Today’s businesses are navigating transformative innovation and unprecedented change. They’re facing heightened competition, staffing and operational challenges, and the rapid advancement of cutting-edge technology.
But transformation has long fuelled commerce growth, and businesses across the globe are leading a shift in the commerce landscape with their own innovation, adaptation and creativity. Whether adjusting course to stay competitive or taking risks to expand, Square conducted its annual Future of Commerce report to understand how businesses and customers from the United States, Canada, the United Kingdom and Australia will shape the global commerce landscape in 2024.
Facing inflation and higher costs, 43% of customers feel less optimistic about their financial situations than 12 months prior. In the face of financial uncertainty, customers are mindful of where they spend their money, seeking out businesses that offer value and efficiency.
80% of customers are interested in trying a new offering at a business known for something else, and 86% of customers would participate in specific perks, activities or events offered by a business. In 2024, customers not only expect businesses to incorporate technology but may even prioritise spending at businesses using AI or automation that makes their experiences more seamless.
I think a business’ relationship with a customer with technology as an intermediary doesn’t need to be soulless. Rather, you can provide more touchpoints so they feel closer to your business. That’s a big part of what we do at Hungry House. The inclusion of technology does not mean the exclusion of hospitality.”
Kristen Barnett → founder of Hungry House, New York City, USA
The Future of Customers Report: 2024 Edition
Sentiment around automation is overwhelmingly positive: 100% of retail and restaurant owners reported that automation and technology have improved their businesses.
45% of retailers have seen greater employee retention and increased profits as a result of their automation investments, while 67% of restaurant owners say that automation tools have directly benefited customers, either through customer experience or communication.
Customers support businesses exploring ways to automate with 76% of restaurant customers and 67% of retail customers preferring that businesses use automation over live staff in at least one area – particularly for repetitive admin tasks like making reservations or checking product inventory.
To stand out in a rapidly changing commerce landscape, multihyphenate tactics, such as diversifying revenue streams or adding non-core offerings, are now a significant element of a business’ strategy.
77% of restaurants plan to expand in the coming year by adding non-core offerings like meal kits, subscriptions, events or merchandise. 99% of retailers plan to invest in additional revenue streams, such as in-store events or advertising offerings, with the primary goal of keeping up with industry trends.
A multihyphenate business creates new revenue streams by expanding into non-core items and services, like a restaurant that sells meal-kit subscriptions or a retailer hosting after-hours events. These strategies are growing because they often work. They can de-risk the business by growing recurring revenue that’s less susceptible to volatile consumer trends and they give businesses a way to make inroads with their highest-spending customers. Non-core items and services can often yield higher margins than the main business.”
Ara Kharazian → Square Research Lead
Restaurant growth and expansion will be a strong global industry driver in 2024. 100% of restaurant owners surveyed plan to expand in the coming year, regardless of their restaurant type.
To help fuel that growth and stay competitive in a dynamic industry, restaurateurs are leaning into what their customers want, from using more environmentally sustainable practices to leveraging data and loyalty programmes to better understand customer needs and preferences.
To stay competitive, we are introducing a new menu that offers flexibility and dynamic pricing. We believe in providing an exceptional dining experience that resonates with our customers, without making assumptions about their spending behaviours or budgets. Every customer wants to feel valued when they choose to dine with us, so we strive to exceed their expectations whenever they visit our restaurant or food trucks.”
Mo Saad → co-owner of Fricken, Canberra, Australia
The Future of Restaurants Report: 2024 Edition
To compete in today’s complex marketplace, retail owners are already looking ahead to see where they can advance. In the coming year, they’ll be intensifying their focus on improving customer relationships and standing out with unique offerings to maintain a competitive edge.
Over half (56%) will be taking a closer look at their marketing tactics for Gen Z as the younger generations’ purchasing power continues to grow – a substantial increase from just 43% of retailers who focused on marketing to Gen Z in 2022.
I think it’s so important to reward loyal customers. I want Cakeworthy customers who shop with us regularly to know that they are getting the best bang for their buck. And they love it – our loyalty customer percentage is higher than our non-loyalty percentage.”
Brandon Shedden → owner of Cakeworthy, Ontario, Canada
The Future of Retail Report: 2024 Edition
All quotes from Square customers have been sourced from interviews for which they received compensation.
The Square Future of Commerce 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 s.et within each survey for 500 respondents per market in the US, Canada, the UK and Australia, between 27 October and 8 November 2023, using an email invitation and an online survey.
The Square Future of Commerce Consumers 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 15 November and 28 November 2023, using an email invitation and an online survey. Data has been weighted.
Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. For the interviews conducted in this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 2.2 percentage points for the Retail and Restaurant Surveys and by more than 1.6 percentage points for the Consumers Survey from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.
