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OpenStore launched its first software product, an AI-powered customer support tool it calls OpenDesk, earlier this week.

Why it matters: Following in the footsteps of Amazon, retailers have found new revenue sources by diversifying beyond selling things.

Catch up quick: The Shopify aggregator raised a $32 million round in 2022 that valued it at $970 million.

What's next: OpenStore plans to see how OpenDesk performs over the next three to six months, and that will determine whether the company needs to hire a sales team or raise more capital, CEO Keith Rabois says.

There may be a strong case to raise more capital, he adds.

How it works: OpenStore developed the tool for internal use because it was costing between $5 and $6 to service each customer order, Rabois says.

At one point, the Shopify aggregator employed 48 customer service reps. With OpenDesk, it was able to reduce that to eight, he says.

It reduced the cost per customer order to below $1, Rabois says.

Zoom in: Because of those results, OpenStore decided to turn the internal tool into a product it could sell to other Shopify brands, the CEO says.

It is currently onboarding brands, including apparel, consumer electronics and supplements, Rabois says.

Friction point: The product launch caused tension between the company's legacy team and its new B2B software team.

To resolve the tension, any new tech OpenStore develops that could be a software product also has to solve a problem for the legacy Shopify aggregator side.

In that way, resources aren't technically being diverted to an entirely new business, Rabois says.

What we're watching: The aggregator continues to be acquisitive of other Shopify brands in categories such as health, apparel and consumer electronics, Rabois says.

But it will slow its acquisition pace to invest in higher upside per brand, he says, noting it grew apparel brand Jack Archer from $1 million to $10 million in nine months.

Shopify aggregator OpenStore unveils AI-powered customer support tool

It is the Shopify aggregator's first software product.

Illustration of a robot with a headset, its face is a screen which reads, "How may I help you?" 

Artificial intelligence

OpenStore launched <a class="gtmContentClick" data-vars-link-text="its first software product" data-vars-click-url="https://www.axios.com/2021/07/15/openstore-millions-funding" data-vars-content-id="6425927c-6ba4-4343-872d-42995978bf7b" data-vars-headline="Shopify aggregator OpenStore unveils AI-powered customer support tool" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2021/07/15/openstore-millions-funding" target="_self">its first software product</a>, an AI-powered customer support tool it calls OpenDesk, earlier this week.Why it matters: Following in the <a class="gtmContentClick" data-vars-link-text="footsteps of Amazon" data-vars-click-url="https://www.bloomberg.com/news/articles/2024-03-14/walmart-wants-to-sell-its-ai-software-to-other-retailers" data-vars-content-id="6425927c-6ba4-4343-872d-42995978bf7b" data-vars-headline="Shopify aggregator OpenStore unveils AI-powered customer support tool" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.bloomberg.com/news/articles/2024-03-14/walmart-wants-to-sell-its-ai-software-to-other-retailers" target="_blank">footsteps of Amazon</a>, retailers have found new revenue sources by diversifying beyond selling things.

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Shopify aggregator OpenStore unveils AI-powered customer support tool

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