Millennial customers may be getting all the attention from restaurants right now, but Gen Z—those 21 years of age and younger—are quickly emerging as a formidable group of consumers, Chicago researcher Technomic reported at last week’s Restaurant Leadership Conference. To meet Gen Z’s needs, it’s important to recognize the differences between them and the slightly older millennials. Among Technomic’s findings, the first four of seven big takeaways we brought home from the conference:
1. Gen Z is huge
It makes up 47 percent of the population, while millennials come in at 41 percent. These younger customers will be gradually trickling into the workforce over the next decade in larger numbers than the previous generation.
2. More socially minded
Among millennials, diversity is recognized, but diversity is expected by Gen Z.
3. More tech-reliant than the mobile-phone generation
While millennials balance in-person and online interactions, Gen Z favors heavy online use.
4. ‘I’ll feed myself. You do everything else.’
Millennials are big on takeout and delivery, but for Gen Z, delivery is essential—most of that demographic group can’t yet drive.
5. Don’t forget your core customer
Don’t alienate loyal guests while you’re trying to get those millennials in the door, advised Greg Cyrier, a 43-unit Chili’s franchisee. Emil Brolick, CEO of Wendy’s, was of similar mind, saying “millennials are important to quick-service restaurants, but baby boomers are still the largest part of the business. You have to create a brand-relevant experience for both groups.” Technology to engage younger guests, healthy menu options for their parents—that’s one of Brolick’s strategies.
6. Hispanics by the numbers
Over the next 10 years, the Hispanic 18-49 population will grow 22% and 18-34-year-olds will grow 20%; non-Hispanic 18-49 year olds will only grow 1.9% and 18-34-year-olds will decline over the same time period (-.5%), according to Univision. By 2025, there will be an additional 6 million Hispanic 18-49-year-olds added to the population vs. 2.1 million non-Hispanics. Over the same time period, Hispanics will add 3.2 million 18-34-year-olds to the population, while the non-Hispanic population will decline. Pete Filiaci, VP in Univision’s Strategy and Insights Group, told attendees “Hispanics will increasingly be your customers and your employees.” Hispanic consumers use restaurants differently, he added. “They tend to have larger families, and 40 percent of the time their restaurant visits are with kids,” said Filiaci. “Plus three out of four times they are visiting a major chain restaurant.” To attract these customers, more brands are marketing to Hispanics in the Spanish language.
7. Changing consumer demands
Food and service were the differentiators that drove restaurant traffic when Cyrier first became a franchisee of Chili’s 30 years ago. Today, it’s more about convenience, he said. Cyrier leverages technology to provide that convenience, offering guests the opportunity to put their name on a waiting list through a mobile app. “It’s particularly effective at the host stand,” he says. “Once in the restaurant, it gives guests the perception that the host is in control.”