Technology

Here's where Gen Z wants restaurants to spend their tech dollars

Mobile ordering, paid reservations and, yes, dynamic pricing, are in demand among younger diners, according to a new report from the National Restaurant Association.
Gen Zer using phone to order
Tech-enabled ordering is Gen Z's love language. | Photo: Shutterstock

From online ordering to loyalty programs to AI and robots, there is more technology swirling around restaurants than ever these days.

But operators have only so much money to spend on it. 

Restaurants have to be judicious about what tech they choose to run with. So the question becomes, how do you decide?

One tried and true method is to follow the customer. And there is perhaps no demographic more closely watched by restaurants right now than Gen Z—the group of consumers aged 18 to 27 who will make up the industry’s core audience for decades to come.

“If you look at the number of Gen Z and millennials, they outnumber Gen X and baby boomers,” said Hudson Riehle, SVP of research and knowledge for the National Restaurant Association. And those young people have dramatically different perceptions and expectations of technology than their parents and grandparents.

It probably comes as no surprise that Gen Zers and millennials generally like technology and feel it has a positive impact on their experience at both fast-food and sit-down places, according to the restaurant association's Restaurant Technology Landscape Report published this week. 

What may not be as obvious, though, is that Gen Z is actually slightly less enthusiastic about technology than millennials. 

For limited-service restaurants, or LSRs, 57% of millennials said tech provides a positive experience, compared to 53% of Gen Zers, according to report. And in a full-service context, 48% of millennials said they’d like to see more tech options, while just 43% of Gen Zers said so. 

With that in mind, here’s what Gen Z does want to see tech-wise when they dine out, according to the report.

Easier ordering and payment

Topping Gen Z’s tech wish list are things that make ordering and paying easier and faster in restaurants. Thirty-six percent pined for a smoother ordering process at LSRs, while 34% said so about full-service restaurants, or FSRs.

That includes ordering on a mobile app (79%), on a tablet at the table (76%) or at a kiosk (73%). Heck, 60% even said they’re cool with scanning a QR code to order.

Easier payment via tablets, digital wallets and other contactless methods are also the expectation of roughly three-fourths of Gen Zers.

All of the above also applies to restaurant delivery. Seventy-three percent of Gen Zers said they’d prefer to order from a restaurant that incorporates tech into the delivery process vs. one that offers “traditional delivery service,” per the report. 

Bottom line: If your restaurant is after Gen Z customers and doesn’t have tech-enabled ordering and payment options, you should probably get on that. 

Ordering ahead at FSRs

The vast majority (88%) of Gen Zers would like to order online in advance from a sit-down place so that their food is ready soon after they arrive.

This form of tech is uncommon today in FSRs, and requires strong integration and coordination between the front- and back-of-house. But Gen Zers are apparently not fans of long, leisurely sit-down meals.

“When you do customer satisfaction surveys, the ability of that party to control when they actually leave that table is a tipping point,” Riehle said. 

Paying for a table

While Gen Z seems interested in getting in and out of restaurants as efficiently as possible, they’re also picky about where they sit. 

More than half (54%) said they’d be willing to pay a small fee—maybe $10—to reserve a specific table on a restaurant’s seating chart.

That comes as reservations have become harder to get at many popular table-service spots.

Dynamic pricing

That’s right: 71% of Gen Zers said they’re OK with the surge pricing strategy that got Wendy’s in hot water just a few weeks ago. 

Riehle pointed out that dynamic (or variable, or surge) pricing has been around for decades in the form of happy hour and other daypart specials. Tech has simply given restaurants the ability to make the pricing adjustments in real time. 

That means prices might be lower during slower periods, which is presumably what appeals to Gen Zers, who were the most interested in variable pricing of any generation.

Still, the findings are very much at odds with the reaction Wendy’s got when it mentioned it would be testing the technology—an announcement that it later walked back.

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