The struggle to increase in-house traffic continues to be complex in the restaurant world. Research from The NPD Group, however, suggests Generation Z may be the key to growth as other generations cut back from dining ventures. In fact, their vice president food industry analyst David Portalatin claims, “They are more important to the foodservice industry than other users.” Noting their affinity for fast-casual restaurants, Poralatin says that people in this generation “are using restaurants at a rate that previous generations did not.”
Gen Z consists of people who were born around 1995—2012, making the oldest of them 23 this year. They’re described as “tech-savvy” and “socially conscious,” and somewhat of a mystery that the foodservice industry is just starting to uncover. Much like marketing to Millennials, this generation will have its own set of wants and needs that must be catered to by forward-thinking restaurateurs looking to stay relevant and continue growing.
Today we take a look at a few useful findings about this group to better understand and develop strategies for captivating this next generation of consumers.
1. Mobile and Modern
I’m sure you saw this one coming as soon as you read the title, but how can we talk about a generation that’s always had access to the internet without talking about technology? For them, tech is less of a novelty and more of an expectation.
NPD found that Gen Z was a driving force of restaurant app and delivery sales in the year ending December 2018. Though only a portion of them are old enough to order for themselves, “foodservice delivery orders by Gen Zs amounted to 552 million, just a million shy of Millennials’ delivery orders.” This makes it incredibly important to develop a modern social media strategy that’s authentic and engaging for them.
But they’re not only ordering online. The NPD Group also found that “Gen Zs made 14.6 billion restaurant visits in 2018 and now represent 25 percent of total foodservice traffic.”
As far as the in-house experience goes, restaurants need to be modernized from the menu to the venue. Gen Z is food conscious, concerning themselves with portion size, environmental impact, and nutrition content. Therefore, the ability to customize their meal as much as possible is seen as incredibly valuable. As well, the more in-house entertainment provided—such as games, videos, and music selection—the more they’ll be attracted to frequenting your business.
Their nightlife is less of a classic bar-outing and more of a one-stop-shop where they can find food, drinks, and entertainment in a single location. The rise of concepts like Dave & Busters and Punch Bowl Social is largely attributed to both Gen Z and Millennial’s affinity for Eatertainment venues.
2. Tactile, “high-touch” experiences
Here’s where it starts to get really interesting, though. For as much as technology surrounds the lives of Gen Z, more and more writers, analysts, and observers are discussing the increasing popularity of hands-on, tangible materials and experiences. Think of how popular fidget spinners were in 2017, why Christmas cards still sell, or how knitting has become more prominent with this young generation.
This is good news in the foodservice industry, as it’s one of the few true human to human businesses around. For every burger-flipping, drink-serving robot that threatens bar and restaurant jobs, we can take some comfort in knowing that real connections are still incredibly important to guest experience.
Nancy Kruse of Nation’s Restaurant News posits that “a familiar, hands-on connection between buyer and seller in reaction to encroaching digitization” could very well be “the driving force behind the continued growth of fast-casual operations.” The more we can focus on these kinds of bonds and this kind of real guest service, the better it will be for business.
NPD’s David Portalatin also notes that “[t]his is group that has so much information in the palm of their hand that they’ve developed a keen sensor for B.S.” He refers to them as “skeptical, pragmatic — a little more, ‘Prove it to me’.” They want to know where their food is coming from, what impact it has environmentally, and if the brand can back up their claims surrounding it.
It’s a very “put your money where your mouth is” approach—but with this much buying power being established in Gen Z, that mouth-money can be a very wise investment. Those who do develop an air of authenticity can easily develop brand loyalty within their young guests and create regulars out of first-time visitors.
Venues that are unique and tell their story have an advantage in this effort. As Bret Thorn points out in Nation’s Restaurant News, “Millennials are about the selfie; Gen Z is about the story.” So, if your brand makes a stand on an issue, or has overcome incredible odds in order to do business, telling that brand story in interesting ways adds an incredible allure for young people.
While there’s still much to be learned and some time before they’re all of age, forward thinking about Generation Z is certainly valuable. We still need to be as careful as we can about generalizations, of course. I like how Ryan Jenkins of Inc. put it, “Generations are clues, not absolutes.”
I believe the three clues we examined today, however, are a great starting point. Focusing on convenient, modern operations and environments helps attract and maintain a youthful patronage. Allowing for traditional human connections and highly tactile experiences gives them something familiar to hold onto. And being authentic in every touchpoint of your brand develops trust, which translates to guest loyalty and more recurring visits.