The latest edition of Square’s annual Future of Commerce report, prepared in collaboration with Wakefield Research, highlights a positive outlook for Australia’s restaurant and retail industries.
“For businesses, the future is looking cautiously optimistic, and business owners say they’re looking to grow despite diverging consumer economic sentiment,” Matthew O’Connor, Head of Verticals and Platform at Square, said.
Around 90 per cent of surveyed restaurateurs in Australia say they plan to expand their businesses in the next 12 months by offering new products or opening additional locations, and 80 per cent report feeling more optimistic about the future of their restaurants.
The report emphasised that restaurateurs need to invest in more efficient ways to find and engage customers in order to get a return on their investments as 49 per cent of consumers predict that they’ll order less food delivery in 2024, especially Gen Z and Millennial customers.
Diners are looking for a tech-forward approach from eaterie, with 61 per cent of consumers globally are supportive of local restaurants using AI-based tools, while more than a quarter of Aussies would prefer to place their orders via self-serve kiosks.
Restaurateurs are investing in AI to and other technologies to address staffing challenges, with 54 per cent of restaurant owners planning to increase their spending on technology and automation tools in the next 12 months. This is a sensible approach, based on the fact that 76 per cent of consumers want restaurants to invest in at least one area of automation when they’re not at full staffing capacity.
As restaurant owners look to expand, 77 per cent of those surveyed say they’ll experiment in the coming year with non-core offerings such as meal kits, subscriptions and events. Restaurateurs say that 19 per cent of their revenue already stems from products and services outside their core restaurant offerings.
“Automation and AI are going to be key growth levers for restaurants in the coming year, though not in the way you may think,” Ming-Tai Huh, General Manager of Square for Restaurants, said. “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.”
Growth is also on the mind of retailers, with 57 per cent saying they’re eager to expand in the coming year – though they are split on whether to prioritise brick-and-mortar (51 per cent) or online offerings (49 per cent). With 63 per cent of consumers typically shopping in-store and 37 per cent online, the research emphasised that keeping in touch with customers via digital channels is key no matter where or how they choose to shop.
The report noted that consumers are most likely to try offerings like in-person loyalty programs (61 per cent), in-store dining options like a coffee or wine bar (48 per cent), and interactive displays, kiosks, or activities (29 per cent).
AI-powered product recommendations are the top priority tool for retailers of all sizes to implement, especially for those planning to add more online options over the next year (42 per cent).
Retailers are also seen to be offering more choice and flexibility to reach new and existing customers, from implementing faster and easier communication channels with customers (42 per cent) to providing Buy Now, Pay Later options like Afterpay (39 per cent).
“Whether retailers are focusing on in-store or online shopping, it’s more important than ever to maintain communication with your customers,” Roshan Jhunja, General Manager of Square for Retail, said. “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.”
This article was first published on sibling website Inside Small Business.