Rainbow Shops is an independent retailer with a team of just three full-time engineers—and yet they manage to stay competitive with the Goliaths of commerce, including Amazon, Walmart, and Shein.
But it wasn’t always this way.
After about a decade on Demandware (now Salesforce Commerce Cloud after a 2016 acquisition), David Cost, Rainbow’s VP of digital and ecommerce, knew they had to make a change, or risk getting left behind.
Since making the switch to Shopify, Rainbow has:
- Experienced an 80% reduction in platform fees.
- Launched native apps that were previously cost prohibitive and lacking in functionality. They’ve since seen those apps account for 20% of their customer interactions.
- Seen site search volume increase by 48% after implementing Shopify’s integration with Google Cloud’s Discovery AI solutions.
- Shipped numerous new features in minutes vs. months.
Rainbow Shops: Affordable fashion and a substantial online presence
Rainbow Shops sells affordable, trendy fashion like size-inclusive clothing, shoes, and accessories for women, men and kids.
Founded in New York in 1935, Rainbow Shops has since grown to over a thousand stores in the United States, with their online store as the largest one in the chain. Unlike their behemoth competitors, Rainbow is focused purely on fashion, creating bespoke shopping experiences that don’t feel like “shopping in a warehouse.”
“They can come in the store and go on a treasure hunt,” says David. “They can experience retail as entertainment.”
That makes for an experience that’s unique to the brand—and one that keeps customers coming back. It’s also an approach that has required creative thinking. The team out-maneuvers their competitors by moving and innovating faster—both in person and online.
Doing that requires a technology partner that can do the same. But that’s not always the partner the Rainbow team had.
The challenge: Technology was holding Rainbow back from keeping pace with the competition
When you compete every day against brands like Amazon, Walmart, and Shein, each of whom has thousands of engineers, the technology partner you choose is critical.
In order to innovate and not get left behind, you need a platform that’s cutting edge. Initially, Rainbow turned to Demandware as their innovation partner. At the beginning, there was a lot of innovation to be found. But soon, it was clear Shopify was where the locus of technological innovation had shifted.
Everything new and innovative came out on Demandware first, but there came a point where that clearly shifted to Shopify. Today Shopify is the clear winner.
David knew they needed to make the switch—but first, he’d have to tackle the daunting idea of replatforming.
“Replatforming decisions are really hard,” he says. “People in my position lose their jobs when replatforming projects don't go well.”
However, the best tech talent wants to build new things, and they want to do it on the leading platform. They don’t want to be stuck on an outdated technology or one that’s in decline. That’s why when David started socializing the idea of switching to Shopify, he found that his developers were excited and supportive of the move.
Aside from developer enthusiasm, he also had to make the business case that the overall benefits would outweigh the risks—and there are a lot of risks to any replatforming decision. After thorough vetting though, David said he and his peers “knew that the reward was going to be worth it.”
The solution: A partner that could match the pace of innovation and scale they needed
According to David, there were three main reasons why Rainbow Shops made the switch to Shopify after a decade with Demandware/Salesforce Commerce Cloud:
Technology: Increased innovation and speed to market
It’s a classic David and Goliath story. Rainbow Shop’s competitors were and are behemoths—but while behemoths have size on their side, it’s the Davids of the world that have agility and speed for beating their looming competitors.
The team at Rainbow Shops was full of talent with that innovative drive, but ultimately, they could only innovate as fast as their platform allowed them to. After all, it’s one thing to have an idea for a new feature that will significantly drive engagement and conversions—it’s another thing to get it implemented when your platform itself is a roadblock.
Or at least, that’s how it had begun to feel once Demandware became a part of Salesforce Commerce Cloud (SFCC), where new features could take months to a year to develop, and hundreds of thousands of dollars to boot.
With their lean team of engineers, Rainbow Shops knew that the way they’d stay agile would be to pick a strong technology partner, one that could scale their technical team.
“Shopify has 3,000+ engineers that are constantly working to innovate, update, and add new features to the platform, plus a third-party ecosystem of all of the other developers who are building cool new things,” says David. “[We knew that] being able to bring all of those things together would give us a leg up and let us compete with an Amazon or Walmart, where they have thousands of engineers of their own.”
The choice was simple: they could spend another few years locked into and languishing with a renewed Salesforce contract, or they could go with Shopify, which David and his team deemed as the “only option we were willing to entertain.”
David continues, “We didn’t feel any other options satisfied enough of the criteria to even be a candidate.
Financial: An 80% reduction in platform fees
Replatformings need to first be financially justified. Do the dollars and cents add up?
The answer was a solid “yes” for Rainbow Shops.
Shopify’s platform fees are eighty percent less expensive than Salesforce. We’ve seen huge cost reductions in moving from Salesforce to Shopify. It’s an enormous cost savings.
And it’s not just that Shopify’s platform fees are less expensive than Salesforce’s—it’s also the billing model that makes all the difference.
With Salesforce, “You have to estimate three years worth of your business and buy essentially that much GMV upfront with an annual upfront fee all at once,” says David. “You have to have your crystal ball out and make a perfect three-year projection. If you go under, they charge overages. If you buy too much, shame on you, you eat it.”
“With Shopify, not only is the fee 80% less expensive, we pay monthly for exactly what we use,” David continues. “No more, no less. Shopify has to earn our business every month.”
Three years into the relationship [with Shopify] and we could not be more thrilled.
Checkout: Removing friction and boosting conversion
Checkout is one of the most important parts of a shopping experience, and yet many platforms still push customers through layers of pages and steps in order to complete a transaction.
“Checkout is a game, and friction is the enemy,” says David. “Anything we can do to eliminate that friction helps us win.”
Nine customers out of ten access Rainbow over a mobile phone. Accordingly, it was a priority for David and team to reduce the number of keystrokes it took for their customers to check out.
“We do the same thing in our brick and mortar stores,” David explains. “We hate to have people standing in line. When they’re ready to check out and purchase, the quicker we can make that happen, the better the customer experience.”
That’s why the team was so excited to use Shopify’s Checkout, which has been found to be the best-converting in the world, as well as Shopify’s accelerated checkout offering Shop Pay.
The Rainbow Shops team was attracted to Shop Pay for its ability to help them expedite checkout and remove friction—which, as David puts it, “is something unique that Shopify can do that really nobody else in the business has.”
It’s a capability that puts Rainbow Shops into the realm of their much larger competitors.
“That ability with just a phone number or email address to get a text message, enter a six-digit code and you’re done—that’s Amazon level checkout,” says David.
And it’s not just the technology itself—it’s also the sheer scale of it.
“[Checkout] is a technology that can only work if you see enough people and enough transactions,” explains David. “If you only have 100 or maybe 1,000 merchants, the scale just isn’t there. Shopify has millions of merchants. That number of transactions enables Shopify to be able to build the kind of expedited or digital wallet that its competition just can’t build. It’s just Shopify and Amazon. Nobody else has any realistic shot to build anything that would approach this. No one’s checkout approaches what Shopify can do.”
When Rainbow Shops first moved to Shopify, one in five of their checkouts came through Shop Pay. Now it’s one in three and growing.
“That was the promise when we signed on,” says David. “And the reality has exceeded our expectations.”
We compete every day against people like Amazon, Walmart, Shein, who have thousands of engineers that work on their technology. Having great partners like Shopify gives us a way to compete against those behemoths.
The results: A shopping experience that rivals the competition—and goes a step beyond
For the Rainbow Shop team, switching to Shopify has saved time and money, which has freed the team up to ship more, faster—and get more creative and ambitious with their projects.
The team constantly benchmarks themselves against a number of competitors. They look at the features they have and determine how they can do them too, what features they can add, and how they can do even better. From the start, it’s a matter of creativity, yes, but also of speed: how quickly can they stand up the same feature Amazon just rolled out?
Shopify has proven crucial to the team’s ability not only to say “yes” to these new features, but also to think beyond them and implement them quickly—before they’re left behind.
“What we’re finding is that, what we’re looking for is not only already built into Shopify, it’s built into the new features they’re adding all the time. Plus we’re able to easily pick from what we want from the third-party marketplace. Those three things together are just giving us enormous speed advantages in terms of being able to add new functionality and get it up and running on the site in a quick manner.”
We can stand things up in fifteen minutes that would have taken multiple months and hundreds of thousands of dollars on Salesforce Commerce Cloud.
Here are just a few examples of how efficiency and innovation have increased from a development standpoint, and the results they’re seeing because of it.
Product video
The Rainbow Shop team wanted to add product video to their product detail pages to increase engagement and conversion rates.
As David puts it:
“It’s one thing when you’re shopping for a dress and see still images. It’s another thing when you can actually see the dress move on a person. As part of our product photography process, when we're taking the still images, at the end we capture a 10- to 15-second video of the model walking out, spinning, and then walking off. Once you capture that video, you need a place to store it, and you need a place to serve it.”
On Salesforce, implementing this new feature would have cost the Rainbow team six months and a six-figure sum, not to mention the ongoing costs to host and serve that video.
As luck would have it, Shopify had just put out a new feature that let the Rainbow team store the video directly in the platform and serve it on their product detail pages.
We’re now doing over a million video views a week at no expense to us whatsoever. This is an example of how having a really strong technology partner empowers us.
Post-purchase surveys
That’s not the only feature the Rainbow Shops team has stood up in 15 minutes.
At Rainbow, the voice of the customer is key to what they do—the fashions they foster, and the way they design their customer experience both on and offline. Post-purchase surveys are a robust way to capture that, capturing the voice of a customer who’s just made a decision to forge a deeper connection with the brand.
With Shopify, capturing that voice is a simple, easy-to-implement process. That’s due to the way this specific feature is built. But at a more fundamental level, it’s due to the deeper structure on which customer identity lies.
“Shopify has a foundation of a customer record,” David explains. “It knows if it’s a first-time or a repeat customer. Our ability to ask different questions of somebody who's new versus somebody who's bought from us before is super powerful. This has helped us completely revamp the way we do marketing attribution, with post-purchase surveys as a real check on how we would normally do attribution. It’s extremely accurate.”
The answers that come in through the post-purchase survey go directly into customer experience. For instance, questions about where and how the customer would like to receive their items, whether shipped to their home, to a store, or to a third party location, led the team to roll out exactly those options. And it turned out, the post-purchase survey was predictive of the popularity of each of those options.
“That kind of data is just invaluable,” says David. “And again, we literally stood that up in 15 minutes on Shopify. It was automatic and easy.”
Site search
Site search is huge in retail, and yet for many retailers it’s long proven to be a technical challenge. Customers search using many different permutations of words and phrases to locate a single item. Then add in things such as size and color, not to mention misspellings, along with the need to deliver results almost instantaneously—it’s a tall order.
Says David: “The amount of time we would spend trying to sculpt and fine tune search results every week, looking at what people searched, what results did it return, getting words on a page that would help that page rank. It was a never ending battle.”
But then the Rainbow team learned that Shopify was launching a new initiative with Google to bring Google Cloud’s search and discovery tooling to enterprise brands using Commerce Components.
Rainbow Shops was all in—so in that they ripped out their site search and replaced it with Google just two weeks before Cyber Week, confident they’d have it working before the big day.
Sure enough, it was launched, with time to spare.
“Now Google brings their knowledge of search—which, who in the world knows more about search than Google—and their AI and their machine learning, to the table,” says David.
They're literally taking a billion shopping searches every day and what they learn about that and applying it to the website.
“So let's take a little black dress, right? A common item that a woman shops for. How many different ways are there to say a little black dress? Sometimes people abbreviate it as LBD. They have lots of different names for it—more text than we could possibly have on the page. Yet Google, because they know what somebody wants when they type in any one of these hundreds of phrases, accurately returns a product set every time. These are the things that help us win and stay ahead in the marketplace.”
The result? Rainbow’s site search volume is up 48%.
Native apps
From a web browser on a desktop to a mobile app, users shop on many different kinds of platforms these days. It’s up to retailers to meet them where they are.
“If it's a big enough audience, we feel that we are being suboptimal if we don't offer an app,” says David.
On Shopify, it’s been quick and easy to find excellent partners in the Shopify ecosystem to help the team launch native apps inexpensively.
“Those options didn't exist in the Salesforce world,” David says, referring to the partner ecosystem.
They’ve since seen their new native apps account for 20% of their customer interactions.
Being able to have those native apps, being able to have push notifications to be able to communicate with customers—we wouldn’t have that right now if we were still on Salesforce.
Customizability
According to David, there “hasn’t been anything we’ve wanted to do in Shopify that we haven’t been able to build.”
“There are checkout things that we just can't do on our own, that only a large partner that has scale can actually pull off,” says David. “So making that platform decision or who you pick to partner with is probably the most important vendor decision that you'll make in this job.”
For David, he’s got the perfect example in the fact that Rainbow Shops is a thousand-store chain that’s been around since long before the age of ecommerce. That means they have many items out there in the physical world, such as physical gift cards, which need to be accepted in an online environment.
“We’ve built a module in our checkout that lets us take those old legacy cards and make them work within a Shopify checkout.”
Another example David gives is how the team handles a customer who chooses to have their package delivered using FedEx to what’s called a “Hold at Location,” such as drug store, grocery store, or a FedEx location itself—a popular option for people who live in apartment buildings without package rooms or doormen in an age where package theft is a real issue.
“This is a hard experience for the customer, as they really just want a safe place to be able to pick up their goods,” says David. “Being able to program in that option during checkout to pick a third-party location with a module in checkout enables that to happen. When you hear stories from people, who I think are uninformed, saying that the Shopify checkout is too rigid, and there are things that you can't do—that's not been our experience.”
Even three years into this, we see no alternative. Shopify has been a rock-solid partner. They've continued to innovate and power us to be able to stay current.
Considering a replatforming? Take a page from Rainbow’s book
Making the decision to replatform is, by nature, a fraught one—but choosing the right technology partner can pay off in spades. At least, that’s how David and the Rainbow Shop team feel about their switch to Shopify.
“If you're on the fence and you're trying to decide, ‘Is replatforming a project that I want to take on?’ I think you can use a similar framework that we looked at.
“Financially, there's going to be big cost savings in making the move. From a technology standpoint, there is no stronger partner than Shopify in the ecommerce ecosystem. Third, and maybe the most important piece, is that checkout experience. There just is no alternative to Shop Pay in terms of being able to offer a checkout that reduces the most friction.”
There’s another myth David wants to dispel.
Something that I hear from peers is that Shopify is for small retailers, it's not for large retailers. Our experience has been the exact opposite.
And David would know. At Rainbow Shops, they work with many vendors and partners.
“The platform you choose sets what’s possible and what’s not possible,” says David. “Shopify sits at the core that we build everything on top of. Shopify is a true partner—one that genuinely cares about our business. We give feedback to product managers across all different areas of the company, and we really feel listened to. We see it reflected in products.”
“I've been lucky a couple times in my career to kind of experience dynamics like that,” says David. “With Shopify, it's kind of the first time I've experienced it at this scale.”
That’s a good way to end this story. Rainbow Shops, the David that goes toe-to-toe with Goliaths many times its size, relies on Shopify to avoid defeat, and in so doing, has found a true partner.
“There's a reason why everything new comes out for Shopify first,” says David, “and a reason why we want to be on the platform where they're building things first.”
