Consumers are changing—and fast. That was the sentiment presented at the Restaurant Directions conference, held last week in Nashville. In fact, one main-stage presentation kicked off with a quote from futurist Gerd Leonhard: “Humanity will change more in the next 20 years than in the previous 300 years.”
The consumer need state is shifting to one that demands both convenience and a connection with brands, so forward-thinking operators are exploring these evolving wants as they shape their concepts to compete in the future. Here’s a look at some of the specific consumer shifts to keep in mind.
1. Change in family dynamics
There’s no longer a set definition of family, said Sara Monnette, VP of innovation with Technomic. While many millennials are putting off milestones, 80% of millennials will be parents by 2026. At this point, about 70% of millennial mothers are working and, said Monnette, working families have an enhanced need for convenience. “This type of consumer is growing, and leading the charge,” she said. Nine in 10 millennial parents order food from restaurants once a week or more, and operators need to be prepared to cater to that consumer set, whether it’s offering family meals to go, catering to a range of dietary needs or training servers to recognize situations such as not putting hot plates or glasses of wine in front of young kids.
2. Omnichannel options
Consumers today have so many different choices to feed themselves outside of traditional at-home cooking, said Kelly Weikel, Technomic’s director of consumer insights. In addition to restaurants, the consideration set includes grocery stores, convenience stores, vending, food halls, kiosks, meal kits and more. Because there are so many choices, consumers are spreading out their spending, said Weikel. Sixty-three percent of consumers are spending the same amount on foodservice—they are just visiting a wider variety of foodservice options. While demographics are changing—people are working longer and living longer, and looking for “different” options—convenience is the No. 1 driver dictating consumers’ dining choices, said Weikel. They are looking for seamless, fast and flexible options.
3. Off-premise proliferation
More consumer dining occasions will happen outside of the brand or restaurant, said Monnette. The on-demand mentality means drive-thru, grab-and-go, catering, delivery, takeout and ghost restaurants will continue to grow as convenience needs proliferate and evolve. The technology, too, will continue to inform developments in off-premise, often optimizing the commute to and from work for many. Right now, mobile ordering is growing to be an expectation, though even more seamless technologies such as Amazon Go’s expanding frictionless service are becoming slightly more widespread (Amazon Go is opening its second and third locations in Chicago and San Francisco this year). “New service options will impact consumers’ expectations everywhere,” said Monnette. “They won’t stop using restaurants; they just might not want to sit in them.”
Third-party delivery, specifically, has been on a steep acceptance curve. Between January and April 2018, sales from the top four companies tracked by Technomic’s Transaction Insights—Grubhub Seamless, DoorDash, Postmates and Uber Eats—brought in $2.2 billion. And third-party is growing fast—59.6%, said Monnette— with high retention rates, too.
4. Rising demands
Many dining occasions may be happening outside of the restaurant, but consumers still have high in-store expectations, said Weikel. Two-thirds of consumers agree that restaurants are a form of entertainment, and that expectation will only continue to accelerate, she said. Operators need to be able to uniquely meet their customers with a brand story and brand positioning.
A big part of that positioning is the way brands promote health and uniqueness on the menu. Diners have evolved from a state of avoidance (fat, calories, etc.) to the current state of clean eating, and are looking for organic and unprocessed options. They are moving toward a state of real, said Weikel. They are looking for foods and ingredients they can pronounce, as well as functional foods that don’t just taste good, but also do good for the body.
5. Need for connections
Operators need to understand their brand’s personality through the eyes of their consumers, said Monnette. Consumers have so many dining options today, and they gravitate toward brands they have a clear emotional connection with. Some areas where relationships are forged: social responsibility, sustainability, privacy, engagement and advocacy, and food safety. “Trust keeps consumers coming back,” she said.
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