Yes creating subdomains link (shop.domain.com) can be its own wp install. You can also install wp into sub-folders which would be after the domain (domain.com/foldername). Just be sure your hosting can support more than 1 wp site.
I have basic wordpress hosting....it says 1 website....but it's technically one website (site.com and site.com/blog) with two WP installs.....=) is that possible? or do i have to upgrade?