Square Releases Second Annual Future of Commerce Report
Survey reveals that omnichannel operations continue to be top of mind for retail, restaurant, and beauty industries
Today, Square released its second annual “Future of Commerce” report that reveals how retailers, restaurateurs – and for the first time, beauty businesses – continue to evolve and adapt their business models through the pandemic and whatever comes next. Square developed its Future of Commerce report to provide a look inside what’s working, what’s not, and what businesses are doing to prepare for the year ahead.
To uncover these insights, Square collaborated with Wakefield Research to survey restaurateurs, retailers, beauty merchants, and consumers across the U.S. Additionally, Square sourced insights from businesses and industry experts to share how the business landscape is evolving, and how sellers can stay ahead of the curve.
“The future is full of opportunity for sellers of all types and sizes,” said Alyssa Henry, Executive Vice President, Square. “Commerce is constantly changing and we’re seeing that many of these changes are here to stay. Businesses that understand these shifts in consumer behavior can benefit by creating digital-first operations that prioritize the customer experience for enhanced brand loyalty and reputation.”
Restaurants have had a challenging year but are growing more optimistic. While 58% of restaurateurs are still concerned about the survival of their restaurant, that’s down from a staggering 92% last year. As a whole, restaurants are moving out of survival mode and into thinking about strategies to future-proof their businesses - for example, embracing omnichannel for the long-term.
- 69% of restaurants say they plan to offer online ordering even after COVID-19 subsides.
- Restaurants that offer online ordering say an average of 34% of their revenue currently comes from online channels.
- 49% of restaurants say they plan to offer first-party delivery even after COVID-19, while 62% say they plan to offer third-party delivery.
“The pandemic has validated our omnichannel strategy. It has validated everything. We went into this thinking that we wanted to be wherever our customers are,” said Mark Stutzman, CTO of Area15, an immersive arts, food, and entertainment venue in Las Vegas, Nevada. “Of course, that’s all of the social channels, and it’s search, it’s the web, it’s mobile - it’s giving them as many ways to transact within the venue as frictionlessly as possible.”
“We see the trend of dine-in-or takeout-only as largely over,” said Bryan Solar, Head of Restaurants at Square. “In the future, we expect restaurants’ physical footprints to evolve as they see an increase in the percentage of their revenue that comes from off-premise sales. Kitchen sizes could potentially take up more of the overall space and online ordering would become critical to a restaurant’s bottom line.”
It’s not just restaurants who are seeing an increased reliance on omnichannel strategy; retailers are also seeing that online selling has had an outsized impact on revenue and that meeting customers where they are is more important than ever.
- 47% of retailers now offer buy online, pick up in-store (BOPIS).
Retailers say an average of 58% of their revenue currently comes from online sales.
- Among retailers who sell on social media, the percentage of revenue that comes from each channel is as follows:
- Instagram: 32%
- Facebook: 31%
- Twitter: 31%
- TikTok: 30%
- More than 1/4 of retailers say that not knowing enough about technology options/platforms keeps them from selling goods through newer online or social channels.
- Less than 25% of retailers believe their customers wouldn’t be interested in buying goods on additional channels.
“During the pandemic consumers were pushed online, to the only channels available to them, which altered the balance of their time and attention preference to favor online more than ever. While updating your business to support more channels can seem difficult, automation tools like inventory management and smart stock alerts can help,” said Roshan Jhunja, Head of Retail at Square.
The beauty industry is no different as salons and personal care businesses turned to new channels and revenue streams to reach and stay connected to clients. Consumers continued to have a newfound appreciation for personal care professionals and the role they play in their lives, creating vast opportunities for businesses to improve and build their omnichannel operations.
- 30% of customers said they would avoid a salon with no website to view services.
- 55% of beauty businesses had automated technology for scheduling appointments prior to the pandemic, and 25% started using this technology after the pandemic started.
- 96% of beauty businesses say they sell retail products, which consumers are buying through a number of channels:
- 70% of consumers bought retail in-person, likely as an add-on to their personal care service
- 37% of customers purchased products through the website
- 30% purchased items from marketing emails
- 28% purchased items from social media sites
“The beauty industry has changed immensely, giving businesses the opportunity to look at their operations and find ways to operate smarter and more efficiently,” said Willem Ave, General Manager of Square Appointments. “By creating unique and personalized omnichannel experiences, businesses can sell products and services across a variety of channels to help grow their business.”
For a full analysis of the top restaurant, retail, and beauty trends of 2021, industry 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 restaurants and retail operations, versatile e-commerce tools, embedded financial services and banking products, an appointment booking platform, 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.squareup.com.