Square Report Reveals Businesses Are Shifting From Survival to Growth Mode in 2024
Today, Square released its fourth annual Future of Commerce report, a comprehensive analysis on how business owners and consumers are considering the evolution of the restaurants, retail, and beauty industries. The report offers insights on how these businesses are shifting ? and how consumers are responding ? particularly amid further advancement in automation and generative AI.
In collaboration with Wakefield Research, Square surveyed thousands of business owners and consumers on restaurants, retail, and beauty industry trends across the United States, Canada, the United Kingdom and Australia.
"For businesses, the future is looking cautiously optimistic, and business owners say they're looking to grow despite diverging consumer economic sentiment," said Matthew O'Connor, Head of Verticals and Platform at Square. "With Square's ecosystem, businesses can easily expand ? whether that means opening a new location or introducing new non-core offerings ? while continuing to drive customer loyalty and engagement."
Decisively, 100% of surveyed Canadian restaurateurs say they plan to expand their businesses in the next 12 months through offering new products or opening additional locations, and 80% report feeling more optimistic about the future of their restaurants. At the same time, approximately three in four Canadian consumers say they expect to pull back on restaurant spending in 2024.
- As restaurant owners look to expand, 89% say they'll experiment in the coming year with non-core offerings like meal kits, subscriptions, events, and more. Restaurateurs say that right now, 19% of their revenue stems from products and services outside of their core restaurant offerings.
- Meanwhile, Canadian consumers are looking for a tech-forward approach from eateries ? 60% are supportive of local restaurants using AI-based tools, and 76% would prefer to place their orders via self-serve kiosks. This bodes well for businesses where staffing is top of mind, as understaffing issues have persisted at restaurants for a reported average of 19 months. All surveyed restaurateurs in Canada (100%) believe AI could solve some of their staffing challenges, particularly food prep robots (44%), voice ordering technology (42%), predictive ordering and inventory management (40%), and food prep and delivery management (38%).
- Restaurateurs are not only investing in AI to address labour challenges ? more established automation tools are also on the agenda in 2024. Fifty six per cent of surveyed owners plan to increase their spending on technology and automation tools in the next 12 months, and 76% of consumers want restaurants to invest in at least one area of automation when they're not at full staffing capacity.
"Automation and AI are going to be key growth levers for restaurants in the coming year, though not in the way you may think," said Ming-Tai Huh, General Manager of Square for Restaurants. "The vast majority of restaurants will be integrating AI into their operations in small, iterative ways ? not through flashy robots but through automation in marketing or kitchen workflows ? and these minor changes will add up to saved time and more profit."
Growth is top of mind for retailers as well, with 61% saying they're eager to expand in the coming year ? though they are split on whether to prioritize brick and mortar (52%) or online offerings (48%). With 71% of Canadian consumers typically shopping in-store and 29% online, the research emphasizes that keeping in touch with customers via digital channels is key no matter where or how they choose to shop.
- Offering compelling in-store experiences is key to driving traffic into stores ? Canadian consumers report they're most likely to try offerings like in-person loyalty programs (62%), in-store dining options like a coffee or wine bar (46%), and interactive displays, kiosks, or activities (33%).
- AI-powered product recommendations is the top priority tool for Canadian retailers of all sizes to implement, especially for those planning to add more online options over the next year (41%).
- To compete in today's marketplace, retailers are offering more choice and flexibility to reach new and existing customers ? such as by implementing faster and easier communication channels with customers (42%) and providing Buy Now, Pay Later options like Afterpay (41%).
"Whether retailers are focusing on in-store or online shopping, it's more important than ever to maintain communication with your customers," said Roshan Jhunja, General Manager of Square for Retail. "Retailers should be building rapport and staying connected with their customers through social media, email, and text, and they should also be finding ways to create unique in-person experiences to bring folks into their stores."
The report also includes findings on beauty and how consumers approach finding (and sticking with) beauty care providers ? 54% have a preferred provider, though 58% have switched due to factors like overly long wait times. Consumers have also signaled interest in turning to beauty or personal care providers for in-person classes (20%), online tutorials (18%), and at-home DIY boxes (16%).
For a full analysis of the top restaurant, retail, and beauty trends for 2024, industry data and insights from Square experts, and real-life examples from Square sellers, download the report here or reach out to [email protected].
About Future of Commerce
The retail and restaurant surveys were conducted by Wakefield Research among 2,000 retail owners and managers and 2,000 restaurant owners and managers, with quotas set within each survey for 500 respondents per market in the U.S., Canada, the UK, and Australia between October 27 and November 8, 2023, using an email invitation and an online survey.
The consumer survey was conducted by Wakefield Research among 4,000 nationally representative adults ages 18+ in the U.S., Canada, the UK, and Australia, with quotas set for 1,000 respondents per market, between November 15 and November 28, 2023, using an email invitation and an online survey. Data has been weighted.
About Square
Square makes commerce and financial services easy and accessible with its integrated ecosystem of commerce solutions. Square offers purpose-built software to run complex restaurant, retail, and professional services operations, versatile e-commerce tools, embedded financial services, buy now, pay later functionality through Afterpay, staff management and payroll capabilities, and much more ? all of which work together to save sellers time and effort. Millions of sellers across the globe trust Square to power their business and help them thrive in the economy. For more information, visit www.square.ca.
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