But what are the potential implications of this breakup of sorts? And who stands to gain and lose?
FOLLOW THE MONEY
This breakup apparently has been in the making for some time. Several months ago, the same thing happened – a semi-public tiff – like the one most of us have experienced or witnessed in relationships, but at the time the long time partners kissed and made up. And then each went away to scheme alternative plans.
Now it looks like things are done for good – pictures have been taken, the publicists have been hired to smooth things over and distract us from the truth. And customers have been left in the lurch not knowing who is to blame.
While the public statements issued by both companies are focused on data usage and privacy – perhaps against the backdrop of the ongoing issues that Big Tech is experiencing right now – this is more likely about market position, strategy, and product roadmap. Data and Privacy are like the proverbial unpicked up socks and raised toilet seats.
Or to put it more simply, it’s about the money.
HOW DID THINGS GET THIS WAY?
If one were to study and summarize the company histories and positions - you would find some common threads.
Mailchimp staked out a comfortable niche, providing an easy, user friendly way to build mailing lists and create professional and elegant email campaigns – an all-comer solution with free and paid plans. When I started dabbling years ago to help my wife with her business, I hadn’t the foggiest idea how to generate an “html newsletter” – I thought I need to learn to code html to build it or use something like DreamWeaver. MailChimp was the perfect tool for this.
By the same token, Shopify, with its easy to use store admin and themes, represented freedom from costly website developers and Magento at a sensitive stage of our business startup. We grew sick of paying monthly fees just to be able to have someone change a store banner for us. Not to mention the setup costs.
In fact, they both and in combination put entrepreneurs and small business owners like us squarely in control of our own businesses, without unnecessary intermediaries or entry costs and barriers. The companies benefitted from a synergistic partnership for the ecommerce segment, through seamless integration and connectivity.
But, this relationship was never meant for exclusivity, and the inevitable was bound to happen – converging product roadmaps.
In my mind, this is where the similarities end, and where I draw some lines of distinction between companies and positions. To me, there are a few key factors that will predict the outcome.
KEY SUCCESS FACTORS
Platform vs Solution
Shopify is an ecommerce and content management platform, and is orbited by a vibrant ecosystem of core and ancillary applications and services. Shopify provides mission critical ecommerce for its customers and is the basis of their business operations, or in the case of omnichannel, a significant portion of their sales channels. For most partners, Shopify is the source and object of their livelihoods or side-hustles.
MailChimp is a solution that performs specific functions, such as the aforementioned list building, campaign development, and others like landing pages and a limited amount of segmentation and analysis. MailChimp plays a more focused role in communication with customers and prospects via the important channel of email.
While MailChimp has benefitted greatly from Shopify’s fantastic growth and maturation, it also works with other platforms and in other segments. In fact, if MailChimp has a single merit, it is the ability to integrate with just about anybody natively or through an ecosystem of integrated apps. So for MailChimp, there is life per se without native integration with Shopify.
Functionality and Adjacency
Shopify has been very successful at enriching its product functionality and directly pursuing adjacent functionality in order to expand and monetize its customer base. Shopify Payments is a great example of this as a growing and lucrative portion of its business, and it has also made key acquisitions along the way, such as Kit Marketing. And the App Store has rolled out some very successful partners like Shogun, OrderlyEmails and Out of the Sandbox, and services like Ethercycle.
MailChimp on the other hand, has kept market innovation within reach, satisficing its customers with Landing Pages and Automation. It has pursued volume versus margin, and has seen more sophisticated competitors such as Klaviyo (analytics, segmentation) and Active Campaign (CRM) make inroads in the value added part of the market and capture more profitable and growth oriented customers.
Partner Program and Network
Shopify has a lucrative partner program, where entrepreneurs can develop solutions for unmet or unsatisfactory functionality and be rewarded for it. New apps pop up to compensate for missing or sucky functionality. (i.e. Weglot, Fontify)
This stimulates growth via an army of developer and affiliate evangelists and warriors, and enables Shopify to focus R&D on core platform expansion.
MailChimp has a network of partners as well. Though I appreciate the blanket and candle they sent me a few months ago, there are a few key factors missing here. No revenue sharing, no affiliate program, no support. There is little to reward agencies for referrals and implementations, and customers are left to fend for themselves. Granted, this is not rocket science – but customers are easily wooed away when they seriously start pursuing growth. And MailChimp is left with its free users who can get by with 2000 users or less.
Support and Execution
Shopify’s support system is not perfect, but it generally keeps up with demand and is capable of responding to customer or prospect inquiries and challenges. It brilliantly leverages a network of Guru’s, Experts and Partners who are incentivized to directly or indirectly resolve customer problems.
For MailChimp, support issues abound and are left sit for months without response. Most people complain once and never return.
Equally troublesome is that MailChimp has settled for offering a good, not great solution (queue the AT&T ads). It hasn’t significantly improved or eased the use of its solution. Just try customizing (beyond font and background color) an embedded signup form without having to learn CSS or use an external app. Also, list segmentation is not the same thing as CRM.
For Shopify, finding a way to monetize its customers for the email marketing budget is a huge carrot. I cannot imagine that Shopify doesn’t have a play in the works on this front, building off its marketing dashboard. As a user, I hope it is a sensible compromise between MailChimp’s pricing and Klaviyo’s functionality.
For MailChimp, they lost a great growth driver but will continue to work with other platforms and aggregate services for a formidable installed base. Will they be able to move upstream? It remains to be seen if they can assemble a network of partners and complementary apps and find a way to support customers.
The sure winners here are the complementary apps and service providers such as Privy and others that will fill the gap and ensure that Shopify and MailChimp fulfill joint custody.
Atlantify is an Atlanta based agency focused on building online stores, blogs, and corporate websites.