Restaurants and retailers which saw their physical outlets closed down by the coronavirus pandemic have been scrambling to stay in business with the help of omnichannel retail software vendors.
Canada’s Lightspeed POS and Shopify have seen their stock prices soar as they have reported significant growth in new stores on their e-commerce platforms. Both companies enable merchants to have their own branded e-commerce websites and a direct sales relationship with their customers, instead of being hosted on a marketplace.
Merchants turned to Lightspeed and Shopify during a period when Amazon was struggling to serve third-party merchants on its platform. As the pandemic spread, Amazon initially prioritized shipments of essential items from its warehouses, and suspended the restocking of items from
By shifting its attention away from smaller retailers, Amazon left the field open for Lightspeed and Shopify, which focus on taking retailers online and providing an omnichannel one-stop shop for the point of sale and e-commerce. They also provide software to help small merchants sell locally from their websites and build relationships with their customers.
“The advantage to small merchants of using Lightspeed’s e-commerce solution is that they don’t have to give up a big chunk of the economics and customer relationship to Amazon,” Brandon Nussey, Lightspeed’s CFO, said. “They can use our software to get online without needing specialist IT skills.”
Between March 13, 2020 and April 24, new stores created on Shopify’s e-commerce platform grew 62% globally compared to the previous six weeks, driven by a lockdown-related shift to online retailing as well as the extension of the free trial period on standard Shopify plans from 14 days to 90 days. In the U.S., new stores created on Shopify’s platform rose by 53% month over month in April, and by 70% in the U.K.
Shopify reported that, while gross merchandise volume (GMV) through its customers’ POS channels declined by 71% between March 13, 2020 and April 24 compared to the previous six weeks, its retail merchants managed to replace 94% of lost point-of-sale GMV with online sales during the same period.
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One of Shopify’s merchants is a Tacoma, Washington-based art gallery called Manic Mermaid. Forced to shut its doors in early March as the pandemic struck, Manic Mermaid doubled the number of the Live Shows it had already been running on Facebook where customers can buy items online.
“Our biggest benefit from using Shopify is that they keep meeting us where we need to go,” said Janelle Elms, Manic Mermaid’s co-owner. “We needed capital and they had a financing program. We needed to be able to invoice our Live Show customers, and Shopify had already built that in. Because Shopify approved a loan to us, we’ve now almost tripled the sales that we were doing before COVID-19. Our one-year loan will now be paid off in about 6-7 months.”
Elms said that, using Shopify’s software, Manic Mermaid is attracting new clients to its online business.
“One of the ways we’re doing this is by making changes to Shopify’s website templates to generate different looks, which we can do without hiring a coder,” she said. “For us, Shopify is our home hub, where we keep all our products and clients, and push them for marketing, retention, and multi-channel selling.”
As it saw its brick-and-mortar POS software business suffer following the COVID-19 outbreak, Lightspeed ramped up its online business, offering restaurants and retailers free access to its e-commerce, restaurant delivery, and omnichannel loyalty software for three months.
Even if retailers and restaurants were already selling online, staying close to their customers was going to be even more important during lockdowns.
Lightspeed saw huge uptake of its e-commerce software by retailer clients who hadn’t gone online previously, Nussey said. In April, Lightspeed reported a 400% increase in e-commerce volumes processed by its retailers compared to February 2020 levels, while its retail gross transaction volume (GTV) fell by around 35% . Although hospitality GTV fell by over 80% during the same period, uptake of home-ordering software by restaurant clients grew.
Simon Tooley, president of Canadian skin care and perfume retailer Maison Etiket, said he chose Lightspeed to provide his POS and e-commerce systems for cost and ease-of-use reasons.
“I couldn’t find another provider who could give me all I wanted for a reasonable price,” he said. “Also, very little knowledge and training are needed to be able to use Lightspeed’s POS and e-commerce platforms. As a small retailer, it’s hard to be always at the forefront as things change, but I rely on Lightspeed innovating its platform to ensure I’m moving as fast as the rest of the market.”
Etiket has been using Lightspeed’s POS system since it launched in 2011 and moved to Lightspeed eCommerce in 2017.
“Since we implemented Lightspeed eCommerce, we’ve been seeing double-digit sales growth year over year,” Tooley said. “Part of that is because we can focus on our customers and on developing new products, instead of dealing with platform issues. That means a lot for a small retailer.”
Tooley said Etiket has seen growth in its online business since COVID-19 both from its existing customer base who used to purchase in its stores and from new customers looking to find products online since the stores they used to buy from are closed.
“We’ve been using Lightspeed’s analytics reporting software since it launched, and it has helped us to grow our business, as we have data we wouldn’t otherwise have had,” said Tooley. “Using Lightspeed’s data helps us to build relationships with the new customers we’re winning online during COVID-19.”
In early 2019,
In its fourth quarter to March 31, 2020, Lightspeed saw 60% of new Canadian and U.S. customers contract for Lightspeed Payments alongside their core software subscription.
During the pandemic, Shopify and Lightspeed have worked to support local businesses. Shopify has focused on boosting local online orders for its clients, for example with its Buy Online Pickup in Store software, an integrated local delivery solution for merchants, and the Shop direct-to-consumer app enabling customers to search for and purchase from local merchants.
Average daily local orders on Shopify for the six weeks ending April 24 grew 176% compared to the prior six weeks, coinciding with the introduction of physical distancing measures. As of April 24, 26% of brick-and-mortar merchants in Shopify’s English-speaking geographies were using some form of local pickup and delivery solution, compared to just 2% at the end of February.
“As retailers are so important to their communities, we’ve encouraged all Lightspeed employees to support our customers and buy local,” Nussey said. “We started a social media campaign #lightspeedlocal, where we reimburse our employees who purchase goods or meals from their local Lightspeed customers.”
