Lightspeed Wants You To Knit The Best Socks in the World
The pandemic (you know the one) has disrupted stores and restaurants in a way no one could have expected at the start of 2020. Health scare, mass unemployment, e-commerce, Amazon competition, ballooning debt… we didn’t start the fire, it was always burning… but now there are ambers everywhere and we’ve got to get to work to save the good china.
In order to save shops and restaurants from the ongoing bloodbath, dozens of solutions providers have gone into overdrive all over the world. They promise to help set up payments, loyalty programmes, hardware, analytics, e-commerce… anything to keep stores afloat. I’ve written plenty on the matter already, but had not yet spoken to an industry insider about what these solutions really offered, beyond the obvious. I thus reached out to Jean-Philippe “JP” Leblanc, Head of Technology at Lightspeed, to get his thoughts on the matter.
Lightspeed provides Point-Of-Sales-related technological services to small and midsize retailers and restaurants. Having raised 400 million during its IPO in 2020, it currently serves more than 100,000 customer locations, and reached $33B of gross transaction volumes in 2020. If anyone can explain what technology providers really offer stores, it’s this company's CTO.
Craftsmanship, and the gift of time
Survival (the pursuit of more time) is humanity’s most basic instinct. Time is our best friend, and our worse enemy. It is our rarest resource. A handful of companies, having realised this, have reached heights in valuation and brand recognition few could ever dream of. And they have done so in one of two ways : by extending time (more time, saving time) or enhancing time. Amazon makes our packages come faster, Netflix ensures we spend less time looking at adverts, Airbnb allows us to spend quality holidays as locals… and retail tech allows craftspeople to spend their time actually doing what they love : knitting beautiful socks and baking really, really good croissants.
This is, in essence, what JP advocates for during our discussion. “Forget the Tech, forget the product, forget about the bits and bytes and the engineering side of things”, he says with a smile. “At the end of the day, it’s all about making sure that craftsmen and merchants around the world can go back to their craft and not bother too much with all of the logistics of running a store in 2020. Technology is just an enabler to allow them to go back to that craftsmanship more than ever.”
Running a store or a restaurant was always an exhausting endeavour. It is even more so during a pandemic, but not for the right reasons. Many merchants took their first introduction to e-commerce in march 2020, with some great successes to be found, along with just as many disillusions. Indeed, despite popular belief, only having an e-commerce site is not enough. Merchants also need to know how to use it, which is no easy task according to JP. “You can’t just be online, you have to be successful online. (…) Just dropping an e-commerce platform on a laptop for one of those merchants then expecting them to be able to realise profit and realise that transition and pivot to online sales is a pipe dream.”
Entrepreneurs also need to become proficient in digital marketing, supply chain, HR, online payments… And that’s not even mentioning taking care of kids and family. Mastering all this leaves little time for what matters : acquiring and retaining customers by making great food, crafting great products, offering great services. As many entrepreneurs will know, the slightest drop in quality usually means more customers going to Amazon for their holiday shopping. This, too, is something they can ill-afford.
Without the right technology to combine and optimise all the above, a hard task becomes impossible. This is where many solutions provider come in. If properly implemented, all the gimmicks can automate large part of the business, from payments to deliveries, giving owners the chance to spend more time on what they’re passionate about. JP sums up this philosophy as follows : “At the end of the day, what we want to do is give them back some time. Let’s automate the entire world for them, so they can go back to [working on what they love]. That’s what they should be doing, not figuring out what kind of shipping logistic they have to have to ship something to Canada from Europe.”
Fighting the good fight
Paradoxically, tech also allows for more human connections, which are at the heart of small enterprises. The soul of many towns throughout the world are not only made of delightful restaurants and shops. They are also made of the dedicated people keeping those spaces alive. Wherever we live, we like to get to know them, just as much as we enjoy being recognised by them as valued customers. I’ve said it once, and I’ll say it again, being on a first-name basis with your local bartender is a one of life’s rarer-acknowledged pleasures.
Retail tech solutions such as loyalty programs optimise and augment this process of recognition and personalisation. This is what JP means when he says that “even though we’ve been saying that retail is dead forever, (…) retail is still alive and kicking, it’s just a little bit different.” He emphasises that “People are still looking for that human relationship more than ever, so the goal is not to replace (…) human relationships with just tech and digital workflow. It’s about augmenting what we can provide, and experience.”
This augmentation comes in the form of understanding what to sell, when, and at what price, to a range of different customers. By definition, this data is rare within small enterprises. This is why many solution providers grant access to a world of data which allows crafts-people to better understand their customers and what they want. This human connection, as well as great products, is what separates SMBs from giants like Amazon.
And though Lightspeed does not directly compete against large international retailers, there’s clearly no love lost there. In-between pleasantries about the quality of Paris’ Pains au Chocolat, Jp laments the lack of diversity on Amazon, adding that his family aims not to shop on the platform in order to support local merchants. As a Parisian, I particularly enjoyed this quip : “Next time I go to Paris, I don’t want to have a croissant in Starbucks, I want to make sure that there is a bistro somewhere where I can go”. I’d bet that this is a feeling shared by many.
And so the loop is complete : more technology means more time for entrepreneurs, and more time means better products and interactions with customers, who are then more likely to come back and help the business thrive. This, in turn, ensures the survival of cities’ specific cultures. Bezos does not crouch down behind a counter to high five his CFO after each sale — thank a cash register today.
When does a lot of Tech become too much Tech?
According to the wide variety of retail experts I’ve spoken to over the past few months, we’re not going back to “normal” any time soon. Habits were forged, sacrifices were made, investments were rushed… All in all, if you forget for a brief second about the deadly pandemic and the mass unemployment, the new normal is not so bad : I can do everything online, and I have more choice than ever when it comes to ordering lunch straight to my office (which is also my bedroom, and gym, and bar…).
As we bravely carry on through this sanitary mess over the next few months and years, hybrid systems will be developed to allow shops and restaurants to deliver more of their services and goods to larger swathes of the population. This means that technology spends are likely to continue to increase — as mentioned earlier, an e-commerce website is not enough to be successful online in 2021. A plethora of information must be gathered, aggregated and used, too.
This budget increase will inevitably lead to a fair bit of chaos, as with every influx of new technology. Entrepreneurs do not have an army of IT staff able to create a coherent retail tech strategy that will be relevant for years. And so, it is likely that a lot of technologies (contactless payment, AR, smart mirrors, inventory automation…) will be cobbled together, a patchwork of solutions that do not necessarily come together well. This will be a gift for niche players at first, but the industry will then inevitably consolidate as larger, better players eat up the smaller ones.
In the meantime, this Wild West of retail tech is not necessarily negative. According to JP, beauty often emerges from chaos. “It’s going to get a little chaotic within the store itself”, he predicts. “People are going to try to re-think experiences within a store. So I think we’re going to see (…) a lot of clumsy implementations of in-store experiences. With good reasons : they’re trying hard and trying their best to offer something unique and new.”
In 2021, we’re going to see stores and restaurants evolve as thousands of entrepreneurs grapple with building a puzzle of technology brick to gain more time to engage with their products and consumers. This will lead to incredible creativity, which I believe large players will learn a lot from. There is no such thing as too much (or too little) technology; what matters is implementing it in a way that makes the shoppers forget that they’re interacting with technology at all.
Good luck out there.