Annual Square Report Underlines Businesses’ Optimism Amid Economic Uncertainty
Survey reveals that revenue diversification and tech automation are top of mind for retailers, restaurants
- 33% of retailers in the United States are creating entirely separate market approaches to attract Generation Z consumers.
- 87% of restaurants plan to expand non-core offerings like retail goods and cooking classes in order to diversify revenue and grow their brands.
- When it comes to sales channels, more is better – 77% of retailers plan to expand the number of digital channels they use in 2023.
Today, Square released its third annual Future of Commerce report, a comprehensive analysis of business owners’ and consumers’ attitudes on the evolution of retail and restaurants. The report examines how these businesses are shifting as they consider what’s worked, what hasn’t, and how to prepare for the future.
In collaboration with Wakefield Research, Square’s survey sourced data from retailers, restaurateurs, and consumers across the United States and Canada. The report also includes insights and analysis from both business owners and industry experts on how businesses are staying ahead of the curve amid inflation and concerns about the economy.
“Sellers are optimistic for the future, but also taking action to improve sales channels and technology for consumers in 2023,” said Alyssa Henry, Head of Square. “At Square, we know it’s critical for sellers to diversify their revenue streams and expand their offerings, and with our ecosystem, sellers have been able to evolve and thrive.”
After overcoming the hurdles presented by the pandemic, restaurants are now facing new uncertainty amid increasing competition and consumer expectations. 97% of restaurateurs reported planning to take measures to weather a potential recession in 2023, including adopting automation to allow workers to focus on more meaningful tasks and expanding business offerings to include merchandise or meal kits.
- With growing inflation and economic uncertainty ahead, 31% of restaurateurs are considering raising prices. Consumers are understanding, to a point – on average, they’re willing to tolerate up to a 21% price increase at their restaurants of choice.
- 20% of restaurants’ revenue is currently coming from products and services outside of their core restaurant offerings.
- 37% of restaurants are planning on automating operational activities to maximize staff efficiencies and 71% of consumers said they prefer automation over live staff in at least one aspect of their experience at their favorite eateries.
“Faced with competition and an uncertain economic landscape, the restaurant industry is still feeling the need to adapt and innovate,” said Lisa Fong, Head of Product, Restaurants at Square. “Restaurant owners are hoping to do more with less without compromising on providing exceptional food and service to customers by investing in ways to automate the busy work of their businesses.”
Retailers, too, are investing in diversifying their revenue streams and expanding into new channels – particularly as they aim to capture more Gen Z shoppers. With the younger generation’s purchasing power on the rise, retailers are shifting their omnichannel and marketing strategies while adopting more tech-forward solutions like “Buy Now, Pay Later” (BNPL) and automation.
- 24% of consumers refuse to shop from brands who don’t have an online presence.
- 31% of retailers believe they’ll need to provide more payment options like BNPL to compete in today’s retail marketplace and 24% of retailers will offer the technology to enhance the in-store shopping experience.
- 76% of consumers said they’d prefer retailers to use automation technology instead of relying on on-site staff in at least one area and 91% of retailers use or plan to use back-end and customer support automation to decrease staff members’ hands-on time.
“As retailers look ahead to this year, they’re taking a much more bullish approach to expansion and innovation,” said Roshan Jhunja, Head of Retail at Square. “Whether it’s offering more products and services, or investing in automation to allow for greater convenience, businesses as well as consumers will both reap the benefits.”
For a full analysis of the top restaurant and retail trends for 2023, industry data and insights from Square experts, and real-life examples from innovative Square sellers, download the report here or reach out to [email protected]
Square helps sellers more easily run and grow their businesses 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 and banking products, 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. Square is part of Block, Inc. (NYSE: SQ), a global technology company with a focus on financial services. For more information, visit www.squareup.com.
The consumer survey was conducted by Wakefield Research among 2,000 nationally representative Canadian and U.S. adults ages 18+ between November 15 and November 28, 2022, using an email invitation and an online survey.
The retail survey was conducted by Wakefield Research among 500 Canadian and 500 U.S. Retail Owners & Managers between November 15 and November 28, 2022, using an email invitation and an online survey.
The restaurant survey was conducted by Wakefield Research among 500 Canadian and 500 U.S. restaurant owners and managers, between November 15 and November 28, 2022, using an email invitation and an online survey.