Stratechery Platforms in an Aggregator World
May 26, 2020
Explore the shifting dynamics between Shopify and Facebook in e-commerce. Discover how these giants are navigating competition and the importance of collaboration for merchants. The conversation highlights the need for platforms to support each other in customer acquisition rather than compete, revealing insights into the future of online retail.
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Platforms vs. Aggregators
- Brick-and-mortar retail serves two functions: discovery and distribution.
- Online, these functions are split between platforms like Shopify (distribution) and aggregators like Facebook (discovery).
DTC Vulnerability
- Direct-to-consumer (DTC) brands rely on Facebook and Google for marketing, giving them significant power.
- This reliance makes DTC brands vulnerable to aggregator's integration, like Facebook Shops.
In-App Browsers and Payments
- Apple's policies around in-app browsers and Apple Pay worsen the purchase experience on platforms like Instagram.
- Facebook builds its own browser within Instagram, enabling more data capture but limiting Apple Pay.