Lightspeed partners with Google in global deal to boost small businesses online

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Montreal software firm Lightspeed POS Inc. has struck a global retail partnership with Alphabet Inc.’s Google to allow small businesses — many of which were devastated by pandemic closures — to advertise to local shoppers looking for alternatives to e-commerce giants.

After more than a year of pandemic lockdowns that forced retailers and small merchants to close their doors, Lightspeed — which provides cloud-based point-of-sale services for the retail, hospitality and golf industries — is betting that customers are shifting their buying habits online but still want to support local merchants.

The partnership, which will allow Lightspeed to embed Google’s advertising tools directly into its commerce platform, is aimed at attracting customers searching for products online, but unsure of how to conveniently view stock at nearby small merchants.

Retailers will be able to post local inventory ads on Google via the Lightspeed platform, pay to host marketing campaigns using Google’s artificial intelligence software, and manage business information listings on the search engine.

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“When you put those three things together, you put the independent retailer on a much more equal footing than much larger stores and brands, and it gives them a real ability to compete with Amazon,” said founder and chief executive Dax Dasilva in a phone interview.

Google has seen searches for local businesses spike 80 per cent year-over-year, and inquiries on product inventory at nearby small merchants — “who has gym equipment in stock,” for example — have surged by 8,000 per cent, the company said.

Dasilva said that the partnership has been in development for two years as they ran a pilot project to test the offering with small businesses on Lightspeed’s platform. A diving equipment retailer and scuba school in the Netherlands posted local ads through the program and saw their online traffic increase 24 per cent in the first month, in-store visitors rose by 48 per cent, and the average revenue by transaction jump 50 per cent, he said.

Google’s services will be integrated into Lightspeed’s supplier network, which it launched in January to help small retailers and independent suppliers restock their inventory.

“The local ad piece is free because we want our platform to be the default for these sophisticated retailers,” Dasilva said. “We think that this is a reason to buy Lightspeed, and a reason to be on the platform that’s considering all the angles of what a modern retail business will want to be.”

Lightspeed has had a busy year. It went public in Canada in 2019 before debuting on the New York Stock Exchange in September.

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It has also taken steps to broaden its services from its roots as a point-of-sales service provider and the company has been on a global acquisition spree. In December, Lightspeed purchased Rhode Island-based internet-based restaurant management software maker Upserve Inc. for US$430 million, and New York’s ShopKeep Inc. — which offers similar services — for US$440 million. In March, it purchased New Zealand retail-management software maker Vend Ltd. for about US$350-million in cash and stock.

Dasilva said that, as the pandemic eases and businesses welcome customers back, small businesses will need to integrate their in-store experience with online. He says that the pandemic accelerated omnichannel adoption by three to five years.

“This has been a transformational year for retail, and it’s accelerated our customers’ use of digital tools,” he said.

“The re-openings are going to mean a totally different way to look at business for retailers. When new retailers open or existing retailers move to these new systems from their legacy systems, they’re going to see that Lightspeed’s offering is from the back end with suppliers and operations, and then the front end with marketing and getting traffic.”

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