LightSpeed Retail Review
2013 was a big year for LightSpeed, the Montreal based software company whose POS solutions now serve over 17,000 stores worldwide. In March, they announced the opening of their US headquarters in New York City. April saw them solidify a partnership with Moneris Solutions (see Credit Card Processors below) and launch a completely redesigned Admin interface they’re calling StoreMaster, a name which begs to be said in a low booming voice and accompanied by thunderclaps. In July, LightSpeed released Web Store 3.0, a customizable e-commerce platform that integrates with their POS. Oh, and they acquired MerchantOS and its cloud-based POS, which they rebranded as LightSpeed Cloud.
LightSpeed was started in 2005 by Apple software engineer Dax Dasilva, who began developing Apple programs at the age of 13. In 2002 he wrote software for an Apple reseller to manage its stores; Dasilva kept improving on that initial attempt, and a few years later LightSpeed Pro was born. It’s as full featured and beautifully designed as POS gets, with features and a look that make it seem more like an ERP platform for groovy Millennial retail shops. It’s evident from the interface of Lightspeed Pro that Apple runs deep in Dasilva’s blood, and that approach has certainly garnered attention: the software won Retail TouchPoints Next-Generation Retail Award in the Payments/POS category; Profit Magazine put the company on its Hot 50 startups list in 2010, and placed them on their Profit 200 lists for 2011 and 2012; Accel Partners forked over $30 million in venture capital (hello, NYC offices!).
So, with all of this recognition and growth surrounding LightSpeed’s hipster ERP software, what do we make of the MerchantOS acquisition? Though the cloud-based POS certainly rivals LightSpeed Pro in terms of features, its interface–clean and intuitive though it may be–looks way out of its league when compared with its offline sister product. Once MerchantOS had been fully absorbed, the app received a modest interfacelift: they changed the colors to match the LightSpeed brand. Other than that, it’s the same exact product as before they bought it, being supported by the exact same team. So, what gives? Will they be developed in parallel? Will they eventually merge into a single offering? Frankly, the biggest drawback of LightSpeed Pro (which from here on out I’ll simply refer to as “Pro”) is that it isn’t cloud based: it requires some planning to install, administer, and backup. Granted, its target market of 20- and 30-something retail business owners would be comfortable doing all this, but what business owners would want to take on IT if they can avoid it? It can be a real hassle to have to manage your backups or fix a computer when it breaks. That’s why IT departments were invented. But then regular people had to start working with IT people, and the two groups could not make themselves understood to one another. This is why the cloud was invented, so these two groups could separate and return to the natural order of things.
Which brings me back to Pro. Stacked side by side against Cloud, the two are pretty much equals in terms of functionality, and LightSpeed has removed Pro’s large upfront software license fees, changing it to a subscription model so that the two products don’t have to compete on price. This leaves LightSpeed in the awkward position of selling two distinct products that essentially do the same thing and cost the same amount. The good news here is that both products are excellent. Some people might not mind the extra responsibility that comes with Pro, and others might not care about Cloud’s minimal aesthetic (that’s not “minimalist,” which implies there is a design choice behind the look. Cloud actually sports a minimal amount of design). But I keep coming back to Pro’s biggest selling point over Cloud, which is that it’s infinitely cooler looking and more fun to interact with. But is that cool factor enough to keep users out of the cloud? For small to medium sized retailers, the target operation for LightSpeed, this kind of Software as a Service makes too much sense to ignore.
The best news for prospective users of Pro is that the acquisition of MerchantOS enabled LightSpeed to dramatically reduce and simplify its cost of entry. The old model was a traditional upfront fee for user licenses, then additional costs for optional modules, mobile licensing, and support beyond the first year; by today’s standards it was fairly prohibitive. A modest setup with one iPad register could still end up costing you $2,200 in license fees and starting in year 2, premium support–basically getting you phone support and software upgrades–would be another $600 a year. In addition to being expensive, it was complicated and confusing, and so the new pricing rollout seems a welcome change:
- Small – $89/mo, $79/mo if billed annually
- Pro: 1 store, 1 user
- Cloud: 1 register, 5 employees
- Medium – $149/mo, $134/mo if billed annually
- Pro: Multiple Stores, 2 users
- Cloud: 2 registers, 10 employees
- Large – $259/mo, $229/mo if billed annually
- Pro: Multiple Stores, 4 users
- Cloud: 4 registers, 20 employees
- Pro: $59/mo for each additional user, $59/mo to add e-commerce (for both, the monthly fee drops to $49 if billed annually)
- Cloud: $49/mo for each additional register (includes 3 employees); $10/mo for each additional employee
All plans include unlimited products, customers, and transactions, software upgrades and premium technical support. Both products have free trials, Pro for 30 days and Cloud for 14. Pretty simple, yes?
Now, to blast LightSpeed for this change: Pro still works out to be prohibitively expensive, for two reasons. The first is that, though both offerings have identical monthly fees, your IT costs are still externalized with Pro. These costs–for server hardware, maintenance, upgrades, backups, etc.–are all included in Cloud’s monthly fee. Worse, though, is reason number two: LightSpeed is now charging customers more than before for Pro–its annual operating costs have skyrocketed without a single change to its functionality or added value. In the first year, the subscription costs less than the license would have: $948 for 12 months of “Small” service vs. $1,098 for a single user license and support. But in year 2, it’s another $948; the old pricing model charged $399 for a year of support for your already-paid-for license. After three years of running Pro, you’ve shelled out $2,844, instead of $1,896–just shy of a $1,000 and you still have to maintain the whole environment.
Web-Based or Locally-Installed:
Pro: Locally installed. The LightSpeed Server installs on a Mac desktop or laptop, and all the store administration–setting up store settings, taxes, vendors, products, customers, etc.–is done through the StoreMaster (cue the thunderclaps) browser. You can run the POS right from the same Mac, or run it remotely from another Mac or iPad connecting to the server. You’ll ned to make backups of your LightSpeed database regularly (this ability is built-in to the software), but it’s also a good idea to run regular backups of the whole machine that’s running the server. When software upgrades are available, they’re free, but you’ve got to install them.
Cloud: Totally web-based. The upside to this is not having to deal with the backups and the software updates. The downside is that an internet connection is required to use any part of the software. There’s no HTML5 caching of any kind–not through the web browser, or through the iPad app. It’s all online, all the time. If you lose your internet connection, you lose your ability to sell.
Both Pro and Cloud target retail settings, but they also both offer extensive features for selling services as well as physical products. With the ability to create estimates/quotes, service and repair orders, as well as to define labor costs, you’ll find either product at home in a variety of settings. Food service providers and bulk grocery stores will find nothing of interest here, but it’ll work well in just about any retail environment, from an oil-change shop to one of those Brooklyn storefronts where beautiful people in thick-rimmed glasses sell artisanal llama cheese.
Specific Size of Business:
Any. Both products are user friendly and priced for all but the smallest of businesses. Likewise, both products are so feature-rich–with functions to support every part of the retail cycle, from order to purchase to stocking to selling, as well as extensive CRM capabilities and employee management–as to appeal to even the largest of big box retailers.
Ease of Use/User Friendly:
Pro: If you’ve used iTunes, you’ll be right at home with LightSpeed Pro’s StoreMaster. Everything you could need to do is accessible directly from the main browser screen. At first glance, the StoreMaster interface is a little intimidating. There’s just so much to look at, it’s hard to know where to start looking. But the task menus are neatly organized down the left pane, grouped into logical categories. Browsing through your inventory is like scrolling through iTunes’ Cover Flow feature, and selecting an item brings up detailed information, like how many you have on hand, if any are reserved, how much is on order, etc. The level of detail covered in StoreMaster is actually kind of astounding. The setup menu contains 8 categories with 41 configurable items, each item with several fields–and only when those are complete do you get to the “Advanced” settings. It’s not as daunting as it sounds, though, and you can fill out as little or as much of this stuff as you need. The Pro demo comes with a store all preconfigured for you to play with, which makes it easier to poke around through all the different features and see them in action. Though the LightSpeed website has a comprehensive User Guide, just clicking every possible button I could click gave me a pretty good understanding of how the software was laid out and how to put it to proper use.
LightSpeed also deserves some praise for its integrated backup feature. Since it’s not cloud-based, it’s nice to know that there’s some measure of data protection built in to the software. By default, Pro makes a backup of its database everyday at 11 PM, and it saves these into a hierarchical folder structure that makes the difference between Daily, Weekly, Monthly, and Yearly backups clear. Also, each backup is named with a timestamp so there’s no confusing when it’s from. By taking a few minutes to configure the directory where the backups are saved to make use of cloud storage, you’ll have a pretty robust backup policy guarding your store’s data.
Interestingly, the POS interface was not as clearcut. Pro does support barcode scanners, but I don’t have one; instead I used Button mode, which didn’t seem entirely well thought out. Generally navigating around the POS in Button Mode isn’t hard, plus it makes cool sounds that, along with its futuristic look, made me feel like I was selling clothes on the Starship Enterprise. But after adding items to a test sale, I couldn’t figure out how to remove them. There was no “Remove” or “Delete” button that I could see. I could change the quantity to 0, which had the right effect on the sale total, but the item was still listed among other items on the sale, just with a quantity of 0. Later on, I added another item, which appeared in the sale ticket with a red exclamation point under it. I could only assume this meant there were none in stock, or stock was low; double-clicking on the exclamation point didn’t yield an explanation, just a “Delete” button. Aha! Back to my other item, I double-clicked where the warning icon would have been, and the “Delete” button appeared. I also later found out that the exclamation point indeed indicates a stock issue; in Scan Mode you can see detailed inventory info for each product—why not in Button mode? There were a couple other minor annoyances in the POS screen–why can you add a new customer from the Customer section of the POS, but you can’t select an existing customer from the same spot?–but for the most part they’re the type of things that once you learn the answer it’s not difficult to work around. And as easy as it is to use, it’s still very advanced ERP software, so expect there to be a learning curve and for some serious thought to go into its setup.
Cloud: Despite its unassuming appearance and largely text driven interface, I found Cloud to be the easier of the two in terms of setup and use. Maybe it was just because I wasn’t overwhelmed with this very busy main screen when I first logged in. Instead, I was walked through an initial set up which includes a very cool feature for populating your inventory. The Cloud back-end is linked up with an extensive collection of vendor catalogs, and over 8 million items are available to be imported in your store. During the set up, you simply select which industry your products fall in–Sporting Goods, Agricultural, that kind of thing–and you’ll likely find that most everything you sell is already available for you to add to your inventory. Setting up your store, tracking inventory, and managing customers is extremely simple and intuitive. The back office features are extensive, too, and you should expect there to be a learning curve and for some serious thought to go into its setup. But in either case, once you’re off and running, expect your daily use to be easy and nearly hassle-free.
Hardware/Operating System Required:
Pro: The POS works on four different types of hardware: Mac, iPad, iPhone, or iPod Touch. The server software needs to be installed on a Mac running OS X 10.7 or later, with an Intel Core 2 Duo processor or better, minimum 2 GB of RAM (but 4 GB is recommended), and a screen resolution set to 1440 X 900. The mobile apps require iOS 5.0 or later.
Cloud: Essentially hardware agnostic, Cloud just requires a stable internet connection and a web browser. There’s also an iPad app, though it’s barely an app; it feels more like a web browser in kiosk mode displaying the Cloud website.
LightSpeed sells all peripheral hardware themselves and offers two bundles:
- Hardware Bundle for iPad ($999) – Includes APG cash drawer, Windfall C iPad stand, LightSpeed Bluetooth Barcode Scanner, Star Micronics LAN receipt printer, receipt paper, and a Merchant Warehouse encrypted uDynamo card swiper. iPad not included.
- Hardware Bundle for Desktop ($699) – Includes APG cash drawer, LightSpeed USB Barcode Scanner, Star Micronics USB receipt printer, receipt paper, and a Merchant Warehouse encrypted Dynamag card swiper. Desktop not included.
Any of these peripherals can be purchased separately if you don’t need a whole bundle. For models and pricing, check out LightSpeed’s hardware page here.
Since both Cloud and Pro share many of the same features, there’s no need to differentiate between the two for this section. Everything you read here applies to both products.
- Multi-Tender Fully Functioning POS: Processes all payment types: cash, credit, debit, check, gift card, and store credit (either from exchanges or established house credit accounts). Prints and/or emails receipts (and gift receipts) with product descriptions and notes. Gift certificates/cards can be barcoded for ease of use. Cards can be reused (add more money). Creates and applies discounts directly within the POS interface. Holds/suspends sales and returns to them later, or transfers them to another device. Adds new/existing customers to a sale directly through the POS interface. Easily performs returns and exchanges.
- Inventory Management: Track where your inventory is at all times: incoming stock, warehouse, reserved, available, total. Easily manage inventory cost and prices. Update cost and price of entire categories of products based on: supplier, category, or brand. Product matrix – easily enter multiple sizes and colors for the same product. Create preset levels for notifications when stock is low and need to reorder. Customize, create, print product labels (can even add graphics).
- Purchase Order Management: Track vendors, complete PO’s, and receive orders.
- Employee Management: Set individual employee access parameters. Provide each employee with their own unique password for accessing the system. Track hours and job duties; see where your employees are spending most of their time. Manage payroll.
- Work Order Management: Create work/repair orders, track repair progress, print claim checks and service labels. Track time and bill work orders based on time worked. Schedule appointments for services too. Turn quotes/orders into invoices/sales.
- Customer Relationship Management: Create/Select customers to add to a sale in all three platforms. Track contact information, credit limits, and transactions. Setup different customer categories to offer specialized discounts. Track outstanding balances and past-due accounts. Track all your AR, print statements, apply payments to invoices, to balances, or use credits against future sales.
- Reporting: Hundreds preset printable reports. Customize reports to filter by day, week, month, or year. View your profits by total revenue or margin. Browser export feature – any report lists can be exported to Excel in spreadsheet format.
- Multi-Store: Transfer inventory between locations. Full visibility of all stores’ and warehouses’ inventory (can lookup to see if another store has the product a customer wants.
Pro: LightSpeed Pro “integrates” with QuickBooks in a 2-click process: once to export out of LightSpeed and once within QuickBooks to import your data. Invoices and payments (i.e. accounts receivables), and purchase orders and supplier invoices (i.e. accounts payable) can all be sent to QuickBooks. The system will also keep track of all your QuickBooks syncs so you don’t have to worry about duplicate imports. LightSpeed also integrates in a similar way with financial bookkeeping software AccountEdge (previously MYOB).
The Web Store 3.0 add-on can create a fully customizable e-commerce platform that integrates with Pro’s inventory database, so that all your sales can be monitored and tracked from one place and your inventory remains consistent. LightSpeed will also sync with your online Magento store.
Cloud: LightSpeed makes Cloud’s API available publicly, so that customers can create their own integrations to suit specific needs. That is, if one of these available integrations isn’t what you’re looking for:
- QuickBooks – This integration exports files from Cloud into QuickBooks” .iif format to meet your bookkeeping needs.
- Perkville – Perkville allows customers to refer their friends to your business in Perkville in order to get discounts, promotions, and deals at a specific store location.
- Swarm – Swarm is an advanced CRM analytics tool that allows you to see what’s selling and to whom, helping owners to target top customers and increase sales.
- MailChimp – Synchronize your Cloud contacts with MailChimp and start campaigning. MailChimp is an email marketing campaign application, and its integration into Cloud means you’re always promoting to the right people.
- Shopify - Connect your POS to the Shopify online store application, and manage your inventory all in one place. It also allows you to import items and customers from Cloud into Shopify and vice versa.
Compatible Credit Card Processors:
Pro: For U.S. customers, Merchant Warehouse and Axia are the choices. Canadians can choose between Moneris or nothing, and Australians have Tyro. If none of these work for you, you can always use a third-party swiper and forego credit card integration.
Cloud: In the U.S. it’s Merchant Warehouse and Element Payment Systems. In Canada, Element Payment Systems is the only option.
Customer Service/Technical Support:
Since Pro and Cloud are now both priced with a subscription model, Premium technical support is part of each subscription, though the definition of “Premium” differs between the products–a result of LightSpeed absorbing MerchantOS whole and continuing its operations under a new name. Phone support is available for each product as follows:
- Pro: Monday – Friday, 9am – 1am EST; Saturday, 10am – 6pm EST; Sunday, 5pm – 1am EST
- Cloud: Monday – Friday, 6am – 5pm PST
There’s also email support, and a searchable support page with a database of troubleshooting and “How-To” articles. Pro has an extensive and detailed user guide available online, and both products offer an online knowledge base with answers to most any problem.
LightSpeed also has active Facebook and Twitter pages, featuring links to stories of interest, customer profiles, and generally trying to foster a community around their products.
Consumer response to LightSpeed–both flavors–is generally positive, but that does not mean either offering is without its faults. On softwareadvice.com, one user had a long and very specific set of complaints:
The Magento integration does not seem to work. Inventory counting is very difficult. Cash tracking is non-existant. Products cannot have fractional cent costs, which makes purchasing from suppliers in bulk completely break the PO functionality…Data corruption. Crashes. Weeks with downtime even though we’re on a support contract…Avoid LightSpeed. The POS is very weak at cash handling. It does not track cash in drawer accounting.” –Aaron from Intel Corporation
This review is on the rare side: most of the negative comments I’ve seen center around support, but don’t mention any tremendous headaches with the software. Those were more widespread a few years ago, but as the software has matured, the number of complaints has died down.
Complaints about Cloud are harder to come by, since it’s only 5 months old under its current name. Since MerchantOs is no longer available on the app store, I can’t see what reviews people might have left for it. And there’s not much negative I can find about MerchantOS if I search for reviews of it—this is a good thing. There’s only one review on the App store for Cloud, which complains that the iPad app is buggy, but then goes on to praise support and the service.
Personally, my chief complaint was with LightSpeed’s very aggressive customer pursuits. Each time I signed up for a trial, with Pro and Cloud, I had an email within 30 seconds, automated obviously, from one of LightSpeed’s salespeople. I always leave bogus phone numbers on signup forms—555-1234, usually—because I don’t want any calls. LightSpeed is the only company where someone emailed me to tell me number didn’t seem to work. But they all keep emailing, for one reason or another. When I did reach out to one rep to get some questions answered, he took this his as his cue to call me daily for about a week, leaving messages that I needed to call him back and it was urgent to do so before special pricing was no longer valid. This despite me telling him that he oughtn’t call me as a follow up. If I’m interested, I told him, I’ll let you know. He kept calling, anyway.
Overwhelmingly, though, LightSpeed users have good things to say about the POS. Here’s a sampling of the most recent user comments at softwareadvice.com:
We have been using LightSpeed for a few years now and can’t believe we functioned without it. We thought we knew what was selling in our store but once we were able to run reports with clear and precise data, we were able to see what was really happening…We just opened two new locations and are now utilizing the Multi-Store feature-this feature has saved us a lot of time and makes everything very easy and organized..The customer support is awesome, very thorough in their responses and assistance.” – Carrie from Desert Island Trading
The easy to use POS screen made training our employees a breeze…Inventory tracking is one of the biggest strengths of this software…We also added the LightSpeed webstore when we switched to LightSpeed – and we’re so happy that we did.” Justin from Shop Good
LightSpeed simplified the point of sale system for me and has been one of the best decisions I have made since opening my doors.” Cameron from Nutrishop STL
It’s hard to find many user reviews about Cloud—again, because it’s so new. MerchantOS had a very good reputation among its users; many were happy enough with it that they were worried what changes the new ownership would bring.
LightSpeed Retail is in an interesting position: they built up a successful business selling local server software, and then bought out a company selling its cloud-based equivalent. They’re selling both products now, with two separate teams—the original LightSpeed staff and the original MerchantOS staff—and they’re happy if you buy either one. But people have been saying “The future is in the cloud” for so long that the present is now in the cloud, which leaves the flashy looking Pro–LightSpeed’s homegrown success story–in the role of yesterday’s software. Its ho-hum looking acquisition, then, is what is keeping them current. Though there are still probably enough people too nervous to host their business-critical data in the cloud, it doesn’t make sense to keep offering both solutions in the long-term: there’s got to be a unified vision between the two or LightSpeed will seem as if it’s in perennial transition. Besides, why on earth would someone want to end up paying more, in terms of the actual monetary cost and total cost of ownership, for Pro, when Cloud does the job as well and with more ease? But that’s a question for LightSpeed to figure out. The good news for them is they’ve got two of the most robust and easy-to-use solutions in today’s POS market. Both Pro and Cloud are highly recommended.