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Can Square tackle big retail?

Today, the payment company unveiled Square Retail, a product that provides inventory control and employee management to multi-store businesses with hundreds of thousands of products for $60 a month per device. Square has been slowly ramping up its ambitions, designing software for retailers bigger than your local coffeeshop, but it remains to be seen what that expansion means for their bottom line.

“We feel pretty good about their ability to continue to take market share,” says Jason Deleeuw, CFA and senior research analyst at Piper Jaffray. What they’re less confident in is its ability to become GAAP profitable. “They have a nice attractive suite of offerings to SMBs, but it comes at a cost,” he says. Product development represents the bulk of Square’s operating expenses. Square Retail could be a good source of additional revenue if it can attract enough larger retailers. But unlike the small business space, there’s a lot of competition to serve big merchants. 

One interesting tidbit from today’s release is that Square Retail will allow merchants to have customer profiles. Sales associates will be able to pull up customers’ past purchases and any notes left by other store attendants. This kind of product innovation could prove sticky with retailers that want to provide a more tailored experience. RR