What mid-sized retailers need to succeed
Lightspeed founder Dax Dasilva on why this isn't the year of Apple Pay, going omnichannel and more.
Dax Dasilva is the founder and CEO of Montreal-based Lightspeed POS, a point-of-sale tech and software developer that has worked with over 36,000 mid-sized and independent retailers and restaurants in Canada, the U.S., the U.K. and Australia. Past customers have included legacy photography brand Leica, boutique chain Dash and high-end vintage chain LXR & Co. Strategy recently spoke with Dasilva about what those retailers should be doing to stay ahead of trends in the sector, and which trends they should be more wary of, in the year ahead.
You’ve mentioned that 2016 is not the year Apple Pay and similar digital wallets and payments will take off. Why is now not the time?
Well it’s not to say that 2017 or 2018 won’t be the year where Apple Pay and other NFC methods hit that critical mass and gain traction. But what we’re seeing now among the 26,000 independent retailers we work with is that this is not something that’s being asked for a lot by their customers. People still feel weird pulling out their phone instead of plastic and, even if you are using it, you might have run into situations where cashiers aren’t equipped to work with it, and that dissuades you from trying again.
The other side of the coin is that the NFC players haven’t given people incentive to use it. You kind of understand your credit card, but when you put that into something like Apple Pay, people still have uncertainty about how it works, security issues or if someone is getting a fee from it. I think what might start to happen this year is the players begin to offer incentives that motivate people to try it, especially as more iPhone 6 models enter the marketplace. But those examples don’t exist just yet, despite its great potential.
So if I’m a mid-sized retailer looking ahead at NFC payment reaching critical mass, how should I be approaching it in the short-term?
Everybody that’s installing EMV hardware (the technical standard for smart payment cards) in their stores also gets Apple Pay for free, and EMV is something retailers are really behind on, even though there’s been aggressive information campaigns around how a case of fraud could impact you really negatively, especially when you’re a smaller retailer, and how EMV helps with that. But not everyone made the October deadline. But I think this year, as people invest in their payment tech and POS systems, that EMV hardware will get rolled out more, and that supports Apple Pay, and that’s the first step to being ready.
Is the growing popularity of membership models something smaller retailers could get in on?
Independent retailers are, at their core, excellent curators. That’s their magic, having the right product for the right customer at the right moment. The subscription model is just an extension of that. If you can get regular customers to consistently trust your abilities to curate enough to get something sent to them, that’s your ultimate connection. They love your taste, trust your sense of value and you’re giving them a way to buy into it. It’s not for everyone, but it’s great for those customers that really trust you and are your biggest brand advocates. And those early adopters will help create a recurring customer base that keeps growing.
We’ve seen the ways social media platforms have been trying to facilitate e-commerce experiences and make content shoppable. Are there risks involved with mid-sized retailers trying to be a part of that?
I don’t know that we’ve seen people hitting those buy buttons quite yet, but there will be a point when people start to. The opportunity and potential of that is too big for anyone to not be trying to make it work for them, and you’re going to see players of all sizes make different attempts at finding out how to do so. The risk is that the addictive nature of scrolling through your feed starts to feel more like shopping than the experience people are used to, that’s when it might turn off customers. It has to be done well and optimized, but you’ll see a lot of attempts at that this year, both from the social media companies and the retailers.
Will “omnichannel” still be the big buzzword of the retail sector?
It was a buzzword, but now, when you open a store, you are also planning an online presence and how it is going to blend. What was something special is now the most basic thing you can have, and for a smaller retailer to compete with Amazon or big box retailers, they’re going to need to have that blended experience. Our customers are always asking for that, but without the extra work and having to manage multiple systems. But I think you’re going to see the capabilities to do that develop more in response to that. And Gen Z loves the small, unique, boutique brand, so it comes back to providing that kind of experience.