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Consumer Trends

Want to know where restaurants are headed? Follow Gen Z

The younger generation is far more likely to use modern innovations like alcohol delivery and digital ordering. Their habits point the way to future growth.
Gen Z diners
More than half of Gen Zers say they'd prefer to order with their phones at a restaurant. / Photograph: Shutterstock

A restaurant considering replacing its paper menus with QR codes, launching alcohol delivery or using a robot to make pizza would do well to consider one key variable: the age of their target customer.

That’s because, despite a “new normal” defined by more technology, delivery and takeout, different age groups still expect very different things from their dining experience.

That’s according to the State of the Restaurant Industry 2022 report published Tuesday by the National Restaurant Association. The association is a majority owner of Restaurant Business.

“One of the most important things to come out of the consumer research this year is … the behavior, attitudes and expectation of consumers regarding restaurant meal solutions is widely, widely divergent by age category,” said Hudson Riehle, SVP of the association’s research and knowledge group, on an upcoming episode of RB’s “A Deeper Dive” podcast.

In other words, restaurants should be wary of painting today’s customers with too broad a brush as they weigh what pandemic-era innovations to adopt.

To-go alcohol is a prime example. During the pandemic, many jurisdictions loosened laws around off-premise alcohol to give restaurants a sales boost. A lot of restaurants took them up on it. But the option to pick up a margarita with that burrito bowl appeals to some generations more than others.

According to the report, a whopping 70% of Gen Zers (consumers ages 21-25) said the ability to add alcohol to a takeout or delivery order is a determining factor in their restaurant decisions. Millennials were not far behind at 62%. That’s compared to 36% of Gen Xers who said so and just 12% of baby boomers.

This pattern is repeated throughout the report. 

Another question asked consumers what style of dine-in service they prefer. The options were traditional service from a waiter, or ordering and paying with a tableside tablet or mobile app. 

More than half (52%) of Gen Zers said they’d prefer the latter option. Forty-five percent of millennials agreed. But the majority of all adults (68%) still prefer the old-fashioned full-service model.

But this doesn’t mean that sit-down restaurants should replace half their servers with tablets at every table.

“It just means that coming out of this, the areas of rapid growth are going to be different operational and business models,” Riehle said.

To identify those models, he said, take a look at what the young folks are doing. 

“These consumer research results of these younger age cohorts, I mean, that’s the future of the restaurant industry, shortly.”

We’ve already mentioned off-premise alcohol and digital ordering for dine-in as services that are more popular with Gen Z. Here are some others:

Delivery and takeout: Nearly 80% of Gen Zers said they’re more likely to order takeout from a restaurant now than they were before the pandemic, and 70% said so for delivery. That’s compared to 62% of all adults for takeout and 58% for delivery.

Third-party delivery: Across the board, consumers prefer to order delivery directly from the restaurant. But Gen Z is still the most likely to use a third-party delivery service like DoorDash. More than 40% said that is their preference, compared to 24% of all adults.

Robots: Gen Zers and millennials are more likely to choose to have a robot, self-driving car or drone deliver their food. An average of 64% said so across both groups compared to 44% of all adults. They’re also more open to having a robot actually make their meal. Nearly 65% of Gen Zers said they would use this option vs. 38% of all adults.

Technology in general: Four in 10 Gen Zers said they think restaurants need to add more tech, but just a quarter of all adults agreed. More than half (52%) of all adults said restaurants have the right amount of tech right now. Take that into account when deciding whether to add that new bell and/or whistle to the tech stack.

Again, this is not necessarily bad news for restaurants with more traditional ways of doing things, Reihle said. It’s just a matter of knowing the needs of your demographic.

“You can still have successful operations that are targeting older-age cohorts that reflect the dining experiences of 10 years ago, and the industry is large enough that you can in essence not only survive but prosper,” he said. “But in terms of the large growth opportunities over the next decade, it is a different paradigm.”

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