Small businesses are gearing up for a potential resurgence in 2024, with Square’s latest Future of Commerce report signalling a renewed focus on growth, technology adoption, and innovative strategies.
While consumers are presenting a slightly more cautious outlook due to financial uncertainty, businesses across the retail and hospitality sectors are anticipating better times ahead.
Square’s research reveals that 80 per cent of consumers are open to trying new offerings from businesses known for something else. Meanwhile, 86 per cent are willing to participate in specific perks, activities, or events offered by a business, indicating growth opportunities for many retailers.
With AI the word on everyone’s lips, it should come as no surprise that in 2024, customers expect businesses to incorporate technology. The report suggests many may even prioritise spending at businesses that leverage AI or automation to enhance their overall experiences.
Automation wins over retailers and restauranteurs
The love for AI swings both ways, with automation and technology receiving overwhelmingly positive feedback from business owners. 100 per cent of retail and restaurant owners report improvements in their operations. Retailers who invested in automation experienced greater employee retention and increased profits (45 per cent), while restaurant owners (67 per cent) credit automation tools for benefiting customers through enhanced experiences and communication.
At times, an AI option is also preferred by customers. Square found consumers are in support of businesses exploring automation, with 76 per cent of restaurant customers and 67 per cent of retail customers expressing a preference for automation over live staff in at least one area. Tasks such as making reservations or checking product inventory are areas where customers believe automation can streamline processes.
A multi-pronged approach to success
As the commerce landscape continues to evolve, small businesses are adopting multi-hyphenate strategies, including diversifying revenue streams and adding non-core offerings to their business to increase income. The report notes that 77 per cent of restaurants plan to expand by introducing non-core offerings like meal kits, subscriptions, events, or merchandise. Meanwhile, 99 per cent of retailers intend to invest in additional revenue streams, such as in-store events or advertising, to keep pace with industry trends.
Ara Kharazian, Square Research Lead, says multi-hyphenate strategies can effectively increase business revenue.
“They can de-risk the business by growing recurring revenue that’s less susceptible to volatile consumer trends and give businesses a way to make inroads with their highest-spending customers.”
Restaurant industry driving growth
Square’s report identifies the restaurant industry as a strong global driver in 2024, with 100 per cent of restaurant owners surveyed planning expansion. To stay competitive, restaurateurs focus on environmentally sustainable practices, leveraging data and implementing loyalty programs to better understand customer needs and preferences.
Retailers eye Gen Z as a key market
Retailers, anticipating a complex marketplace, are intensifying their efforts to improve customer relationships and offer unique offerings. Over half (56 per cent) of retailers will refine their marketing tactics for Gen Z, recognising the growing purchasing power of younger generations.
As small businesses embrace technology, automation, and innovative strategies, 2024 holds promise as a year of growth and resilience in the face of economic challenges.
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