WEBVTT - Shopify President Harley Finkelstein Talks Consumer Spending

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Despite some of that economic uncertainty, Spencer was talking about

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<v Speaker 2>disappointment over the size of discounts. US shoppers did open

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<v Speaker 2>their wallets on Black Friday, So what does that mean

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<v Speaker 2>for the month ahead. Harley Fingalstein, president of global commerce

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<v Speaker 2>company Shopify, is here with some good data, some good insights.

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<v Speaker 2>I mean where we ended it. There was Spencer, Harley,

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<v Speaker 2>the forecasters, the predictors say that this will be another

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<v Speaker 2>record shopping season in aggregate the data available to you.

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<v Speaker 2>What are you seeing? What are the trends?

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<v Speaker 3>Yeah, you know, I heard what Spencer said there. I mean, look,

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<v Speaker 3>Friday was another record breaking Black Friday weekend. We saw

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<v Speaker 3>about six point two billion dollars in sales for Black Friday.

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<v Speaker 3>That's about twenty five percent from last year. We saw

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<v Speaker 3>peak sales of five point one million dollars per minuted

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<v Speaker 3>on Friday that happened around noon on Friday. That's up

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<v Speaker 3>from four point six million last year as well. And

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<v Speaker 3>if you pull up actually anyone can see this BFCM

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<v Speaker 3>dot shop, you can actually see global commerce happening right

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<v Speaker 3>now in real time. We are currently seeing about two

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<v Speaker 3>point five million dollars per sales in sales per minute,

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<v Speaker 3>about twenty five thousand orders per minute, and we've seen

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<v Speaker 3>just shy of seventy million unique shoppers buy from Shopify stores.

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<v Speaker 3>So it's certainly shipping up to be another great day.

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<v Speaker 3>And happy to go into some of the merchants and

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<v Speaker 3>some of the trends that we're seeing cross Shopify.

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<v Speaker 2>Harley, what I'd like to do is actually take a

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<v Speaker 2>sort of geographic breakdown because in the limited data that

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<v Speaker 2>we went through a spencer, I think we're recognizing different

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<v Speaker 2>speeds of great sharpicula.

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<v Speaker 1>US versus Europe. Could we start there? Yeah? Sure.

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<v Speaker 3>I mean, look, if you look at top selling countries

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<v Speaker 3>across the world where Shopify sells, we have millions of

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<v Speaker 3>stores in places like the US, we power twelve percent

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<v Speaker 3>of all e commerce, so we have a really great

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<v Speaker 3>view of things. US, UK, Australia, Germany and Canada are

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<v Speaker 3>the top five. Look a top three selling cities you

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<v Speaker 3>see La New York and London in US alone, La

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<v Speaker 3>New York and San Francisco were the top three. The

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<v Speaker 3>other thing that we also saw is cross border, but

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<v Speaker 3>seventeen percent of orders were cross border orders, so shipped

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<v Speaker 3>to a different country as well. And then in terms

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<v Speaker 3>of top trending merchants that we saw, we saw Hatch

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<v Speaker 3>which is sort of this it's been called the Restore three,

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<v Speaker 3>which is this phone free alarm for kind of morning routines.

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<v Speaker 3>Crunch Labs has the sort of kids build it yourself

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<v Speaker 3>monthly toy subscription, brook linnen on their super Plush robe,

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<v Speaker 3>and then Bass has their weekend or travel bag as well.

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<v Speaker 3>So we're seeing across a bunch of different verticals do

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<v Speaker 3>really well.

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<v Speaker 1>But a big thing.

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<v Speaker 3>Actually that we're seeing now is last year seemed to

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<v Speaker 3>be a lot to talk about getting outside gifts, were

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<v Speaker 3>about the products being sold, were about you know, things

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<v Speaker 3>like skiing or hiking.

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<v Speaker 1>We're camping. This year seems to be that home is

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<v Speaker 1>really you.

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<v Speaker 3>Know, the winner here where people are buying things for

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<v Speaker 3>their home, whether it's kitchens except for the kitchen, or

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<v Speaker 3>puzzles or blankets, but generally consumers are buying from brands

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<v Speaker 3>they love, and we're fortunate those brands are on Shopify.

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<v Speaker 1>What does that cross border stat that's seventeen percent signal

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<v Speaker 1>to you? Is that growing? I mean, how does that

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<v Speaker 1>stand up to last year when perhaps Taris went such

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<v Speaker 1>a headwind.

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<v Speaker 3>Yeah, I mean it's what I think it means is

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<v Speaker 3>that consumers generally are somewhat geographically agnostic. They want to

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<v Speaker 3>buy from their favorite brands. You know, we heard from

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<v Speaker 3>Jim Shark they had their biggest Black Friday sale ever

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<v Speaker 3>online ag one Athletic Greens was a fifty percent brunt

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<v Speaker 3>Workware got an order every five seconds. So if you

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<v Speaker 3>think about where consumers are purchasing, they're buying from brands

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<v Speaker 3>they love the Voris, the figs, the Alo Yogas, the

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<v Speaker 3>on Runnings of the World, and I think they're agnostic

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<v Speaker 3>to where those are coming from.

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<v Speaker 1>The other thing that we're.

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<v Speaker 3>Seeing, which is really interesting, is that this really wasn't

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<v Speaker 3>just about discount this year.

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<v Speaker 1>People shop brands, not channels.

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<v Speaker 3>We're almost worrying living in sort of a post world

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<v Speaker 3>channel where you know, the consumers bounce from a TikTok

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<v Speaker 3>video to an AI agent, to a website to a store.

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<v Speaker 3>Even in video games like Roadblocks where Shoppi by powers commerce.

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<v Speaker 3>The brands that really won the weekend made the experience

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<v Speaker 3>feel the same everywhere they were, and that continues today.

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<v Speaker 2>Let's talk holly about the inevitable AI question.

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<v Speaker 1>Because you are like the global commerce company. You're helping

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<v Speaker 1>people be digitally native. How are they interacting therefore, in

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<v Speaker 1>this world of brands with various AI agents, whether their

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<v Speaker 1>own or whether they're external third party.

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<v Speaker 3>Yeah, I mean, look, it's still very very early, but

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<v Speaker 3>since January we've actually seen AI driven traffic on to

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<v Speaker 3>Shopify stores up about six x.

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<v Speaker 1>But we've been preparing for this for years.

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<v Speaker 3>We've been laying the rails for AGENTI where alread we've

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<v Speaker 3>already anounced deals with Perplexity and more recently with chat GBT,

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<v Speaker 3>where brands on Shopify can sell directly in those conversations,

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<v Speaker 3>no links, no redirects, just sort of this very seamless

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<v Speaker 3>experience directly in the chat. And so I think we're

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<v Speaker 3>going to see a lot more of that. Now what

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<v Speaker 3>permutation eventually wins, we're not sure yet, but we'll be

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<v Speaker 3>ready for it. But the other side of it is

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<v Speaker 3>really interesting, which is that brands, the merchants themselves, are

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<v Speaker 3>using AI to support them on the biggest shopping season

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<v Speaker 3>we can of the year. So we have something called Sidekick,

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<v Speaker 3>which is the AI assistant built into Shopify, which knows

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<v Speaker 3>everything about merchant stores, knows everything about Shopify, and we've

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<v Speaker 3>seen over one hundred million conversations with Sidekick. So merchants

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<v Speaker 3>are able to do things like you know, design copyright

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<v Speaker 3>market create these incredible analytics dashboards where they can decide

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<v Speaker 3>where to spend in a much more sophisticated way. And

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<v Speaker 3>so it's giving smaller merchants a real leg up against

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<v Speaker 3>the bigger guys because this AI empowers them.

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<v Speaker 2>I want to go back to tariffs, Holly, but with

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<v Speaker 2>a slightly different way of asking the question. You can

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<v Speaker 2>look at overall spend, but the question we're asking ourselves

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<v Speaker 2>in the bloom Bag newsroom is our consumer is still

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<v Speaker 2>spending and getting less in return. So what are the

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<v Speaker 2>data sets that you're tracking the evidence that impact of

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<v Speaker 2>tariffs either through a diminished spend or same level of spend,

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<v Speaker 2>but you just get less for it.

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<v Speaker 3>We actually measure, you know, both consumer confidence but also

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<v Speaker 3>consumer's appetite to spend at checkout and so far, I

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<v Speaker 3>mean as we speak right now, ed two point five

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<v Speaker 3>million dollars are going through check with every single minute.

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<v Speaker 3>So we've operated through all types of macro environments and

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<v Speaker 3>our focus is always the same, which is for merchants

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<v Speaker 3>and I think what we're seeing though, is that, you know,

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<v Speaker 3>whether during the pandemic, for example, we introduce tools like

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<v Speaker 3>you know, contact list delivery back in twenty twenty. Well,

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<v Speaker 3>now we're creating tools to help merchants navigate cross border

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<v Speaker 3>tariffs and navigate sort of some global uncertainty to make

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<v Speaker 3>sure they have everything they need.

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<v Speaker 1>So we're not complacent about this.

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<v Speaker 3>We're tracking macro conditions, but so far Shopify merchants consistently

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<v Speaker 3>outperform the overall market, and we're seeing that that they're

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<v Speaker 3>they're you know, they have a lot of buyers.

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<v Speaker 2>Right now, and I think we'll see great to have

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<v Speaker 2>some time with the president of Shopify. What a weekend

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<v Speaker 2>it's been for you, I'm sure