Today, mobile payment technology company Square released its annual Future of Commerce report outlining key consumer trends as well as the main strategies and solutions that businesses are adopting to attract and retain customers and stay resilient in a climate of economic uncertainty.
Between Nov. 15 and Nov. 28, 2022, Square surveyed, in collaboration with Wakefield Research, 2000 Canadian consumers, 500 retail owners or managers, and 500 restaurant owners or managers. The same number of U.S. respondents in each category were surveyed alongside.
Struggling retailers are targeting Gen Z consumers (Canadians born between 1997 and 2002), especially during times of macroeconomic challenges, including supply chain shortages, staffing concerns, and a looming recession. Rightfully so, as the report showed that 88 per cent of consumers, over half of whom are younger consumers, would be understanding if their favorite local businesses raised their prices, given the impact of inflation and the rising cost of goods. Younger consumers also tend to be more empathetic towards small, struggling businesses, as many look to jump into the entrepreneurial pool and are aware of the challenges.
Technology has been key to driving the entrepreneurial ambitions of young consumers, as more than three in five agree that, with the technology and tools available today, it’s never been easier to start a business.
Retailers are also embracing automation technologies to enhance customer and staff experience. A significant 73 per cent of consumers said they would prefer automation over live staff members in at least one area of a business, such as providing information about products or inventory (44 per cent), for ordering or checkout (38 per cent) and pickup or arranging delivery (41 per cent).
“In today’s competitive retail landscape, it’s become increasingly critical for businesses to implement technology that automates their back-end operations across channels, locations, and staff,” said Roshan Jhunja, general manager of Square for Retail. “Besides supporting cost efficiencies, automated technology empowers retailers to focus on strategic decisions that can move the business forward.”
Furthermore, establishing new channels for ecommerce and in-store customers are helping retailers grow, the report demonstrated. Over 80 per cent of Canadian retailers are considering more than five commerce channels in 2023. Options like Afterpay, as well as online sales through Facebook and Instagram, are now well established in Canada. Sales from social media in Canada are up 60 per cent from 2021.
Conversations with customers are also shifting to social media platforms. While 60 per cent of consumers still seek to communicate with the businesses they frequent by email, 46 per cent want to hear from them through a social media profile or in their direct messages.
“The current macro landscape is giving retailers a hard reality check that it’s not enough for brands to be present in one place. Beyond a physical store and online presence, brands need to be seen and heard on social media platforms, where consumers can come to be inspired and to shop,” stated Jhunja.
In-store Canadian retailers are not resisting technology either. Forty-three per cent either use or are planning to introduce QR codes in-store to provide customers with additional product information and promotions. Another 37 per cent of retailers are adding virtual reality (VR), augmented reality (AR), or interactive kiosks to stores, possibly to connect with the Gen Z demographic, the reports suggested.