Retailers and Restaurants Take Control of Their Future
Retailers and restaurants are taking control of their future by adapting to evolving consumer behaviors via technology use and operating efficiencies says a new study released from Square Inc.
Square’s “Future of Retail” and “Future of Restaurants” reports provide a glimpse into what investments businesses are making, what is working for them and what other businesses could take from the reports’ insights.
In collaboration with Wakefield Research, a marketing research firm, Square, a financial services and mobile payment company, surveyed 1,000 consumers, 500 restaurateurs, and 500 retailers across the country. Square also reached out to business and industry experts to learn how businesses will be tackling future challenges.
“Scrappiness is in our sellers’ DNA and, in 2021, we’re expecting more of the same,” stated Alyssa Henry, seller lead at Square.
“It will be more important than ever to find creative ways to meet consumers where they are most comfortable, providing memorable experiences in-store, online, curbside, and everywhere in between,” continued Henry.
One such story from the “Future of Retail” report highlights the e-commerce journey of Hot Sam’s, a family-owned men’s suit shop based in Detroit, Mich., that’s been in business since 1921.
Prior to the pandemic, Hot Sam’s didn’t have a website and stuck to its “old-school roots” as a physical retailer. However, with the onset of the pandemic, the shop was forced to adapt or risk closing its doors.
“We wanted a website; we got one in the middle of a pandemic because we had to,” explains Hot Sam’s business lead Lauren Stovall. “That is what resilience does. It forces you to do the things that are necessary in the face of pressure and in the face of fear and in the face of adversity.”
Thanks to the new website developed with Square, Hot Sam’s can showcase its inventory online and offer customers free shipping, curbside pickup, and online bookings for alterations.
“Being tech savvy, that’s one of the challenges of Hot Sam’s…[technology] is something that we had not really been using to our full potential,” says Stovall.
Hot Sam’s adaptability mirrors an overall trend in retailers increasingly turning to the web to connect with their customers.
According to Square’s study, 88% of retailers sell their commerce online. For retailers like Hot Sam’s with just one physical location, 66% of retail revenue is generated from online sales.
In addition to using websites, social media also provided a way for retailers to reach customers.
Square found that 84% of retailers who sell online either already utilize social media or plan to this year.
Of those retailers who already sell their goods online, 40% of their online revenue comes from social selling, signaling a growing trend that Square says will give small businesses a “leg up” against big box retailers.
“A social account from a local mom-and-pop retailer that posts about (and sells) what their community cares about builds more trust with these customers than a large retailer,” explains Square in its “Future of Retail” report.
“Some Square sellers are turning their Instagram feeds into end-to-end retail shopping experiences, and others are using the app to keep customers updated about what’s going on in-store and what merchandise is available,” commented Megan Karande, Square’s product marketing manager.
“Retail has changed rapidly over the last year,” said Square’s head of eCommerce, David Rusenko. “But the transformation is giving retailers a chance to slow down and invest in doing things smarter across both in-store and online channels. The changes aren’t a way to simply make it through – they’re permanent and redefining what a meaningful retail experience can look like.”
Restaurants are also shifting their focus, figuring out how to increase efficiency and profitability, and also how to best serve customers.
According to highlights of the “Future of Restaurants” report, 91% of restaurants have made, or plan to make, investments in kitchen automation technology in order to streamline operations this year.
Making changes to menu offerings will also aid in restaurants’ operation efficiency.
According to Square, 92% of restaurateurs said they are likely to make changes, with 47% saying they plan to cut items or change their menus altogether. While this move may seem risky at first, Square found that 41% of consumers said they would willingly embrace new menu offerings if given the opportunity.
At the same time, 88% of restaurants surveyed said they would consider forgoing their physical menus entirely and replacing them with digital menus for customers.
As part of their efforts to retain and satisfy customers during the COVID-19 pandemic, Square reports that restaurants will be meeting customers “wherever they are” via the new channels of customer outreach that have emerged over the past year.
According to the “Future of Restaurants” report, three in four restaurants plan on offering contactless ordering and payment options across all channels of their business (i.e. outdoor dining, third party delivery apps, curbside pick-up, restaurants’ website and social media pages), with 61% utilizing contactless payments on-premise.
Diving even further into channels used by restaurants, 62% of their 2021 business revenue will come from delivery and takeout, and 18% of restaurant owners and managers expect to be completely dependent on delivery and takeout in 2021.
For delivery in particular, Square found that 67% of consumers said they prefer to use a restaurant’s own website or app for food delivery.
“We’re seeing restaurants shift to a model that places more emphasis on the kitchen as the central hub of the operation,” said Bruce Bell, head of Square for Restaurants. “Restaurants are embracing new channels for customers to interact with their business, effectively meeting them wherever they are.”
Square’s reports on retailers and restaurants can be accessed online via their website for more in-depth analysis on future trends in these industries.
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