Retailers, restaurants look to grow, leverage technology in 2024

Despite increased costs and labor challenges, retailers and restaurateurs alike are looking to expand their businesses in 2024.

Growth is top of mind for retailers, according to payment solution Square’s fourth annual Future of Commerce report growth, with 61% saying they’re eager to expand in the coming year, though they are split on whether to prioritize brick-and-mortar (52%) or online offerings (48%). The report surveyed thousands of business owners and consumers in the U.S., Canada, the U.K. and Australia.

More than four-in-10 (42%) retailers surveyed said they planned to stay competitive this year by improving customer relationships through faster and easier communication channels. Thirty-nine percent said they planned on providing more payment options such as buy now, pay later, and 38% said they planned to offer more in-store events and shopping experiences, strengthen loyalty through a rewards program, and reach customers through a marketing program.

Over half (56%) of retailers said they would be taking a closer look at their marketing tactics for Gen Z in 2024 as the younger generations’ purchasing power continues to grow. This marks an increase from just 43% of retailers who focused on marketing to Gen Z in 2022.

“Whether retailers are focusing on in-store or online shopping, it’s more important than ever to maintain communication with your customers,” said Roshan Jhunja, general manager of Square for retail. “Retailers should be building rapport and staying connected with their customers through social media, email and text, and they should also be finding ways to create unique in-person experiences to bring folks into their stores.”

All (100%) of the restaurant owners surveyed by Square said they planned to expand in the coming year, regardless of restaurant type. To stay competitive, 39% said they will use more environmentally sustainable sourcing and operations, and another 39% said they will use data insights to better understand what customers what. Thirty-eight percent said they would reach and engage with customers through a marketing program, while providing quicker ordering options, offering contactless payments and adding automation to overcome staffing shortages all came in at 37%.

Technology will play a key role for both retail and restaurants in 2024, with 100% of retail and restaurant owners surveyed stating that automation and technology have improved their businesses. 

Nearly half (45%) of retailers have seen greater employee retention and increased profits as a result of their automation investments, while 67% of restaurant owners say that automation tools have directly benefited customers, either through customer experience or communication.

Customers say they support businesses continuing to explore ways to automate, with 76% of restaurant customers and 67% of retail customers preferring that businesses use automation over live staff in at least one area, especially for tasks like making reservations or checking product inventory.

“Automation and AI are going to be key growth levers for restaurants in the coming year, though not in the way you may think,” said Ming-Tai Huh, general manager of Square for restaurants. “The vast majority of restaurants will be integrating AI into their operations in small, iterative ways – not through flashy robots but through automation in marketing or kitchen workflows – and these minor changes will add up to saved time and more profit.”