Montreal retail tech company Lightspeed expands, offering small businesses alternative to Amazon

Dax Dasilva, outgoing CEO of Lightspeed, is seen in his office Tuesday, September 15, 2015 in Montreal. THE CANADIAN PRESS/Paul Chiasson

Montreal — Lightspeed POS Inc. is expanding its business to include suppliers, as the Canadian technology company jockeys to compete with dominant retailers like Amazon.

Montreal-based Lightspeed, which makes cloud software for retailers and restaurants to manage their cash registers and checkout systems, launched a new arm of its business on Tuesday to help retailers restock their inventory.

The system, called Lightspeed Supplier Network, is launching for bike stores, pet stores, jewelry stores and outdoor sporting good retailers in North America.

The new feature will help small retailers and independent suppliers better compete with Amazon, Dasilva said.

"A large e-commerce merchant like an Amazon has a lot of visibility across the supply chain -- a lot of data. In this case, we're using all of the data that's available to benefit independent, small- and medium-sized businesses and their suppliers," said Dasilva.

The system aims to give Lightspeed's retail customers an online marketplace to look for new, popular product suppliers, he said. Another goal is to make it more efficient for small shops to upload product descriptions and photos for online shopping, at a time when the COVID-19 pandemic has forced more local stores to rely on e-commerce.

"We hope to also give benefits back to the suppliers to help them really tune their manufacturing for what's really popular ... so that ultimately independent retailers don't have dead, dusty inventory," said Dasilva.

By letting both small retailers and suppliers forego faxing, phoning and emailing their purchase orders, Dasilva says Lightspeed is aiming attract more businesses to use its software.

Lightspeed isn't the only technology firm chasing the supply chain -- although different firms are taking different approaches. Ottawa-based Shopify Inc. has been investing in shipping and fulfilment centres for small businesses, while U.S. fintech company Square Inc. has an app store that includes inventory management software.

It could potentially be big business. In November, Statistics Canada reported that the majority of online sales across the country in 2019 were between businesses and their supply chains. Wholesalers contributed $85 billion toward Canada's $305 billion in online sales in 2019, while transportation and warehousing represented $60 billion, manufacturing was worth $38 billion, and retailers grossed $22 billion, Statistics Canada said.

Dasilva said that deepening Lightspeed's supply-chain business has long been a goal of the company, which went public last year with a goal of raising money for new lines of business.

Lightspeed is popular among bike store owners, an industry that requires particularly complex inventory tracking, Dasilva said. The company has been using its ties in the bike community to help test the supplier software.

"They can have more than 100,000 inventory items in the database, in terms of all the parts, and accessories, and frame and brakes," said Dasilva.

"When there are new stores, the suppliers will recommend those stores come on to Lightspeed because they will reap the benefits of that direct integration ... so, we hope to become the default system."

This report by The Canadian Press was first published Jan. 12, 2021.