Shopify and Magento (now rebranded as Adobe Commerce) are two of the biggest names in the eCommerce development industry. For a long time, Magento was the dominant player, especially among larger online retailers. However, over the last few years, Shopify has experienced massive growth and is now the clear leader among small and midsize eCommerce businesses. At the same time, Magento has faded from the limelight as Shopify’s star rises.
Let’s understand the cause of this significant shift.
Market share of leading eCommerce software platforms and technologies worldwide as of July 2023
Where does Shopify stand right now?
Shopify remains a leader in the industry, according to Gartner’s latest Magic Quadrant report. The company primarily serves small and midsize retailers in North America but is expanding its focus to more complex global enterprise brands.
What’s behind this major shift in market share?
Shopify offers integrated solutions for payments, POS, social, marketplace, and financing. This consolidated offering provides merchants with all the tools they need to sell online and across different channels.
In 2022, Shopify acquired Remix, an open-source web framework startup. This allowed Shopify to improve its development capabilities for headless commerce.
Other recent additions to this platform include:
- new B2B functionality
- ERP integrations
- enhancements for social commerce
- custom audience marketing
The company is also keeping itself updated; they invested $1.38 billion in innovation in 2022. They also released 100 minor product upgrades and some major enhancements
These improvements have helped Shopify expand their reach to meet the needs of wholesale, D2C, and B2B sellers. However, Shopify still lacks some core functionality needed for complex B2B companies. While the company must recognize the need to enhance B2B capabilities to win more enterprise deals moving forward, Shopify’s track record of rapid innovation suggests they can address these gaps.
Key aspects that have fueled the rise of Shopify over Magento
There are several key advantages that have pushed eCommerce businesses to choose Shopify website development over Magento.
● Easier for small businesses to use out-of-the-box
One of Shopify’s biggest selling points is its intuitive store setup and management interface. Shopify sites can be built and customized using drag-and-drop tools, making it easy for those without technical skills to launch an online store. The admin dashboard is user-friendly, allowing store owners to manage products, orders, shipping, and more with just a few clicks.
In contrast, Magento is difficult to set up and manage due to its technical complexity and therefore, requires more technical expertise. The platform is coded and functionality requires adjustments via XML and HTML. It was built first and foremost as an enterprise platform. So, non-technical users often find themselves lost attempting to navigate the backend and make changes without a developer’s help. This presents a steeper learning curve for small business owners without a developer on staff.
● Lower total cost of ownership
Shopify is more affordable, with transparent pricing plans scaling from $39 to $399 per month. There are no hidden fees and everything required to start selling online is included. Magento, on the other hand, involves higher upfront and ongoing costs associated with owning and managing a Magento site. Additionally, there is no cost package; one has to apply for a custom package and go through that process to determine the cost of building an eCommerce solution through Magento.
● Faster speed and better performance
Page speed is a vital factor in eCommerce. Shopify sites are optimized for performance right out of the box. Shopify handles site hosting and infrastructure, so business owners don’t have to worry about speed optimization.
Magento sites often suffer from slow page speeds due to the platform’s complexity. Unoptimized sites can have page load times of 5+ seconds, which is unacceptable in eCommerce. Slow speeds can negatively impact conversions and SEO. However, optimizing site speed requires significant performance tuning and hence, technical expertise, further adding to development costs.
● More apps and integrations
Shopify offers an extensive app store with thousands of apps to extend site functionality. Integrating with accounting, email marketing, POS and other business software is easy.
Magento also has many apps and integrations, but Shopify is the leader when it comes to the ecosystem of partners and customizability.
● Powerful built-in marketing features
Shopify includes a range of built-in marketing features to help merchants sell more. These include:
➢ SEO optimization
Shopify sites are optimized for search with capabilities like custom meta tags, XML sitemaps, and SEO-friendly URLs.
➢ Email marketing
Sending newsletters and cart abandonment emails is easy with Shopify Email. It’s integrated directly into the platform.
➢ Social selling
Shopify allows merchants to easily sell through social channels like Facebook and Instagram Shopping.
Magento offers some marketing features, but Shopify’s broader suite gives merchants more capabilities without any extra costs.
● Constant uptime and reliability
Shopify’s infrastructure keeps sites live and fast at nearly 100% uptime, even during the high traffic volumes of peak shopping seasons like Black Friday and Cyber Monday.
The platform’s reliability gives Shopify merchants peace of mind that their stores will be operational when it matters most. Magento sites are more susceptible to downtime without costly hosting and CDN setups.
Prominent reasons why Magento is no longer a leading eCommerce software platform
While Adobe Commerce/Magento offers robust eCommerce capabilities, it has some limitations that merchants should be aware of.
● It is missing some key B2B functionality
This includes visual workflow tools, the ability for order approvers to combine orders for volume discounts, usage-based billing, and support for complex B2B2X models. Adobe is working to enhance its B2B features but currently relies on third-party partners to provide more sophisticated subscription and billing capabilities.
● Another potential issue is hidden costs with managed cloud services
Although Adobe refers to its offering as a cloud solution, it differs from true SaaS models. Ongoing expenses like hosting, maintenance, upgrades, and support are not included in the base software license. Customers must budget for these additional services when comparing Adobe’s pricing to pure SaaS competitors.
● Upgrading Adobe Commerce can be challenging despite recent improvements
Customers continue to report below-average experiences when updating their platforms. Adobe released an upgrade compatibility tool in 2022 to ease this process but merchants must still carefully follow best practices to minimize disruptions. So, prospective customers should thoroughly evaluate Adobe’s upgrade support and plan for any potential complications.
The future outlook for Shopify and Magento
The eCommerce landscape is constantly evolving. However, Shopify has proven to be nimble and customer-focused, positioning it as the frontrunner as more commerce moves online. While Magento laid the early foundation, Shopify has outpaced it as the top eCommerce platform for today’s digital-first retail economy. The online selling field will likely remain competitive, but for now, Shopify reigns supreme.