Many restaurant operators have devoted considerable time and resources to ensuring that their businesses cater to the millennial demographic. However, an upcoming cadre of consumers known as Generation Z (individuals born in 1996 or later) will soon rival millennial’s influence on the industry — if they haven’t already. Here’s why restaurants need to turn attention to Gen Z.
Big Group, Big Money, Big Clout
The size and spending power of Generation Z, coupled with their love of dining out, makes it critical for restaurants to capture the attention of these consumers and keep them coming back. According to the U.S. Department of the Census, Generation Z comprises roughly 82 million Americans, many of whom are entering the workforce and pack a financial punch — whether by spending their own money or influencing their parents’ spending.
According to Technomic, 58 percent of Generation Z consumers love to dine out, especially to enjoy different types of foods they don’t normally have at home. In fact, Generation Z spends more money on dining out than on clothing or music. A recent study by investment bank and asset management firm Piper Jaffray found that more than 20 percent of Generation Z consumers’ budget goes toward food.
No Wait, Please
Generation Z consumers hate to wait. So for restaurants, building loyalty among Generation Z customers will mean making it easy to skip the lines altogether and get food fast. Given that members of Generation Z are usually never without a phone in hand, consider enabling mobile ordering so they can order ahead and not have to wait when they arrive at your restaurant.
Generation Z’s lack of patience and need for speed also makes limited-service and fast-casual their preferred restaurant formats; they are nearly 50 percent more likely to choose a limited-service or fast-casual restaurant than a full-service establishment, according to a Piper Jaffray study.
Wanted: Connections and More Connections
While Generation Z prefers not to spend time waiting, they do crave positive emotional connections with the establishments they frequent. The closer the emotional ties between a restaurant and its Generation Z customers, the stronger the bonds of loyalty will be.
Restaurant operators must create a relationship-building environment to ensure this degree of long-term customer engagement. To get the job done, deploy a restaurant technology platform that allows close contact and two-way interaction with Generation Z customers via social media. Additionally, implement solutions that let you engage customers by sending coupons, as well as text messages and emails with updates about your restaurant and information about special targeted offers.
Not Local, No Problem
Like many millennials, Generation Z consumers are cost-conscious and want very reasonably priced dining options. However, they don’t share millennials’ concern about where their food comes from. The importance of locally sourced and authentic ingredients, unprocessed food, and getting protein from grass-fed animals is of little or no consequence to them — especially as many still live at home and rely on other family members to ensure that they are eating properly.
A new generation coming of age will mean your restaurant will have to adapt to provide the service and dining experiences they are looking for. Start building the bridge to their loyalty now, and reap big rewards.