Square has made its name as a mobile payment start-up but its future lies in providing merchants with a full suite of tools to make their businesses run. The fast-growing company is working to fill out its menu of services and today it’s revealing new loyalty, inventory, analytics and discovery tools for Square Register and Pay with Square, helping Square appeal to a wider number of merchants.
The big news will be Square’s loyalty and rewards system, which allows merchants to create digital punch cards for users, rewarding them for their first visit and continued patronage. Square Register, Square’s iPad business app, had a very simple reward system before, but it involved informing a business owner how much a user had purchased, giving them the option of choosing when to surprise their customer with a loyalty gift. Now, users will be able to get a punch card in their Pay with Square mobile app for each participating merchant and can chart their progress toward their next reward. Merchants can get users in the door by providing a percentage discount or a free item with their first purchase. And for regular customers, they can reward a set number of visits or total spend.
Square Register merchants will be able to get better analytics on sales, with item level reporting broken down by hours and time of day or week. Businesses can also see how sales are doing by employee shift. Inventory management features also been improved, enabling merchants to easily create categories of items, making it easier to handle greater quantities of products. Square also offers easier discounting of products, so merchants can set a percentage or dollar discount on any item. The Pay with Square app has also gotten a redesign to better highlight local merchants and make it easier for customers to discover businesses that take Square.
Keith Rabois, Square COO, told me in an interview that the new tools are part of Square’s larger vision to build out its services, which it plans to do all in-house. He said the goal is to build a seamless set of services that don’t require a lot of training or manuals for merchants to make them work. That echoes a recent interview I had with Rabois, who said that Square is working on improving its business tools for merchants.
“We want to solve problems that are universal and we’re reviving commerce from a payer and merchant perspective,” Rabois said. “Our vision is to fill out the entire package and it just works out of the box. All of you’re entire business needs are filled by Square: payments, analytics, loyalty, all of that inventory management we do for you so you don’t have to think about it.”
The new improvements are a logical and necessary step for Square, which has grown to serve 2 million businesses and individuals, and is now processing $6 billion on an annualized basis. Most of Square’s users are very small merchants, some of whom are just happy to have a way to accept credit cards. There’s still going to be a lot of growth in that market, but to really start making more money and expanding its reach, Square needs to have a full array of tools that can bring in bigger businesses. That’s where other competitors are trying to compete with Square, by offering more robust services that can meet the needs of merchants with bigger inventory, more locations or more complex business needs.
The loyalty system makes a lot of sense for Square and it puts it into competition with a bunch of other dedicated loyalty start-ups such as Belly, Cardify, Mirth, LocalBonus, Mirth and others. And it helps it keep pace with bigger local commerce competitors such as Groupon, LevelUp, PayPal Here, Foursquare and others, who are building out their suite of services to include payments, loyalty, deals and discovery.
As I wrote before, I think a number of these applications will converge as they try to become a one-stop shop for merchants. Competitors will eventually have to offer a whole list of services, providing deals for demand generation, loyalty for continued engagement, analytics and inventory and payments to close the loop and track spending. Square still faces a number of challenges as it moves up market and tries to convince bigger merchants it can get the job done for them. But it’s increasingly building out its payment tool to become a more versatile resource for merchants.