This new year is a perfect time to begin shaping a long-term vision and identifying opportunities for growing your restaurant or food services business over the next ten years.
Marketing trends, mobile data insights show that Gen Z has a considerable appetite for restaurants, clean eating, fast-casual, and exciting twists on healthy dining options. And wow, does this young generation have some incredible spending power! According to a December 2019 report by commercial real estate giant CBRE using data from eMarketer, Generation Z’s spending is now at approximately $143 billion per year, with an additional influence over $450.5 billion in spending by others. That’s great news for bricks and mortar locations such as malls, which are transforming into a different kind of mixed-use developments incorporating a curated mix of dining, entertainment, and experiential businesses. A strong digital presence is a must to engage with these powerful young consumers to keep them coming back for more.
The sheer market size of Gen Z and their discretionary spending dollars should make restaurants and food services businesses sit up and take notice. Born between 1995-2012, they range from seven to 24 years of age. While they’re still relatively young, they represent an enormous number of potential and current customers for restaurants and other food services businesses. According to the National Retail Federation’s Consumer Fall Review 2019, parents interviewed about the influence of their Gen Z children reported they have substantial influence over household purchases. Eighty-eight percent said their Gen Z children influenced household food and drink purchases, and 87 percent influenced choice when dining out, whether with their parents or spending their own money. Here’s the kicker: Gen Z will make up 40 percent of all consumers by the end of 2020.
Now let’s take a deeper look at Gen Z behavior and how can your establishment best target this generation. As a mom and self-proclaimed foodie, I cook a lot, so I know that any successful recipe begins with quality ingredients. As a marketing professional, I know that consumer data should always be the primary ingredient. Insights are the seasoning. Mix these with authentic branded engagement and you have the basic recipe for Gen Z marketing. Here’s a twist though –– campaigns will need to be flavored just right for these customers. They’re our largest and first-ever native digital generation, and they have some very specific tastes and as previously noted, incredible influence and spending power. They learn, live, and socialize in this digital world, and they have strong feelings about brands and what they expect from them.
These brand expectations mean that reaching and marketing effectively to Gen Z is different from older prospects. Insights from Gen Z data and behavior show that marketing opportunities for this group are far more influencer-driven than Millennials. Overwhelmingly, both generations prefer to consume their media as small bites of video and mouth-watering pics, which makes paying attention to social media channels and careful message curation more important to restaurant brands than ever before. Here’s why that matters: the CBRE report I referenced earlier showed that Gen Z spends a great deal of time online making purchasing decisions, however, 81 percent of them prefer to go to physical store locations. And hungry teens love to eat.
As our first digital natives, rapid technology advances have been always been the Gen Z norm. They’re naturally eager adopters of emerging communication platforms. They’ll equally rapidly shift and change their preferences based on what they hear, see, and share in social media on established and emerging mobile-based platforms. Currently, their preferred channels include Instagram, SnapChat, YouTube, and TikTok. This generation is carving its own identity and beliefs, and they’re savvy consumers, so marketers need to go well past outside of the box and the iconic Taco Bell slogan, "Think outside of the bun."
Food-related brands are some of the most competitive and innovative social media accounts vying for Gen Z attention and their fast food dollars, and of course, they’re dominated by big brands that offer value at lower price points. They also provide a lot of entertaining and engaging content, especially when poking fun at their rivals. Wendy’s and Burger King are two masters in the genre, sparking lots of interest and engagement that’s helping to drive fast-food growth. However, McDonald’s still reigns number one among teens aged 13-17, while Chick-Fil-A is favored by 18-24-year-olds.
Research also shows that nine in ten young consumers prefer healthier options than just burgers. In response to healthier eating trends among Millennials and Gen Z, as well as environmental concerns, big burger chains tested options like new plant-based ‘beef burgers’ in some very successful 2019 trial runs. Premium, Instagrammable offerings are also popular with young consumers –– just check any Gen Z profile. Wendy’s used consumer data to partner with music platform Pandora to create and curate personalized playlists in its locations. Taking a step further into the digital world, convenient, app-based ordering puts brands directly on the phones and into the hands of their consumers. This means more data. More opportunities.
That’s all just the tip of a very big iceberg. Watch the trends, and adapt accordingly. Your first step should be to partner with a good marketing agency with a strong digital team. It’s more cost-effective for many companies than hiring, training, and deploying a fully-staffed internal marketing and digital department. In 2020, meet Gen Z where they live. Develop an authentic brand flavor that stands out in their social media stream. Remember, the right ingredients combined with a solid data-driven digital marketing plan can help make your restaurant or food services business irresistible to the Gen Z digital mindset. And teens will always be hungry.
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For more than a decade, restaurants and small businesses have tailored their marketing to focus on millennials. Now, with the oldest members of that generation about to hit 40, it’s time to wise up to the fact that your go-to marketing tools may not work with the next (and biggest) generation that is currently flooding into your restaurants en masse.
In 2018, Gen Z placed 552 million food service delivery orders. They are here in the marketplace, going to restaurants and ordering takeout, with the ability to spend up to $143 billion in the U.S. alone. In late 2019, we conducted a survey of nearly 500 Gen Zers and found that restaurants may need to rethink their approach to customer engagement because their tried-and-true millennial marketing tactics won’t work on Gen Z—and may even deter them.
According to our survey, three-quarters of those in the 15-24 age group have never written a review on Yelp. That doesn’t mean the platform is irrelevant; 67% said that, upon visiting a restaurant for the first time, they check its Yelp reviews. It’s part of their own research online and helps to inform them, but certainly is not their only source. But these numbers do indicate that Gen Z may be significantly less influenced by Yelp and online reviews than their predecessors.
When asked about how they search for full-service or fast-casual restaurants (which our study revealed to be the types of restaurants they prefer), nearly 40% of respondents said they are either "not at all likely" or "slightly likely" to use Yelp as a resource. For restaurants and small business owners whose livelihoods depend on online reviews, this may be a game-changer.
The biggest takeaway is that Gen Z doesn’t trust anything that smells even faintly inauthentic, which could account for why a staggering 64% of them say they would not post a Yelp review if offered a free item. At best, they’re deeply skeptical of corporate influence; at worst, they consider that form of marketing manipulative. They don’t want to be cajoled or bribed into putting up an inauthentic review just for a free dessert.
Our findings go back to the core of what I’ve been saying about Gen Z for years. They’re not so cynical that they can’t be reached at all through marketing; they absolutely can, and winning their trust is key to turning them into tireless brand advocates. But they are repulsed by inauthenticity. They don’t like to be tricked. They don’t want to be manipulated. They don’t want to engage around content that they view to be overly corporate.
The first step in creating a Gen Z-focused outreach plan requires an honest appraisal of your own establishment. Is your restaurant the type of place Gen Z would align themselves with? If you don’t know the answer to that question, the first thing you can do is conduct your own research. Are you providing the experience Gen Z wants? Are you aligned with their values for healthy, sustainable and local foods?
Assuming you’ve answered yes to those two questions, the next step is to convey your shared values through tried-and-true marketing tactics to attract them, such as targeted social advertising, local marketing, events and more. If Gen Zers are sufficiently convinced to take action and visit your restaurant, then the onus is on you to follow through and deliver an experience that is authentically aligned with your values. Because as we’ve established, it’s not that Gen Z dislikes marketing; it’s that they dislike inauthentic marketing.
If you find that maybe your restaurant isn’t particularly aligned with Gen Z, you are left with a choice. You can make sweeping changes to your business model, revamp your menu and retool your marketing messages to better convey your value proposition in order to authentically become a place the next generation will embrace, or you can choose to focus your marketing efforts on different age groups. However, our survey strongly indicates that you can’t have both. It’s one thing to not be aligned with Gen Z and their values, it’s entirely another to act like you are when you aren’t.
Most importantly, remember that Gen Z is a different type of consumer. Just because they are digital natives does not mean they engage in the same ways with businesses and brands as millennials do. Consumer behavior in day-to-day venues like restaurants is beginning to reveal the true generational divide between Gen Y and Gen Z.
The best way to welcome those millions of hungry 20-somethings into your restaurant is to be real with them. Put your marketing shenanigans on the shelf, and be your truest self.
Catch up on my current posts along with industry articles