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Lightspeed POS Sees Explosive Revenue Growth in Fiscal 2020

By
Mario Toneguzzi
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IMAGE: LIGHTSPEED

Montreal-based Lightspeed POS Inc., a leading provider of omni-channel point of sale platforms, experienced explosive revenue growth in both its fourth quarter and fiscal year 2020 which ended March 31.

The company recently reported that total revenue of $36.3 million in its fourth quarter was an increase of 70 percent compared to the similar period a year ago while total revenue for the year of $120.6 million was an increase of 56 percent.

“We are witnessing a historic shift in the way small and medium-sized businesses, the businesses at the heart of our communities, engage in commerce. Being omni-channel has never been more important,” said Dax Dasilva, Lightspeed Founder and CEO. “Our merchants are progressive, omni-channel thought-leaders that continuously reinvent the retail and hospitality landscapes. We are proud to be their key technology partner and are committed to powering their growth.”

“We delivered strong financial results to finish up our fiscal year, despite the difficult macro environment encountered through the back half of March,” said Brandon Nussey, Lightspeed’s CFO. “While the effects of COVID-19 will cause some uncertainty for the foreseeable future, we are encouraged by the signs we are seeing for Lightspeed’s solutions and what it signals for our long-term potential. With over $210 million in unrestricted cash we are well positioned to invest smartly through this period and emerge as an even stronger global leader for our customers.”

Lightspeed said it saw a record uptake in March of Lightspeed eCommerce, Lightspeed Delivery, and Lightspeed Payments platforms as retailers and hospitality businesses worldwide adopted new sales channels to continue reaching customers amidst the outbreak of COVID-19. The need for an omni-channel cloud solution coupled with modern, integrated payment solutions is no longer a competitive differentiator, but a business imperative, it said.

But in its fourth quarter Lightspeed experienced a net loss of $18.6 million compared to a net loss of $96.1 million a year ago and for its fiscal year it had a net loss of $53.5 million compared to a net loss of $183.5 million in 2019.

“The effects of the COVID-19 pandemic and related government shutdowns are impacting retailers and restaurants globally. We anticipate that customers’ GTV (gross transaction value) and the demand for our services will be impacted and business failures in our customer base will increase so long as social distancing measures remain in place in the core markets we serve. However, Lightspeed’s solutions have been helping to offset the toll that the pandemic is taking on hospitality and retail industries around the world,” the company said in a news release.

The company said the following trends have been apparent since the quarter end:

  • Despite present economic conditions, approximately three-quarters of Lightspeed’s customers are actively trading, meaning that they are processing volume through Lightspeed’s omni-channel cloud solutions;

  • eCommerce adoption remains robust with a 400 per cent increase in eCommerce volumes processed by Lightspeed retailers in April as compared to February levels;

  • Overall GTV from Lightspeed retailers in April grew approximately 50 percent from March levels;

  • Lightspeed Payments revenue had a record month in April, led by increased online sales, the impact of new customer adoption, and good performance across a subset of verticals such as home and garden, bike and pet;

  • Hospitality customer volumes remain challenged due to the ongoing government mandated shutdowns affecting most markets. Lightspeed’s hospitality revenue base is mainly subscription software revenue that is not variable to underlying customer volumes, with the largest concentration in countries like Australia, Germany, Belgium, Switzerland, the UK, and France;

  • The number of hospitality customers now using home delivery and curbside pickup options has increased sharply. In Australia, for example, there has been five times the volume through these channels versus a year ago; and

  • New customer demand was encouraging through April with new retailers, golf courses, restaurants and mid market opportunities all choosing Lightspeed solutions. While churn and customers on reduced subscription plans remained elevated compared to historical norms, Lightspeed ended April with approximately 75,500 customer locations subscribed to Lightspeed solutions.

“Heightened uncertainty in the global economy is having an acute impact on everyone, including our customers, their consumers, our partners, our suppliers and our employees. The degree to which COVID-19 will affect our business, operating results and financial condition in upcoming quarters will depend on future developments that are highly uncertain and cannot currently be predicted,” said Lightspeed.

“In response to the present uncertainty, we have strategically re-directed discretionary spending and funding for certain go-to-market initiatives towards solution innovation. We believe we are witnessing an urgent and lasting paradigm shift in the needs of small and medium-sized retail and hospitality businesses and we believe strong fundamentals, including our broad omni-channel cloud solution set, geographically-diverse customer base balanced between retail and hospitality, subscription-based software business model, compelling payments offering, and strong balance sheet, position us well to capitalize on this shift.”

*Partner content. To work with Retail Insider, email: craig@retail-insider.com

Tips for Securing Retail During Times of Disruption

By
Retail Insider
-

By Rick Snook

Retail will never be the same. In the last few months, retail has had to rethink its entire operation and approach to customer service to meet the pressing demands of today’s new normal. While most have done a pretty good job at securing their location(s) during the extended closures, some shops have been more exposed than others. Some businesses that were serving customers on a 24-hour service model had to shut down during this unprecedented situation and have become targets of break and enter. Perhaps because the level of protection was less due to them being unoccupied and closed for a long period. Perpetrators consider this kind of downtime as opportunistic, easy targets for break ins and shoplifting.

However, things are changing and some street facing retailers are starting to open their doors, but they are doing so in a post-crisis fashion, slowly, step by step, and with great caution. Their long-term strategy for doing business has been re-evaluated with strong commitments to the health and safety of their workers and customers. Policies and procedures are being reconsidered with an emphasis placed on protection and caring to respond to the essential needs of the communities that they serve.

The latest from the Retail Council of Canada, indicates that health and safety will remain of top concern for retail operators, employees, and customers during this transition period. This means properly restructuring floor plans to accommodate individual space, reducing store traffic congestion, elevated cleaning standards and sanitation, adding protective payment and serving barriers, employee and customer screening, and protective equipment.

SCREENSHOTS FROM AXIS WEBSITE

Surveillance helps with more than just protection

While retailers aim to comply with local regulations for reopening and what the new normal will look like, things like proper signage come into play, staff training on procedures and best practices, creating traffic patterns for physical distancing, and technology that can also help.

For retail locations that remain closed, good surveillance is key for remote monitoring to view activities outside of the store and to build incident reports to flag and file video recordings as evidence. When situations of theft, violence or other incidents occur quality video recording are critical. Owners need a clear picture of what occurred. For stores that are slowly re-opening, surveillance solutions can be added to provide store occupancy levels, audio recordings to create reminders of distancing and hand washing or providing cross line detection and customer instructions. Cameras can provide video detection of cars arriving for curbside pickup, where an audio announcement is then made, advising the customer to remain in their car while the order is being prepped and brought out. In this case, it’s all about recording the activity to have verification of who picked up their goods or for delivery pick ups. By using video and audio solutions, owners can also deter loitering and they can gather evidence recordings to support assault threats from irate individuals in the store. When considering surveillance to address the current challenges and to get the best investment, consider having the following:

  • A business continuity plan in place that includes how to handle the day-to-day and remote surveillance to protect property, assets, and people

  • A customer service strategy that lists standards for a positive customer experience

  • Intelligence tools that meet the risk assessment for occupancy (people counting), face mask detection, remote door stations with audio and video, and audio for remote communication deterrents

  • A checklist for emergency store closings and openings

  • An up to date contact list with those on furlough removed

  • Updated policies and procedures. In the case of Personal Protective Equipment (PPE) there should be standards for what is required

Solutions for new retail requirements

Retailers can retrofit their locations with simple surveillance systems, and in some cases, technology can be added using their existing system. It’s a matter of identifying the needs and then the technology to solve the issue(s).

Something like an occupancy estimator is a cost-effective method of accurately estimating the amount of people on the premises, so that a retailer can better understand visitor patterns and how their space is used. This valuable data capturing can help analyze overall occupancy for physical distancing measures, understand customer trends and enhance utilization of the space while providing the ideal environment to enhance customer experience and increase operational efficiency.

Occupancy estimator will assist with government regulations limiting the number of customers in a store, so the solution is also a smart option and can be used to cover single or double or multiple door entrances as multiple cameras with the application embedded can be linked to provide synchronized counting. With reliable two-way counting of people in both directions simultaneously, store operators can quickly analyze customer flow and identify peak visiting times. This direct access to real-time counting data can help stores make informed decisions like planning and allocating staff or security guards more effectively to safeguard staff and customers, ensure distancing and increase operational efficiency.

As customers try to accept the new normal in their retail experience, aggressive behaviours can escalate in a time when patience and physical safety are essential. Many safety and security incidents are preceded or initiated with sound. A camera with partner software for advanced audio analytics can help in vulnerable situations. This dual system continuously listens for pre-defined noises and initiates an alert when it hears aggressive behaviour, glass break or gunshot, ensuring immediate attention by store staff or security operators, who quickly can evaluate the situation by watching live video feeds and take necessary measures.

For customer experience and messaging speakers can be added to the system, enabling remote, immediate communication with customers. This in the immediate future reminds customers of physical distancing message to remain 6 feet or 2m apart, a hand washing message in the washroom area or a reminder message when someone walks through the entrance.

License plate recognition (LPR) can help to increase everyday efficiency and service levels like recording and capturing who is picking up at curbside or for added security measures in and around the building or in the parking lot. This requires a camera and partner software that runs either on the camera or on a server. It automatically captures the license plate in real-time, compares or adds it to a pre-defined list and then takes appropriate action such as generating an alert. The arrival of customers can also be enhanced my providing outdoor messaging that assistance will be with them shortly.

With the exponential rise in Uber or DoorDash food pickups, network door stations to notify staff when someone is at the store or restaurant for pick up, in addition to a contactless entrance is effective and sanitary for operators, drivers and finally for customers receiving the order. Door stations combine video surveillance, two-way communication and remote entry control in a single device. They’re a great option for install at entrances where many known and unknown visitors pass through on a regular basis and eliminates a high-touch door handle. They can also be used as intercom help points or emergency phones within a larger area.

The newest of technologies is body worn cameras that can be used by staff to record any activity at the touch of a button or continuously. With these new precedented times the safety of the stores greatest asset is people and using body worn can provide a complete capture of evidence that may be needed should an incident arise. The video recording is uploaded at the end of the shift by placing the device in the charging cradle.

What to watch for and who to ask

In these last few months, there has been a rash of new surveillance technologies introduced to the market, that may or may not meet mandated regulations or the criteria retail owners or restauranteurs need. Retailers and restauranteurs should be cautious and should not rush and purchase solutions that are for a temporary need, but that can assist the business in the long term.

Trusted surveillance integrators and suppliers who know the business should be who retailers go to at this time. Also, they should consider going straight to the manufacturers, as they know the technology better than anyone. Consultants and/or industry professionals who understand these verticals can also be a good source. Gathering all stakeholders and eco system partners can truly build the best solution for the business to obtain maximum benefit. Don’t purchase any shiny objects. Buy meaningful solutions for your business.

Rick Snook

Rick Snook is the Business Development Manager for Retail and Banking at Axis Communications. In this role he provides support and education and assists with providing comprehensive and sustainable solutions to our large end users while protecting our channel partners. Rick holds a Physical Security Professional (PSP) certification from ASIS International, Loss Prevention Qualified (LPQ) from the Loss Prevention Foundation, CPTED Level 1 as well as an Axis Certified Professional (ACP) designation from Axis Communications.

Special Edition 13: Predictmedix brings AI to Canadian Retail including COVID-19 Screening

By
Retail Insider
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An off-schedule podcast discussion with Dr. Rahul Kushwah, the co-founder and Chief Operating Officer at PredictMedix Inc, an artificial intelligence (AI) company with technology that tests for symptoms of COVID-19 and can be used to monitor spaces. Dr. Kushwah discusses how PredictMedix AI can screen for COVID-19 and physical distance enforcement in stores, malls, and any physical space.

The Weekly podcast by Retail Insider Canada is available on Apple Podcasts, Stitcher, TuneIn, Google Play, or through our dedicated RSS feed for Overcast and other podcast players.

Interview Details: 

  1. Dr. Rahul Kushwah, the Co-founder and Chief Operating Officer at PredictMedix Inc (a Canadian and US listed public company)

  2. PredictMedix on the CSE: PMED and OTCQB: PMEDF

     

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Drop us a line at Craig@Retail-Insider.com. You can also rate us in Apple Podcasts or recommend us in Overcast to help more people discover the show!

Cannabis Retailer ‘Tokyo Smoke’ Reopening Stores with Safety Protocols

By
Mario Toneguzzi
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Tokyo Smoke Yonge Street PHOTO: RETAIL INSIDER

With the retail sector starting to re-open due to the COVID-19 crisis, cannabis retailer Tokyo Smoke is looking at expanding its footprint and perhaps continuing to offer delivery service and curbside pickup for customers.

During the closure of stores for the past two months, Tokyo Smoke stayed open by offering Click and Collect curbside pickup and cannabis delivery services – and it did it so well that it was able to retain a significant amount of its customer base.

“We have exciting plans for the expansion of the brand, specifically in Ontario. The recreational cannabis licensing opened up earlier this year,” said Melissa Gallagher, Director of Franchising at Canopy Growth, which owns Tokyo Smoke. “Prior to March of this year, the retail cannabis licensing was done through a lottery system first awarding 25 licences and then through a second lottery awarding another 50 licences.

“Through that process we were able to secure 12 locations in Ontario – 12 of the first 75. Now that licensing has opened we’re really excited to grow that footprint with those existing and new licensees right across the province.”

The company’s Tokyo Smoke location at 333 Yonge Street in Toronto is Ontario’s largest cannabis retail location at 6,500 square feet. The space was formerly occupied by an HMV music store. There are nine Tokyo Smoke locations operating currently in Ontario with three more opening in the coming weeks. There are also five in Manitoba.

Gallagher said the company has locations in Alberta it will be opening once licensing allows.

“We do have aggressive growth targets. We’re primarily focused on Ontario based on the current regulations,” she said.

Tokyo Smoke sells a range of cannabis products - flowers, vapes, oils, capsules, chocolate gummies, and beverages. It also offers cannabis accessories and apparel.

Gallagher said the company is very excited to re-open to foot traffic again but will still offer curbside pick up and delivery for those people who would prefer to shop that way.

She said the Tokyo Smoke business has been resilient through this economic downturn caused by the pandemic. It has been able to focus on the absolutely necessary tasks to help accelerate the business during this challenging time.

The company had been working on its click and collect concept prior to the COVID outbreak.

“We had been really refining the store operations and ensuring that it was a program that was seamless from the user perspective and also from the store perspective,” said Gallagher. “So we had the ability to launch that, which has had an incredibly positive impact on the stores and their ability to safely serve their communities and also retain the business. We do see in some markets some of our stores have been able to retain up to 80 per cent of the sales they were doing pre-COVID,” explained Gallagher.

“The ability to be able to launch programs like click and collect and deliveries has given our licensees’ ability to retain a significant amount of the business.”

She said delivery is currently available under the temporary emergency order in Ontario meaning that until May 29 the Tokyo Smoke stores will be able to offer the delivery service.

“Then we hope if it’s the right thing for the licensees and the province that we’ll be able to continue to offer that for the long term,” added Gallagher, who said it will continue to offer curbside pickup.

“We’ve seen consumer behaviour shift quite seamlessly to curbside pickup. Not just in cannabis but basically across all of retail and we think it’s a seamless way to shop.”

Vancouver Area Retailers Busy as Stores Begin to Reopen After COVID-19 Shutdowns [Photos]

By
Retail Insider
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700 BLOCK OF THURLOW STREET IN VANCOUVER. PHOTO: LEE RIVETT

By Retail Insider

Some retailers in British Columbia began reopening doors on Friday May 15, and pent up demand is said to be resulting in strong sales at some stores as consumers return after nearly two months of store shutdowns due to the COVID-19 pandemic.

Retail Insider’s Lee Rivett and Ritchie Po took photos for this article. Mr. Rivett toured downtown Vancouver over the weekend and Mr. Po toured CF Richmond Centre. As per law in British Columbia, stores in enclosed malls have been permitted to reopen along with businesses that have exterior entrances (to date retailers in enclosed malls in provinces such as Ontario have not been permitted to reopen).

Some retailers are saying that pent-up demand is resulting in strong retail numbers. Retail Consultant David Ian Gray, founder and strategist at DIG360 Consulting Ltd., said that the Zara store on Robson Street saw very strong sales numbers when it reopened on Friday May 15. Retailers in the area have said that pent up demand has resulted in a situation where consumers are coming out of their homes with a purpose to spend money. Gray said that other retailers had said that sales were strong. The H&M store at CF Pacific Centre was busy and spaced out. Last week some stores in the downtown Vancouver mall weren’t open yet he said.

One source with a luxury brand noted that even when stores were closed, the well-known brand had seen comparable sales through remote clienting as when the retail space had been open before the shutdowns. This is interesting as it appears to show that high retail sales can be obtained by some brands even if a physical store isn’t present.

Not all stores have opened yet. Those that have are taking precautions, many of which have been mandated by governments. That includes occupancy limits, physical distancing protocol, sanitization and reduced store hours. Some retailers are providing face masks to guests and hand sanitizer is becoming ubiquitous.

The following are photos taken over the past few days in downtown Vancouver and Richmond.

Above: A lineup at the Artizia store at the southwest corner of Robson Street and Thurlow Street. Aritzia says that it is seeing strong sales numbers amid pent-up demand.

Above: Luxury stores in Vancouver’s Alberni Street ‘Luxury Zone’ have begun to reopen. It’s too soon to tell for some how sales will be. Many of these retailers have private shopping areas which will no doubt be a good thing at this time as well as into the foreseeable future.

PHOTO: LEE RIVETT

Above: The Versace store at the southwest corner of Thurlow Street and Alberni Street hadn’t opened as of the weekend, as per the photo above, but should be soon.

PHOTO: LEE RIVETT

Above: The Prada flagship store at the southeast corner of Alberni Street and Thurlow Street is open once again. The store had been shut for weeks and product had been removed.

Above: The Burberry store at the northwest corner of Alberni and Thurlow Street in the photos above once again has product on the shelves and is open to the public with limited capacity.

Above: Saint Laurent on the 700 block of Alberni Street has reopened after being boarded up for weeks. Moncler will open soon.

OVO (former Boys’co location). PHOTO: LEE RIVETT

Above: Some stores on Robson Street are still in the process of reopening. The OVO store in the photo above includes a door person wearing a face mask.

PHOTO: LEE RIVETT

Above: A reopened Club Monaco flagship store on Robson Street. Doors were left open to welcome guests while creating a sense that the space is well ventilated.

ROBSON STREET DURING REOPING AFTER COVID SHUTDOWN. PHOTO: LEE RIVETT

Above and below: Another shot of the 1000 block of Robson Street with soon-to-open retailers.

PHOTO: LEE RIVETT
PHOTO: LEE RIVETT

Above: Lululemon is beginning to reopen its stores, including its flagship on Robson Street at the corner of Burrard Street. Many storefronts in Vancouver were boarded over for weeks and artwork was painted to help lift spirits for those passing by.

PHOTO: LEE RIVETT

Above: A door person in a mask at the Tiffany & Co. flagship at the northwest corner of Alberni Street and Burrard Street. Below: The Jimmy Choo and Rimowa stores on Alberni Street have yet to reopen — Rimowa is new and replaces multi-brand ‘Artino’ which occupied the space for several years.

PHOTO: LEE RIVETT
PHOTO: LEE RIVETT

Above: A photo of foodservice business Thierry which has yet to reopen. Below is optical retailer Oliver Peoples which should be open again soon.

PHOTO: LEE RIVETT
PHOTO: LEE RIVETT

Above and below: Luxury retailers on the 1000 block of Alberni Street.

PHOTO: LEE RIVETT

Above and below: The 1100 block of Robson Street — Muji is expected to open soon. Below, the Nike store opened last week.

PHOTO: LEE RIVETT
PHOTO: LEE RIVETT

Above: the soon-to-open Victoria’s Secret store at the northeast corner of Robson Street and Burrard Street. We reported last week that 13 Victoria’s Secret stores in Canada will close permanently.

Below are photos by Ritchie Po of CF Richmond Centre, located south of Vancouver.

PHOTO: RITCHIE PO

Above: the Hallmark store at CF Richmond Centre features directional arrows, as well as a more spaced-out configuration.

PHOTO: RITCHIE PO

Above: Montreal-based eyewear retailer BonLook has opened at CF Richmond Centre. Prior to COVID-19, the retailer was expanding physical retail locations rapidly.

PHOTO: RITCHIE PO

Above and below: The mall’s Zara store has opened with spaced out merchandise and sanitization protocol.

PHOTO: RITCHIE PO
  • PHOTO: RITCHIE PO
  • PHOTO: RITCHIE PO
PHOTO: RITCHIE PO

Above: Shoppers Drug Mart in CF Richmond Centre is open. Beauty product testing has been halted for now.

PHOTO: RITCHIE PO
PHOTO: RITCHIE PO
PHOTO: RITCHIE PO

Above: Some stores have yet to reopen dressing rooms. This is posing a challenge as some retailers are also hesitant to accept returns at this time. Fashion retailers are quarantining clothing that has been returned or tried on. The quarantine periods generally range between 24 hours and three days.

PHOTO: RITCHIE PO

Above: Sleep Country Canada, which has been rapidly expanding into malls, is welcoming guests with caution. Below, Journeys has moved displays from the centre of the sales floor to create more space for physical distancing.

PHOTO: RITCHIE PO
PHOTO: RITCHIE PO

Above: Hugo Boss at CF Richmond Centre. The photo below is of the mall’s food court which does not yet allow guests to sit to eat.

PHOTO: RITCHIE PO
PHOTO: RITCHIE PO
PHOTO: RITCHIE PO
PHOTO: RITCHIE PO

In the photo above, the Hudson’s Bay department store at CF Richmond Centre has reopened with spacing, occupancy and safety protocols. Many Hudson’s Bay stores in the country have recently reopened, with more to come.

PHOTO: RITCHIE PO

Above: A normally busy Apple store. Spacing has resulted in significantly less guests in the space at one time. The photo below shows another angle of the lineup for the Apple store.

PHOTO: RITCHIE PO
PHOTO: RITCHIE PO

Above: The newly reopened Uniqlo store at CF Richmond Centre. The store carefully guides visitors through the vast space.

PHOTO: RITCHIE PO

Above: The Muji store at CF Richmond Centre features arrows directing shoppers that are being asked to line up. The store’s merchandise is much more spread out than prior to the store shutdowns.

Tomorrow we’ll take you on a photo tour by Jessica Finch and Craig Patterson in Toronto.

Will COVID-19 Have Canadians Relying On Credit More Than Ever?

By
Retail Insider
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By Leo Gutierrez

During “normal” times, credit provides a means for consumers and businesses to make purchases and investments when they’re short on cash. If used responsibly, credit cards can also be a good way to accumulate travel rewards and take advantage of cashback deals. Sadly, these are anything but “normal” times.

The Effects of COVID-19 on the Credit Industry

The COVID-19 pandemic is hitting consumers and businesses all across Canada and the rest of the world. Reports estimate that Canadian unemployment stands around 7.5%, the highest rate the country has seen since the 2008 economic crisis. As a result, many consumers need to fall back on credit while they await unemployment benefits. 

The Coronavirus has forced many to live their life online, safe inside their homes. Businesses have been forced to reexamine their online platforms to successfully ride out this wave.  Since shipping services are deemed essential services, buying goods online has become the go-to outlet for much of the population. It would not be surprising to see a jump in online credit card use for the first quarter of 2020 (and throughout the year) as compared to 2019.  According to a study by Canadian Payments Insights, a company offering analysis into the payment habits of Canadians, in 2019 “credit cards were the most popular payment method for online purchases in Canada.” Canadians used credit cards for more than 66% of all transactions in 2019. 

CREDIT: CANADA; TECHNOLOGY STRATEGIES INTERNATIONAL; 2019; 1,790 RESPONDENTS; AMONG THOSE WHO HAD PURCHASED ONLINE IN THE PAST 12 MONTHS; MULTIPLE ANSWERS WERE POSSIBLE © STATISTA 2020

However, the crisis is not just affecting consumers. With less cash to spend, retail stores are also taking a huge hit. Fortunately, Canadian businesses do have access to increased credit thanks to the Business Credit Availability Program (BCAP), Canada Emergency Business Account (CEBA), and other economic initiatives. That said, delays in certain government benefits could cause many retailers to close their doors for good.

Delays in Government Benefits

While Canadian citizens also have access to emergency government funds, the application process and wait times have left millions of individuals without a stable income for weeks at a time. This means that credit cards are being used in place of cash and debit cards. Consumers are turning to credit to pay for just about everything — from groceries to rent.

Right now, credit cards are a necessity for a lot of Canadians, but they also pose a financial risk. Nobody knows exactly how long the Coronavirus pandemic will continue, but many experts believe that there will not be a vaccine (or economic stability) for at least a year. Relying on credit cards and unemployment benefits for months at a time could be the only solution for many until day-to-day life returns to normal.

Tips to Stay Afloat

In this time of financial hardship and uncertainty, Canadians must remember not to overextend themselves. Acting responsibly and budgeting carefully could make the difference between weathering the storm successfully and experiencing long-term financial instability. So, here are a few tips to help Canadian consumers maintain fiscal responsibility during this crisis:

●      Don’t use all of your cash reserves immediately – If you have cash on hand, consider yourself lucky. However, you shouldn’t spend all of your cash first. Instead, try to strike a balance between cash and credit. This way, if an emergency comes up that requires cash, you will have cash on hand to deal with it.

●      Don’t overdo your debt repayment – Usually, paying more than the minimum on your credit cards is a good thing. However, in a time when your cash flow could be inconsistent, you shouldn’t spend extra cash unless it’s absolutely necessary. Pay what you can without taking away too much from your available funds.

●      Dip into your savings if necessary – COVID-19 presents the biggest crisis of our generation. If there’s ever been an emergency that required drastic measures, this is it. While you don’t want to drain all of your savings or retirement fund, you shouldn’t be afraid to take out some cash when you really need it.

●      Don’t be afraid to ask for help – The Canadian government has instituted a number of programs to help individuals get food, medicine, and money during this crisis. Research which benefits you are eligible for and apply as soon as possible.

To learn more about COVID-19 programs for individuals and businesses, consult Canada’s COVID-19 Response Page.

June Webinar Series: RISE Again Retail by the David Sobey Centre for Innovation in Retailing & Services

By
Retail Insider
-

By the David Sobey Centre for Innovation in Retailing and Services, a research centre at Saint Mary’s University.

We may never go back to retailing as we knew it. The pandemic has shifted consumer behaviour and employee expectations have changed many retail business models. The pandemic has financially challenged most retailers. The one sector that has benefited from the lockdowns was grocery retail. As more meals were prepared at home, grocers did well. Metro and Sobeys reported same-store sales growth for a four-week period during March-April of 25% and 37% respectively and Loblaws reported a $751 million increase March sales.

Other retailers, considered non-essential, have been closed for nearly two months. As the economy gradually reopens, some of them will not make it. Others will survive but will be wounded by the prolonged store closure. Some will not just survive but will thrive. The retailers who were financially and strategically in a strong position pre-pandemic, will come out of this crisis in good shape.

With social distancing and other restrictive measures set to continue for a while, retailers must ensure that their employees and customers are protected. Masks, gloves, and increased use of cleaning products in stores will be the norm for a while. Many retailers are planning on limiting the number of customers allowed into the store. All of this will increase the cost of doing business and put pressure on margins. Even before the pandemic hundreds of store closures were announced in Canada and the US. We are likely to see more closures due to the increased financial stress caused by the pandemic. Reitmans, which operates 576 stores in Canada across several banners, has filed for bankruptcy protection. In the US, JC Penney, Nieman Marcus, and J. Crew have taken the same route.

What must retailers do to ensure a strong post-pandemic recovery? If retailers take the effort to understand the emerging post-pandemic customer, think strategically, act proactively, and embrace change, they can come out of this crisis in stronger shape. The ones who yearn to go back to the way things were will struggle. This is the lesson coming out of our extensive research during the past two months.

At the David Sobey Centre for Innovation in Retailing and Services, which is a research centre at Saint Mary’s University, we have been surveying Canadians every month to understand how their attitudes and behaviours may be shifting during the pandemic as well as their values and outlook. From April to May we saw changes in how people shopped, how often they shopped and what they bought. More consumers have shopped online in the past two months than ever before. This is likely to continue. Consumers expect to focus more on their personal experiences in the future as opposed to merely owning material possessions. Consumers are reevaluating their choices in life and want retailers to do the right things to earn their trust. Retailers must understand these shifting consumer attitudes and values and respond accordingly.

We have surveyed employees in Canada and US to understand their issues, perceptions and how they are being treated by retailers. We have also interviewed senior executives from over 30 retail companies – from large multinationals to smaller regional retailers. The ones who are doing well and are poised to do well in the future seem to have a few common traits:

  • Core Values: Retailers with strong core values had a guiding light as they navigated through the dark and rough terrain created by the pandemic. Those who were short-term focused, opportunistic, and not really committed to some foundational principles struggled.

  • Know Your Customer: Consumer response to the pandemic is not uniform. Some will go to malls as soon as they reopen, and others are going to avoid in-store shopping. Expectations and spending patterns may be different post-pandemic. Invest the resources to get to know your customer. You may have to engage with different segments of customers differently.

  • Scrappy and Fail Fast: The change forced on the retail sector by this pandemic was at a level that has not been seen in the past. This required retailers to try different solutions to problems and innovate fast. Those who were scrappy and took fail fast approach have had more success. One retailer went from only physical stores to full-fledged e-commerce in two weeks. The online store was their lifeline as the stores remained closed for several weeks. Another retailer quickly trained store staff to become online personal shoppers. One apparel retailer whose stores were closed, launched an app within a week to enable a personalized mobile shopping experience.
  • Employees First: The companies that received positive reviews in our surveys were ones who put the employees above short-term financial metrics. “Hero” pay became an industry norm in the past two months. But these companies went beyond. One hired a psychologist to provide ongoing counseling to employees. Another provided full pay for staff even though all their stores were closed. They decided not to let their employees take the government support.

  • Long-term Play: We also saw great examples retailers who are thinking strategically and not just focused on weathering this storm. They see longer term opportunities in the market as weaker players exit. Shifts in consumer behaviour are opening new opportunities and a different role for their stores and online channels. They are positioning themselves to take advantage of these opportunities.

Using our research and insights from leading industry experts in areas such as retail strategy, leadership, retail innovation, and customer experience, the David Sobey Centre is pleased to offer a webinar series in June called RISE Again Retail. This is a series of six webinars, two per week, starting from June 9th.

We think it is a great opportunity for retailers, irrespective of size, to invest some time reflecting on how they should lead their companies through the next phase (Q3 and Q4, 2020) and then into the longer term. What does their strategy look like? Which opportunities for innovation should they address and how? What will the new customer experience look like and how do they meet the changing customer expectations? How can they build a strong internal culture that will sustain the company through all the change that is going to be inevitable?

These are some of the topics we will address in the webinar series. We are delighted that Sarah Jordon, CEO of Mastermind Toys, will be a special guest on the opening day. Speakers and instructors are industry veterans who will share their insights, engage participants in meaningful discussions and help participants formulate action plans. Those in leadership roles or anyone with a significant responsibility in a retail business can benefit from this program. Please visit us for information and registration.

*Partner content. To work with Retail Insider, email: craig@retail-insider.com

Morguard Aims to Gain Consumer Confidence as its Retail Centres Reopen

By
Mario Toneguzzi
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Keith Reading, director of research at Morguard, a fully integrated real estate company, has talked a lot recently about commercial real estate but one key word keeps popping up. Confidence.

“As with any sort of downturn, when you come through the other side, you don’t really see a recovery until confidence is restored,” said Reading. “That’s confidence on the part of owners, on the part of shoppers. With this crisis coming through on the other side, consumer confidence is going to be a big driver and I think that’s where there could be quite a bit of change.

“Consumers will need to feel confident to go back into shopping centres. This is an unprecedented event that we will have eventually come through. Rebuilding that confidence will take longer than I believe ever before.

“There’s a tremendous degree of confidence to be built. That’s going to be key. With regard to shoppers, they’ve got to rebuild confidence in certain brands. They’ll have to develop confidence in what I think will be new brands and new ways of shopping. Right now there’s a lot of uncertainty of how different stores are set up to receive their customers and both retaining existing customers but also bringing in new ones. There’s a tremendous amount of work to be done to gain that confidence. That will take efforts on the parts of building owners and managers with regard to shopping centres.”

Prior to the COVID-19 crisis, Reading said foot traffic in shopping centres was down generally across the board. That will be even more of a challenge now.

“Necessity is the mother of invention. This will force shopping centres and their managers and their marketing teams to come up with solutions to get shoppers into the shopping centres themselves and get them back shopping with confidence,” he said, adding that the coronavirus has to become a distant memory before consumers really start to spend again the way they did during the recent peak before the crisis.

“Consumers have to be confident about their jobs, they have to be confident about the economic outlook and with that confidence will come a little bit of almost reckless abandon in terms of shopping to get back to where we were in the previous peak.”

There’s also pent-up demand right now with consumers itching to open up the purse strings.

“There’s that desire to say look we’ve just gone through this period where we haven’t been able to go out, we haven’t been able to do some of the things that we took for granted, we were forced in a lot of cases to stay home, and I think once things start to open up, people are in a position where okay let’s go out, let’s have some fun, let’s go buy something to make ourselves feel a little better, to lick our wounds so to speak. Absolutely there’s some pent-up demand and there’s some desire to have a little fun,” added Reading.

Shopping centres and plazas anchored with essential services such as grocery stores and drug stores have been able to weather this economic downturn.

“We really saw during the financial crisis (of a few years ago) how well shopping centres did that had a grocery store, perhaps a drug store, perhaps a liquor store. They all fared really quite well through the financial crisis and in fact after the financial crisis we saw a lot of demand for grocery-anchored shopping centres,” said Reading.

“I think on a relative basis those shopping centres have done really quite well. And I think that will be the case also through this crisis. You’ve got to eat, you need medicine for whatever ails you and liquor is one of those things that can add a little pleasure in your life, it’s something people like to do. So it’s those types of properties with those types of tenants who have really fared quite well.”

But also during times of crisis it can foster some creativity, he added. For example, there’s been tremendous growth in things like pop-up shops. Property owners in losing some of their tenants will have to and will take the opportunity to try to grow their tenant base. That will drive quite a turnover in the retail sector.

Stokes to Permanently Close 40 Store Locations in Canada

By
Mario Toneguzzi
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STOKES EXTERIOR PHOTO: PLACE LONGUEUIL

Stokes, a Montreal-based tableware, kitchenware, and home décor retailer with 147 stores across Canada, intends to permanently close about 40 of its locations after it sought protection recently under the Bankruptcy and Insolvency Act.

Olivier Benchaya, partner with Richter Advisory Group, the trustee, told Retail Insider that the company had put into place its restructuring plan which included the closure of stores and it was liquidating the inventory in those 40 stores when the COVID-19 pandemic hit.

“And everything had to be brought to a halt,” he said. “The stores were closed I believe on March 19 and since then what the company has done is they’ve really tried to reduce expenses to minimize cash flow impact and preserve liquidity.

“The positive is their online platform responded very well. The volume increased significantly. So that has been helpful. The head office is partially functioning. The warehouse there’s distribution going out of there. But mostly the employees are working from home.

STOKES STORE AT MAIL CHAMPLAIN. PHOTO: MAIL CHAMPLAIN

“What we’re doing now is working with the company and their advisors to put together a plan for go forward with the business post-COVID and what that can look like. That includes sales assumptions, perhaps further head count reductions, or additional store closures. We’re not certain at this point. We’re looking at the alternatives. We’re essentially putting together that post-COVID plan of re-opening the stores and how that can translate into sales and also more importantly how the online platform will now take on a larger role given what we’re faced with. They’re going to be investing in that technology even further and improving the overall customer experience on the online platform.”

He said the company has identified 40 stores that are being closed but it will take about two to three months to liquidate that inventory. That process began prior to the COVID outbreak.

“Once (Stokes) re-opens they will be opened for a period of about two months to liquidate the inventory, two to three months. And then after which time they will be permanently closed,” explained Benchaya of the stores set for closure.

PHOTO: STOKES

On February 18, Stokes announced it had initiated the process to reposition its business for future growth and profitability by filing a notice of intention to make a proposal to its creditors.

“After many years of solid financial performance, Stokes, like most other retailers, is adapting to fundamental changes in the industry, including how customers shop. To better compete in today’s retail environment, Stokes will be reducing its retail footprint in Canada and streamlining its head office operations. The Company will continue investing in its online business which has experienced material growth over the last few years,” said the news release.

“Stokes will be closing its less profitable stores while maintaining the majority of its retail locations across Canada and its head office operations in Montreal, QC. Once the restructuring is completed, Stokes will continue to employ approximately 1000 Canadians. The Company’s management is confident that, through the restructuring process, Stokes will emerge as a healthier and more profitable business, well positioned for long term success to the benefit of all stakeholders.”

The company was founded in 1935. In a court document, Stokes said, like many other retail chains, it fell victim in recent years to adverse macro-trends, including changing consumer preferences, expensive leases and a general shift away from brick-and-mortar to online retail channels.

“Increased competition from discount and online retailers has exerted significant downward pressure on pricing and margins and, notwithstanding the Company’s efforts to implement measures to improve its performance, it has not been able to return to profitability,” it said.

Other factors included: store performance in Western Canada and Alberta in particular has been below expectations; the increase of the minimum wage across several regions has affected the cost of instore labour; the high cost of rent in certain store locations as a result of certain existing long term leases; and significant costs and lost revenue resulting from the implementation of a new enterprise resource planning system and new warehouse management system.

It said that for the 11-month period ending December 28, 2019, Stokes recorded a net loss before taxes of approximately $6,014,000. For the 12-month periods ending on January 26, 2019 and January 27, 2018, Stokes recorded net losses before taxes of approximately $656,000 and $2,456,000 respectively.

Law Firm Offering Free Legal Advice for Small Business Owners in Canada

By
Mario Toneguzzi
-

Small businesses across Canada are in survival mode right now, doing everything they can to get through the economic crisis caused by the COVID-19 pandemic.

And one of their toughest challenges is navigating all the legal issues that they face from questions about rent and employment to all the government assistance programs put in place to help businesses during this challenging time.

Calgary-based Goodlawyer, an online, on-demand service that provides access to lawyers across the country, is offering free legal advice to small business owners in Canada to help them navigate the complex and difficult legal questions related to the impact of the pandemic on their business.

“As the COVID-19 outbreak continues to impact small businesses in Canada, we’ve seen a significant increase in engagement with our platform as the need for legal support grows across the country. These companies have many questions, but few answers,” said Brett Colvin, CEO & Co-founder of Goodlawyer. “We want to give back to small businesses during this unprecedented time by offering free, no-strings-attached, legal advice from our network of lawyers to help them manage areas such as leases, employee relations, and various government support programs.”

Colvin said Goodlawyer has waived the fee for legal advice sessions for any business affected by the shutdown. Interested clients can visit goodlawyer.ca/coronavirus, enter the promo code #washyourhands, and then select their province and legal area they would like advice. Clients are instantly matched with an appropriate lawyer and their availability. On average, clients can apply in as little as five minutes and speak with a lawyer in less than 24 hours, said the company.

“We’re doing that because we can. We’re in a position where we have access to legal experts right across Canada that are able to offer services at these barn-burner prices and for a very small outlay from the company we’re able to help Canadians across the country,” said Colvin. “It’s been great for us as a young company to build our brand and to show that we’re actually out here and helping do some good. There really was a genuine desire to help Canadians and given our position to provide affordable legal help right across the country we were well situated to do that.”

Goodlawyer was founded in 2018. Colvin noticed early on in his legal career that it was challenging for people and businesses to access quality, affordable, and transparent legal services.

So an online platform was created to help find, connect, and receive “micro” legal services from qualified and vetted lawyers across Canada – all from the convenience of a laptop or mobile device. Today, Goodlawyer has over 60 lawyers in its network.

“We have lawyers signed up from right across the country,” said Colvin.

Colvin said Canadians can connect with a qualified lawyer to discuss issues related to rent and real estate, employee/employer relations, contract negotiations, access to government support, and more.

“All of the shut downs have been catastrophic and more today than any time in my lifetime certainly legal issues are at the forefront of people’s minds because we’re in unprecedented times and they’re bound to contracts whether it’s a lease, an employment agreement, a buyer contract, but these contracts weren’t designed to live in a world of a pandemic,” explained Colvin.

“That is bringing all sorts of legal issues and then overlaid on top of that are all of the government’s support programs that they’ve been trying to push out as quickly as possible fumbling some, doing a good job with others. It’s been just a fury of information for retailers and small business owners to kind of navigate through just to keep their business alive hopefully at the end of this pandemic.”

Colvin said navigating government support programs has been one of the ways people have utilized the free 15-minute sessions because business owners can get a ton of information to figure out where they fit within those government programs.

“Our lawyers are well versed in them. So for retailers in particular the CECRA (Canada Emergency Commercial Real Estate Assistance program) is huge and then obviously the Canada Emergency Wage Subsidy are the two big ones that retailers should have on the forefront of their minds and make sure that they maximize those,” he said.

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