Sidekick usage increasing (doubled MAU since start of year), rebuilt AI engine. Good to see a mention.
* Controlling expense / hiring on sales & marketing, R&D, and company overhead. Opex as a % of revenue down from
* Key point mentioned "we are a growth company". They seem to like where FCF is sitting at 15%.
* Tariffs. This was telling. Less than 1% of GMV exposed to deminimis ending.
Sounds like they expect this to stick. What was not mentioned was the large tariffs themselves and the impact of US merchants importing from China.
Reading between the lines, they do not seem to expect this to be permanent.
2Q Outlook:
* Revenue growth in the mid-twenties. Seems very achievable.
Missing in action?
* B2B did not get a strong mention, but we are still nascent here. I expect you will hear more over the next 12 months.
Competitive mentions. With Adobe and Salesforce accelerating their eCommerce platform investments, made a point to say that not only are Shopify's investments greater, other companies commitments/investments were "uneven". Which is smart doubt to put out there.
Overall, very bullish call. Analysts want more gross margin growth, but doesn't concern me too much. Despite my earlier post, Shopify seems pretty content with its lane as each lane has a lot of upside.
[References:]
It’s That Time Friends, for our Investor Minute. We have 5 items on the menu today.
First
Lowe’s to Acquire Artisan Design Group for $1.3B
Lowe's has announced that it will acquire Artisan Design Group for $1.325 billion and will use cash on hand to pay for the asset. Artisan Design Group specializes in flooring, cabinets, and countertops, requiring additional locations where these items can be viewed and ordered. It also has a national network of over 3,200 specialized installers and long-standing relationships with single-family and multifamily homebuilders. Lowe's, like Home Depot, is betting its future on the Pro who needs B2B services to complete the building or finishing of homes.
Link: https://www.retaildive.com/news/lowes-acquisition-artisan-design-group-pro/745370/
Second
Global Payments to Acquire Worldpay for $24B, Divest Issuer Solutions Unit
Global Payments has announced its acquisition of Worldpay from FIS and private equity firm GTCR for $24.25 billion. As part of the transaction, Global Payments will sell its issuer solutions unit, which offers card processing and account services, to FIS for $13.5 billion. This deal simplifies Global Payments' business model and positions it as a commerce solutions provider for merchants of all sizes. The payment sector is very competitive, and this ensures that Global Payments can offer end-to-end solutions to a combination of both enterprise and clients from Worldpay and continue to service small and mid-sized companies.
Third
ABB to Spin Off World's Second Biggest Robotics Business
During its Q1 earnings call, Swiss automation and industrial group ABB announced that it plans to completely spin-off its ABB Robotics business into a separately publicly listed entity by the second quarter of 2026, with shares in the new company distributed to ABB investors as dividends. This will be the biggest shakeup at ABB since it sold its power grid business to Hitachi in 2018. ABB Robotics does not have synergies with other ABB businesses, but its upside due to labor shortages could be impacted by the current tariffs, as most ABB Robotics customers are in the automotive sector.
Fourth
Building Products Distributor QXO Acquires Beacon Roofing Supply for $11B
Building products distributor QXO has announced that it has acquired the remaining shares of Beacon Roofing Supply at $124.35 per share, valuing the company at $7.7 billion or $11 billion, including debts. At the closure of this transaction, QXO will become the largest publicly traded distributor of roofing, waterproofing, and complementary building products. This deal has been a saga that has taken months, but it provides GXO with Beacon's expansive network of branches across the US and Canada, as Beacon Roofing becomes a wholly owned subsidiary of GXO. Is this the beginning of an arms race in the B2B building supply sector?
AND FINALLY …
Data Integration Platform Fivetran Buys Census
Data integration platform Fivetran has announced it has acquired Census, a reverse extract, transform, and load (ETL) platform for an undisclosed amount. The strategic importance of this transaction should not get lost - this enables data to move into databases and then out of databases into sales and marketing tools. Fivetran, through this transaction, wants to own the entire journey from source to action. Once the transaction closes, the Census team will join the Fivetran team, and the Census brand will be folded into Fivetran.
Link: https://reactordata.com/fivetran-buys-census-what-it-means-and-why-it-matters/
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Did you know that RMW Commerce has another podcast? Check out The Watson Weekend for an unfiltered and lively eCommerce chat each week with me, Rick Watson, my co-host Jess Lesesky, and an array of interesting guests and topics. All focused on eCommerce. You can find the Watson Weekend by searching for it on iTunes, Spotify, or Youtube.
That’s all for this week! Till next time Watsonians.....
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Hi, I’m Rick Watson, CEO and Founder of RMW Commerce Consulting and host of the Watson Weekly podcast - your essential eCommerce Digest.
Our production partner for the series is Podcast on the Fly. This podcast is produced by RMW Commerce.
To hear new episodes of the show every Monday morning, subscribe now at rmwcommerce.com/watsonweekly and wherever you get your podcasts.
