TORONTO — Square has released its fifth-annual Future of Commerce Report, providing a look at the restaurant, retail and beauty industries across the U.S., Canada, U.K. and Australia.
The research found that businesses worldwide – particularly restaurants – intend to turn to innovative, tailored technology in 2025, as they face the triple challenge of sustained high inflation, shrinking consumer wallets and the need to raise prices across the board. These tech solutions will be focused on increasing their efficiency while also deepening their customer relationships.
As Canadian businesses seek routes to greater efficiency, Square’s research shows that 89 per cent of restaurant leaders plan to invest in technology to help improve their companies this year. More than three-quarters of them (79 per cent) are spending more time on business operations compared to a year ago as costs rise and industry challenges continue. Two-thirds of restaurant leaders believe AI or automation will improve their business in each of the 15 areas we asked about, the most popular of which are marketing and promotions (80 per cent), inventory management (81 per cent), payments (80 per cent), menu optimization (81 per cent), and vendor management (81 per cent).
While introducing automation is a key focus for Canadian operators, so is connecting with the consumer – more than seven in 10 restaurant leaders (72 per cent) are planning to increase investment in their loyalty or reward programs to keep customers close over the next 12 months. This reflects the positive impact loyalty programs have on driving revenue, with 83 per cent of restaurant leaders saying their loyalty program successfully drives up order or basket size, as well as repeat visits (82 per cent) and return on investment (79 per cent). A further 75 per cent of them are planning to experiment in 2025 with new services and non-core offerings, such as in-store events, subscriptions, memberships and merchandise.
These developments come at a time when businesses are fighting for a share of consumers’ wallets – most consumers (62 per cent) said they’re cutting back on restaurant spending. As they grapple with rising costs across their supply chain, 69 per cent of Canadian restaurants plan to increase prices this year. Yet despite these challenges, businesses are feeling positive, with 77 per cent of restaurant leaders saying they’re more optimistic about their business than a year ago. More than two-thirds (71 per cent) say they plan to increase their number of locations in 2025 and 75 per cent plan to expand their menu offering.
“In 2025, restaurants are walking the fine line between automation and hospitality,” says Ming-Tai Huh, head of Food & Beverage at Square. “As businesses continue to face economic pressures, we’re seeing them invest in growth and experimentation as they find new, streamlined ways to work and deliver exceptional customer service – particularly through using time-saving and experience-enhancing technology.”
