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What is a Commerce Platform and How They Unlock the Future of Business

What is a Commerce Platform and How They Unlock the Future of Business

From manual cash registers to the first on-premise point of sale software to cloud-based point of sale systems, the way retailers and restaurateurs do business has greatly evolved over the years. The next step? Transitioning to a fully connected commerce platform for synchronized control over every part of a business.

With a commerce platform, business owners can unlock their potential—their customers and suppliers benefit as well. To demonstrate how, we’ll go over:

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What is a commerce platform?

A commerce platform is the technology for managing all aspects of a retail or restaurant business. If business is being conducted both online and on premise (either in the store, at the bar or at the curb), the commerce platform will connect those channels for more unified management. 

This goes beyond simply tracking sales across a business. As customers move between channels, so does inventory data, payment information, loyalty program rewards and more. 

By syncing every aspect of a business, modern commerce platforms offer consistency for business owners, employees and customers. They also have a lot to offer suppliers, as commerce platforms can put businesses in direct connection with vendors.

A commerce platform like Lightspeed covers all aspects of a business:

  • Merchant services
  • Supplier services
  • Consumer services
  • Financial services 
  • Data services

Businesses can conduct transactions and nurture customers. Suppliers can sell products and gain valuable data from B2B transactions. Customers can interact with businesses on any channel, giving the businesses more enriched data. It’s a fully connected system that operates like a well-oiled machine, empowering retailers and restaurateurs to innovate and adapt as their industries change. 

Here are the core components you can expect to find in a commerce platform.

Point of sale system

A point of sale (POS) system sits at the core of a commerce platform, processing transactions and storing inventory information. The POS tracks sales data and customers, and retail POS systems store data on category performance and product levels while restaurant POS systems enable menu building and floor plan customization. 

POS systems have evolved from legacy systems with little connectivity to cloud-based systems with mobility—a business owner doesn’t even need to be in the building to log in to their POS. 

Being cloud-based means a POS can integrate with accounting software, loyalty programs, eCommerce, analytics tools and anything else a business needs. This functionality is key to modern commerce platforms, as it means a platform can share data across systems and channels. 

eCommerce platform

Commerce platforms enable omnichannel commerce—doing business online and off. The eCommerce arm of a commerce platform handles the online part, hosting the eCom store’s theme, inventory and all the other pieces that are needed to make sales online. For restaurants, the commerce platform connects to delivery systems and ensures orders come in seamlessly, and allows them to diversify income sources with eCommerce merchandise sales.

Without a unified system, businesses need to coordinate their online and offline sales separately. If inventory doesn’t automatically sync across channels whenever there’s a sale, retailers risk accidentally selling goods they don’t have in stock. If delivery orders from UberEats aren’t as accessible as orders from the table, restaurants risk turning away the important takeout market.

Commerce platforms address these issues by connecting the point of sale and the eCommerce systems. Inventory levels are automatically kept up to date, customers can move between channels as they like and businesses see all their data and orders in one platform.

Advantages and disadvantages of eCom

Commerce platforms make eCommerce more manageable, but not all businesses using a commerce platform sell online. There are distinct advantages and disadvantages to eCommerce.

The advantages include:

  • A wider potential customer base. Businesses can expand their reach online. For retailers, this potentially means customers from a different state, or even a different country. For restaurants, this means delivery customers who can discover them through third-party platforms.
  • More convenience for customers. A shopper is busy during the day, and can’t get to the store during opening hours. No problem—they can make an order online and get it shipped or pick it up at the curb. A diner is craving their favorite dish on the way home, but they don’t have time to dine in. Again, no problem—the restaurant takes online orders.
  • Brand visibility beyond a physical location. Without an online presence, businesses miss out on new customers, even ones in the same city. When potential customers can find a business through Google or a delivery platform, they can try that new business out without needing to make the first visit in person. 

Meanwhile, the disadvantages can be:

  • A highly competitive market. eCommerce is important… which is why everyone is online. The longer a business waits to get online, the harder it may be to compete.
  • Extra costs, like shipping or delivery fees. Shoppers like free shipping, and third-party platforms charge fees restaurants previously wouldn’t have to pay. However, getting online with a smart promotional plan—so customers can find a business-means the extra business offsets the potential cost.
  • Inventory and order management. Without a commerce platform unifying every part of their business, retailers and restaurants might find managing orders from multiple sources difficult.

It’s up to every business to decide what’s right for their customers and their bottom line, but more and more, that decision is weighted towards getting online in some way. eCommerce sales lept to $438 billion dollars in the United States in the first half of 2021, and the trend isn’t slowing down.

With a commerce platform, making the leap to selling across channels is easier than managing separate systems.

Supplier marketplace

A commerce platform dedicated to connecting every part of a business keeps stocking up in mind as well. It will have (either through built-in tools or ready-to-connect integrations) a way to order inventory and manage purchasing without needing to leave the platform: a supplier marketplace, an evolution of the supply network.

In this way, commerce platforms don’t just work for businesses—they work for B2B wholesalers, vendors and suppliers as well. Businesses can oversee their purchase orders in one place, while suppliers get more connections to businesses primed to buy, and more data from those purchases.

Payment processing

Finally, a commerce platform will have a way to make sales through integrated payments so a business doesn’t waste time and risk potential human error with unintegrated payments. 

Integrated vs. unintegrated payments: what’s the difference? With integrated payments, a POS system and payment terminal automatically communicate with each other. In contrast, unintegrated payments require an employee to manually input the sale in the payment terminal and manually mark the purchase as paid in the POS.

Commerce platforms enable data flow between all the moving parts of a business, and integrated payments are no different. Businesses can access reports on payments and settlements from a commerce platform, just a few clicks away from inventory and sales reports.

Integrated payments will generally come from payment processing services from the commerce platform provider. Lightspeed, for example, integrates with Lightspeed Payments. This means that businesses only need to communicate with one company—Lightspeed—if they have any questions or want to upgrade their hardware. 

What are the benefits of a retail commerce platform?

While they both exist in the service industry, the needs of retail and hospitality businesses are worlds apart. A retail commerce platform is tailored to the everyday reality of a retail business, with an emphasis on inventory management, eCommerce and omnichannel customer features and access to suppliers. 

A comprehensive retail commerce platform will allow businesses to:

  • Categorize their inventory according to their needs, including setting reorder points for retail procurement
  • Oversee all eCommerce and in-store sales and functions from the same platform
  • Enable an omnichannel loyalty program
  • Give retailers access to tools and integrations to respond to the services shoppers want, such as appointment shopping
  • Allow retailers to take payments and track payment data with an integrated flow
  • Order stock without leaving the platform
  • Manage multiple locations 
  • Access data for their whole business

What are the benefits of a retail commerce platform for shoppers?

Shoppers think omnichannel. They don’t conceptualize online and brick and mortar stores as two different branches of one business. They think of the business as a whole, moving between channels and locations as it suits them. Retailers need to manage their business in a way that caters to that behavior.

A retail commerce platform helps retailers follow their customers across channels for a smoother experience. One shopper may decide to head into a store to do a little showrooming, then go home and place their order online. Another might collect loyalty program rewards online and then come in store to spend them on a gift card. 

No matter how they choose to shop, the commerce platform is offering them a consistent, frictionless experience without confusing contradictions and restrictions between channels. 

What are the benefits of a commerce platform for retailers?

Retail commerce platforms also offer retailers consistency and connectivity, which makes running a business across multiple channels and locations easier. 

Say a multi-location retailer needed to order new stock for three stores—they could use their commerce platform to make that order from their vendors without leaving the platform or managing three completely separate orders. Or, for another example, say a retailer has decided to offer curbside pickup. Their commerce platform would automatically coordinate those orders so the store’s employees can prepare the purchase. 

Beyond that, let’s imagine the way eCommerce operates starts to shift. TikTok Shopping starts to take off, adding to the energy of Instagram shopping. A commerce platform built to give retailers flexibility and agility will allow them to adopt that new mode of shopping without needing to integrate a whole new eCommerce tool every time.

But that’s not all commerce platforms have to offer. 

Because every part of a retailer’s business is connected through the platform, retailers have access to a complete picture of their operations. They can run reports and analytics on their sales, employee performance and inventory, then use that data to refine their business plan. Without that connection, retailers can’t know if their purchasing and promotion plans truly benefit all their sales channels and locations.

What are the benefits of a retail commerce platform for suppliers and vendors?

Commerce platforms with built-in supplier markets present vendors with a captive audience: retailers who want (and need) products to sell. There are less steps to finding B2B wholesale suppliers, because the catalogs live in the commerce platform and update automatically.

With fewer barriers to discovering new vendor catalogs and ordering stock, retailers and suppliers can build close relationships without needing to spend valuable time finding each other and coordinating platforms and orders.

Suppliers benefit from the data a commerce platform gathers, as well. Say a bicycle part supplier was taking orders through the Lightspeed commerce platform. As Lightspeed President JP Chauvet explains, “they can see sell-through with Lightspeed. And so for them, this is significant because what would happen before Lightspeed is that a bike [store] would not know exactly what was sold. They would receive orders every quarter at the replenishing, but they didn’t know between those order points what was happening. And now we enable them to see what is exactly selling so that they can adjust in real time manufacturing.”

In other words, suppliers get more supply chain transparency when they do business with retailers through a commerce platform. 

What are the benefits of a hospitality commerce platform?

Just as a retail commerce platform is tailored to retail needs, a hospitality commerce platform is made for how restaurants do business. For most restaurants, eCommerce means delivery orders through marketplaces—a hospitality commerce platform will have tools to enable that. 

As well, restaurants use commerce platforms to:

  • Modernize the ordering process, from ordering on iPads to enabling dine-in customers to place their own orders
  • Manage multiple locations from the same system
  • Build custom reports to oversee their business
  • Take payments at the table, bar or anywhere else diners are
  • Customize their floor plan in their POS system so staff always know the layout
  • Make menu changes across all locations in an instant

What are the benefits of a hospitality commerce platform for diners?

The way customers interact with restaurants and wait staff has evolved. With a commerce platform, restaurants can go from pencil-and-paper orders to digital tools—tools that automatically send orders to the kitchen and allow customers to scan QR codes for menus and payment. 

Dine-in customers, then, benefit from a more efficient workflow. Their orders going to the kitchen quicker means less wait time, even if a restaurant is low on staff. They can pay at the table, and employees can easily split their bills however they want. 

But that’s not all—takeout and delivery diners benefit as well. The connectivity a hospitality commerce platform offers means even during busy periods, they can be sure their order is received and accepted. Integrated payments unlock the possibility for contactless payments, too, so takeout orders can be paid for at the curb or the bar. They can quickly get in and out. 

What are the benefits of a commerce platform for restaurants?

Taking orders through a commerce platform is convenient for customers, but for restaurateurs, it’s even better: it’s a source of useful data. Business owners can monitor their menu performance and sales data for loss leaders and big hitters, as well as any differences in top dine-in vs. delivery dishes. 

Being able to offer delivery in the first place can be a source of pain for restaurants. Coordinating orders across multiple sources isn’t easy, but being as visible as possible—and so, listed on multiple delivery websites—extends a restaurant’s reach. A commerce platform solves that problem by connecting everything into one system.

These benefits are on top of just how useful it is to have cloud-based access to the POS system powering a restaurant. For example, with a commerce platform, a restaurateur could make an update to the menus in two locations and on their delivery platforms and push the update to each menu live at the same time without any delay.

What are the benefits of integrating with a hospitality commerce platform for suppliers?

Right now, the online B2B food supplier market is behind the retail B2B wholesaler market. Because fresh ingredients can be much more regional, there has been less of a push to consolidate suppliers into one platform restaurants can order from. 

But innovation has been happening, and some supplier ordering integrations do already exist, such as Kitchen CUT or Growzer

An integration with a commerce platform has similar benefits for hospitality suppliers as retail suppliers—a captive market that wants the products the vendors have to offer, with the oversight and convenience that comes from managing everything in one place. 

Equip your business with a commerce platform

Commerce platforms represent the next step in business management. They put everything a business owner needs at their fingertips and ensure they can always stay ahead of how the industry is innovating. 

Let’s talk about how your business can use a commerce platform to meet your goals and grow. Get in contact with our experts for a consultation.

 

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