Square report - 2024 a year of growth for UK businesses, with restaurant owners leading the way

Square has released its fourth annual Future of Commerce report, featuring analysis on how business owners and consumers are considering the evolution of the restaurant, retail, and beauty industries, offering insights on how these businesses are shifting – and how consumers are responding – with diversification and automation coming out as key trends to consider in 2024.

Square surveyed thousands of UK business owners and consumers, as well as gaining insights from the United States, Canada and Australia.

Samina Hussain-Letch - Executive Director, Square UK, says: “For UK businesses, the future is looking cautiously optimistic, with retailers and restaurateurs feeling positive about growth.”

“Square’s ecosystem supports businesses with their expansion – whether that means opening a new location, improving reservation systems or introducing new payment solutions – all while driving customer loyalty and engagement.”

Growth is top of mind for retailers, with business owners seeking solutions to reach shoppers online and in-person, to cater to how consumers choose to shop. UK shoppers are equally divided in their shopping habits, with nearly half (49%) opting for online shopping vs just over (51%) choosing in-store.

This presents a far more equal split than global shoppers, with just 37% of shoppers worldwide preferring online. Retailers need to keep up with consumer demand for online shopping, with 45% of UK purchases made online in December 2023.

Business owners are tapping into this demand, with 43% of retailers wanting to offer a more personalised digital shopping experience. 

Rich Bayer - UK Country Manager, Clearpay, says: “Shoppers prefer seamless journeys, whether they’re online or in-store, and when it comes to payments, they want choice and flexibility at the checkout to select the payment option that best suits them.”

“With buy now, pay later transactions expected to increase by around 11% per year in the next five years, reaching £44 billion by 2028, forward looking retailers should evaluate whether they are offering their customers an optimal selection of payment options.” 

Offering compelling in-store experiences for customers is key for retailers to drive in-store traffic and create a sense of community - 54% of shoppers are interested in trying in-store dining options like a café or wine bar, and 41% of global shoppers say that such offerings would make them spend more time browsing.

Convenience is king, with more than three in five in-store shoppers preferring contactless payment methods (compared to 48% globally). Appetite for traditional card payment is low, with just 23% of shoppers choosing this option. 

Decisively, most restaurateurs (89%) say they want to expand their businesses in the next year through offering new products or services, including classes, events, meal kits or retail items.

At the same time, Brits are planning to pull back on restaurant spending in 2024, with 43% of consumers predicting they’ll order less takeaways this year – meaning restaurateurs need to invest in more efficient ways to find and engage customers to see return on their investments.

Consumers are looking for a tech forward approach from eateries – and with  45% of restaurants offering online ordering, business owners need to invest here to inspire customers to order in.

Global diners welcome new technologies, with 76% positive on restaurants implementing automated systems if they are low on staff.

Having a robust, user-friendly reservation system in place encourages Brits to eat out - diners are far more likely to have their interest piqued in trying a new restaurant if reservations are accepted (39%), and almost half (45%) of consumers prefer to make bookings directly through a restaurant’s website. 

The report also includes findings on beauty, with loyalty playing a key role in choosing a beauty salon.

56% of global consumers always book with the same provider, and the report shows that a payment methods are an important factor in retaining loyal customers, with almost three quarters of customers (69%) preferring a contactless payment option.

Moreover, 90% of global consumers who frequently visit beauty salons agree that reminders are important, but 14% would select a phone call as a preference - so business owners should explore other options, such as text or email notifications.

63% would welcome automation in salons, barber shops and spas, offering a great opportunity for business owners to upgrade their tech stack.