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?
Table of Contents
01
MULTI-HYPHENATE BUSINESSES ARE ON THE RISE.
Matthew O’Connor,
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.”
Being defined by a single vertical or industry is no longer required as businesses extend into products, services and experiences long viewed as the domain of others.
As the line between retail and restaurants blurs, nearly two in three restaurateurs (65%) view non-core offerings as necessary to diversify revenue and grow their brand. Already, non-core offerings make up a significant chunk of restaurants’ revenue.
Consumers are on board with multi-hyphenate business trends. Nearly three in five (57%) have purchased retail items at a local restaurant in the past year, and more than two in five (41%) have purchased other non-core items like premade frozen meals, meal or cocktail kits or an online cooking class.
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What makes our restaurant special is not just the food, it’s the experience in itself. So how can we bring that into people’s homes and make them feel the cantina feeling elsewhere? It has to do with the little sauces, it has to do with the little pickles, it has to do with a certain graphic identity – to be able to offer all those packaged products online is awesome.”
Isabella Bertorelli,
Co-owner of Yo También Cantina
TAKEAWAY
As businesses expand into new product offerings and diversify revenue streams, tools to grow matter. Square offers an ecosystem of hardware that scales with you – whether that’s into a new experience or a new industry.
02
AUTOMATION IS ENHANCING CUSTOMER AND STAFF EXPERIENCE.
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.
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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.”
Maggie Adams,
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.
Roshan Jhunja,
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.”
DID YOU KNOW?
Square solutions offer automation to support your business in many ways – from inventory syncing that streamlines orders to team management software that empowers your staff.
03
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.
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Now, the customer – directly through their text message or email, or whatever they prefer – can directly message the shop. You can have a conversation between the artist, the piercer, the hairdresser and the client directly. So, that open communication definitely builds on that client relationship, for sure.”
Rudy Temiz,
Co-Owner of Live by the Sword
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.
Roshan Jhunja,
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.”
PRO TIP
Stay connected with your customers where it counts. Send personalized, automated email campaigns with Square Marketing or connect with customers in real time through Square Messages, all managed from one place.
04
SOCIAL AND MOBILE COMMERCE CONTINUE TO GROW.
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.
Ara Kharazian,
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.”
PRO TIP
Meet customers where they’re already shopping by using the Square Online mobile interface to make your store mobile friendly.
05
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.
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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.”
Désirée Kretschmar,
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.
TAKEAWAY
Many factors impact starting a new business, but the right tools and technology can help. Square offers a broad set of flexible tools that make it easier to get your business up and running – whether that business is a brick-and-mortar location, an online store or both.
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.
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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.”
Ryan Nosek,
Co-owner of Ghost Town Brewing
Access the full Future of Restaurants Report
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.
Access the full Future of Retail Report
Interested in learning more? Join our live event on February 28, 2023 as we host leading experts to discuss the future of commerce.
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.
