Square partnered with Wakefield Research to survey North American consumers, retail owners and restaurant owners to uncover insights about the 2023 commerce landscape.
The future of commerce is fast and flexible. North American businesses are resilient, setting trends by working smarter with automation, optimizing experiences with digital commerce, shepherding in a new generation of entrepreneurs and redefining industry verticals.
Today, change is a constant for businesses as they face supply chain shortages, staffing concerns and economic uncertainty. But customers are more flexible and understanding of change than businesses might think: 88% of consumers agree that given the impact of inflation and the rising cost of goods, they would be understanding if their favourite local businesses raised their prices.
Younger consumers in particular want small businesses to succeed. The majority of Gen Z consumers (51%) would rally behind smaller businesses who might be struggling. That mindset also translates into who is looking to jump into the entrepreneurial pool, with Gen Z and millennials the most likely of all consumers to consider starting a business right now.
And young people aren’t alone in their entrepreneurial thinking. More than 3 in 5 consumers agree that with the technology and tools available today, it’s never been easier to start a business.
Once they’ve started, what does the future of doing business look like?
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MULTI-HYPHENATE BUSINESSES ARE ON THE RISE.
Head of Verticals and
Platform at Square
“For today’s businesses, diversifying their offerings is a key way of driving revenue and growing their brand. This is particularly true for restaurants, with more beginning to offer experiences like cooking classes, catering services or merchandise for sale. In an uncertain economy and an increasingly competitive business environment, businesses are realizing the importance of multiple revenue streams and need easy-to-use tools to help manage their growing offerings.”
Automation technologies can work to make employees’ jobs easier – taking time-consuming manual tasks off their plates and freeing up their time. Automation helps with staff retention and allows businesses to better focus on the customer experience, which is critical as many businesses grapple with staffing shortages.
Automation really helps the everyday operations, especially when we are training new employees. There are wholesale services online that I work with, where as soon as I purchase an item, the inventory comes in with photos. In the greenhouse, where we often will have new employees who do not know every plant, it has been our saviour in many circumstances just to be able to have our employees see the photograph of the plant and be able to recognize it in that way.”
Owner of Magpie & Thorn
Customers, it turns out, want businesses to take advantage of automation technology. A full 73% of consumers said they’d prefer automation over live staff members in at least one area of a business.
GM of Square for Retail
“In today’s competitive retail landscape, it’s become increasingly critical for businesses to implement technology that automates their back-end operations across channels, locations and staff. Besides supporting cost efficiencies, automated technology empowers retailers to focus on strategic decisions that can move the business forward.”
THE CONVERSATION WITH CUSTOMERS IS CHANGING.
Customers want to hear from businesses: a full 86% of consumers stated that they want to communicate with the businesses they frequent.
As they do, conversations are shifting from inboxes to social platforms. While most consumers (60%) still want to hear from businesses via email, 46% want to hear from them through a social media profile or in their direct messages.
Businesses are responding to the shifting communication expectations of consumers with new strategies. To appeal to a growing market of younger consumers, 43% of retailers already use or are planning a different marketing approach for Gen Z.
Social media platforms like TikTok and Instagram – which many younger consumers use as search engines – will be an essential part of those marketing and communication strategies as Gen Z’s spending share grows.
GM of Square for Retail
“Amid economic uncertainty and changing consumer preferences, the current macro landscape is giving retailers a hard reality check that it’s not enough for brands to be present in one place. Beyond a physical store and online presence, brands need to be seen and heard on social media platforms, where consumers can come to be inspired and to shop.”
Social media is now integral to businesses’ selling strategies. Already, the number of retailers selling goods directly through social channels in 2022 jumped 10% year over year from 2021 (91% compared to 81%, respectively) – demonstrating the fast-growing power of social commerce.
Social search is contributing to high rates of mobile shopping, too. 79% of consumers are making purchases directly from their mobile devices (including shopping apps, social media and online shopping sites) with an average of 22% of their total purchases being made while they scroll. Similarly, retailers are seeing 27% of revenue come from mobile sales.
Data Lead for Square Communications
“Businesses that offer quick checkout methods see more sales, more repeat buyers and lower abandoned cart rates. Customers are also more likely to complete a sale if they have the option to pay directly through a messaging app or autofill their card details with their mobile wallet. On the Square platform, mobile payments are up 117% this year, driven in part by growth in online and social media channels. As customers continue to expect their favourite businesses to show up on social media, it’s on those businesses to meet them where they are.”
YOUNGER GENERATIONS MAY FUEL BUSINESS GROWTH.
62% of consumers agree that the technology and tools available today mean it’s never been easier to start a business, and younger generations are the most optimistic. 77% of Gen Z consumers and 75% of millennials agree that starting a business is easier than ever, versus 63% of Gen X and 47% of baby boomers.
The first time I ever walked into a bank to ask about what kinds of loans they offered, an old white guy behind the counter put his hands on his hips and asked “Well, how old are you, anyway?” So, I turned around and walked out. It’s harder as a young woman to be taken seriously. In a bank situation, they can make it really intimidating, and it’s less “Hey, we want to help your business!” and more “Here’s how much money you’re going to owe us. We don’t think you can do that.”
Owner of Plant Goals
With the right tools available, consumers are ready to take entrepreneurial action: 65% have already turned a passion or hobby into a business or are planning, considering or interested in doing so. Gen Z and millennials, in particular, are the most open to starting a business right now (46%), citing the desire to be their own boss, turn hobbies into cash, do work they’re passionate about or have a more flexible schedule.
New technologies and methods of doing business are helping shepherd one of the oldest industries into a new era, allowing restaurateurs to respond to pressures like inflation and staffing shortages.
In fact, just 29% of restaurateurs said they are planning to raise prices to weather a potential recession in 2023, and another 70% of restaurateurs would not consider layoffs.
Instead, restaurateurs are expanding their offerings to meet consumers’ shopping needs while deploying automation technologies to become more agile in the back of the house, lending to a better and more engaging customer experience.
We ship merch all over the United States, oddly enough, mostly because people think it’s cool-looking, even if they’ve never been to the brewery. We keep that same ethos and we apply it to pretty much everything we make… T-shirts, hats, lighters, guitar picks… it’s actually a lot of fun.”
Co-owner of Ghost Town Brewing
Retailers are evolving their businesses to meet consumers’ expectations and redefine what shopping looks like – particularly with digital, mobile and social commerce.
By expanding sales channels, delivering enhanced experiences and embracing automation and technology, retailers are connecting with customers both in-store and out to grow their businesses and be present throughout the purchasing journey.
Square partnered with Wakefield Research to survey North American consumers, retail owners and restaurant owners to uncover insights for our 2023 Future of Commerce report.
The Square Consumer Survey was conducted by Wakefield Research among 2,000 nationally representative US and Canadian adults ages 18+. The Square Restaurant Survey was conducted by Wakefield Research among 500 US and 500 Canadian restaurant owners and managers. The Square Retail Survey was conducted by Wakefield Research among 500 retail owners and managers in the US and 500 retail owners and managers in Canada.
Surveys were conducted between November 9 and November 28, 2022, using an email invitation and an online survey. Data has been weighted.