Shopify dives deeper into AI with new products, including chatbot for merchants

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This article was published 26/07/2023 (1140 days ago), so information in it may no longer be current.

As Shopify President Harley Finkelstein works, he often keeps a ChatGPT window up on his computer.

He’s dabbled with artificial intelligence tools to write product descriptions for hisFirebelly Tea companyand when someone sends him a long new article, he asks the technology to summarize it so he can decide if it’s worth a read later.

“We are kind of sitting on this edge of so much possibility, where commerce can actually be further propelled…with this new technology,” Finkelstein said in an interview.

His tinkering is a sign of how his Ottawa-based e-commerce software company is leaning further into AI. It was bolstered Wednesday, when Shopify’s semi-annual product showcase presented AI as a cornerstone of the business’s latest offerings.

Some of the 100 announcements made at Shopify Editions were contained within Shopify Magic, a suite of AI tools that can write product descriptions, email subject lines and headings for online stores.

Shopify’s AI tool kit is now expanding to include Sidekick, a chatbot the company’s merchant customers can use to ask questions about business operations.

Demos show Sidekick helping merchants delve into why their sales have slowed and aiding business owners in setting up summer sales and making changes to the design and orientation of their online stores.

Shopify founder and chief executive Tobi Lütke teased Sidekick earlier this month with a video, where he positioned it as helpful for people without someone they can call or text with entrepreneurial or Shopify software questions.

“Imagine how much more entrepreneurship there would be in the world if everyone would have someone by their side who is deeply competent, totally committed to you, available around the clock, with no judgment, with no fear, knowing everything there is about Shopify and entrepreneurship writ large,” Lütke said.

“Technology has advanced so much in the last year that this is now possible.”

When Lütke teased it, Rick Watson, founder of RMW Commerce Consulting, saw Sidekick as a “big shiny object,” but he warned it’s not a Holy Grail.

“AI is not going to make a bad business a good business. If it’s losing money, you haven’t built the right product or you haven’t found a market that wants your product, AI cannot help you in this situation,” he said.

“But AI could make a good business a better business because it could maybe help find opportunities for you to improve your website or to improve your presentation to the consumer or maybe cut down the time it takes you to perform different actions.”

Finkelstein agrees. He sees Sidekick as a way to free up merchants’ time, allowing them to focus on their broader vision and product development rather than menial or time-consuming tasks.

But he knows the technology has limitations too.

The AI he used on Firebelly descriptions produced text that seemed “a little bit corporate,” so he kept about 90 per cent of what it generated but swapped out some superlatives and other details.

“On the product description side, Harley plus Sidekick is better than Harley alone and I believe Harley plus Sidekick is better than Sidekick alone,” he said.

At many companies AI is helping with transcription, parsing data and forecasting, but some are taking the technology even further, deploying it to help with medical diagnoses, road traffic management and writing.

A recent surge in adoption has alarmed more than 1,000 technology experts, including Amazon, Google, Meta and Microsoft engineers. They called for a six-month pause on training of AI systems more powerful than GPT-4, the large language model behind humanlike chatbot ChatGPT, in March.

Geoffrey Hinton, the “godfather of AI” and the winner of the A.M. Turing Award, has also warned the technology could cause bias and discrimination, joblessness, echo chambers, fake news, robots in warfare and existential risk.

Finkelstein has heard the warnings and agrees “AI has to be used responsibly.”

Shopify ensures it does not “cross pollinate” one merchant’s data with another. Its AI is also not allowed to write or make changes to any Shopify production systems and merchants are always given the opportunity to review any AI-generated content or decision.

“The last thing we’d ever want to do is actually have a merchant wake up and say, ‘Everything is different. I didn’t want this,'” said Finkelstein.

Shopify’s dive into AI comes months after it reduced its head count by about 20 per cent and sold its logistics business to reduce distracting “side quests.” It made a 10 per cent cut the summer before, attributing the layoff to it misjudging the stickiness of pandemic trends.

In an open letter announcing the latest cut, Lütke said, “Now we are at the dawn of the AI era and the new capabilities that are unlocked by that are unprecedented.”

But the company is still intent on innovating on other fronts. At Editions, it announced it is making its checkout experience more customizable and rolling out a new cashback, pay-in-full business credit card for U.S. merchants.

It launched a service called Shopify Collective, which lets merchants source products from brands on Shopify that will ship directly to their customers. Collective was recently used by Canadian rapper Drake on his DrakeRelated store.

The announcements marked the third round of Editions, a concept it invented when the COVID-19 pandemic forced it to cancel its annual, in-person Unite developers conference.

“Are we going to bring back a large, in-person event?” Finkelstein said. “Well, it’s something we’re thinking about.”

This report by The Canadian Press was first published July 26, 2023.

Companies in this story: (TSX:SHOP)