Gen Y & Gen Z’s Influence on QSR Marketing Efforts
Before the COVID pandemic, consumers were eating outside of the home more than ever before. In the US, dining out surpassed dining at home in late 2016, and the gap continues to grow. As we enter the post-pandemic, people are eager to get out of their homes and back into human interaction and the social aspects of dining out.
Today’s younger generations, Gen Y (also known as Millennials) and the emerging Gen Z populations, continue to become a much larger market for limited-service restaurants (LSRs). However, they have different “tastes”, demands, and preferences than their predecessors, and quick-serve restaurants (QSR) and fast-casual dining brands are being forced to adapt to maintain market share.
Tom Custer, VP of Retail/Brands at Orora Visual, states “The millennial generation is aging, and as their incomes are increasing, so is their love of restaurants. With the trend of eating out more, this consumer segment spends more per capita than any other generation on food outside of the home. However, it is not just about millennials anymore. As generation Z has challenged brands to rethink the customer experience, this generation has impacted the consumer mindset across all demographic groups.”
Members of Gen Y are now roughly 25-40 years old and makeup about 22% of the US population. Many of them are now raising families with both parents working. Gen Y spends more on prepared food than previous generations, with a growing focus on family dinner options. They also place a heavier emphasis on values, such as environmental sustainability, than previous generations.
Members of the emerging, digitally adept Gen Z are between 9-24 years old and makeup about 20% of the US population. They are mainly drawn toward affordable fast food based on its taste and convenience. Gen Z also places a heavier emphasis on values as they become of age - even more than Gen Y.
“All consumers, regardless of generation, are accustomed to being constantly connected and having their increasingly demanding expectations concerning quality, value, and convenience met where they are. To relate to this changing breed of restaurant patrons and the different motivations that govern their dining choices, restaurant brands need to adapt,” Tom Custer added.
Following these trends and changing to accommodate the needs of Gens Y and Z is essential to success in 2022 and beyond. This article features some of the more prevalent QSR and fast-casual dining trends, as well as how businesses are and should be adapting to them.
Convenience
Convenience is an important driver across many retail segment industries, and QSR and fast-casual restaurants are no different. Gens Y and Z want their dining experience to be as quick, efficient, and simple as possible. A recent study from Oracle Food and Beverage showed that 65% of customers don’t want to wait more than five minutes at the counter or drive-thru window.
Businesses are accommodating this trend in a variety of ways. Curbside pickup allows customers to order when it makes sense for them, pick up their food, and eat it wherever they please. Though it became popular during the COVID pandemic, it is here to stay.
Delivery services like DoorDash and UberEats are also incredibly popular these days. Businesses that work with these delivery services give customers another way to make their experience more convenient. No need to load the kids in the car or get dressed for that matter.
Businesses are also using more technology to make the dining experience more efficient and simpler for customers. Things like QR code menus, ordering kiosks, apps, and more are being utilized to streamline the experience for the customer. Chick-fil-A, for example, lets customers order via the Chick-fil-A app and choose how they would like to pick up their order, whether it be drive-thru, curbside pickup, or carryout. Additionally, they place employees in the drive-thru lane to greet customers and assist with pre-ordering and payment to speed up the drive-thru lead times.
More Healthy Options
Another trend gaining ground for both Gen Y and Gen Z demographics is a demand for more healthy menu options. According to a Statista study, 51% of Gen Y and 45% of Gen Z are always looking for healthy food. That increased demand for healthier options has had a huge impact on QSR and fast-casual dining food offerings.
In addition to advertising calorie and fat content, QSR and fast-casual restaurants can modify their in-store marketing to focus on healthier food options. In-store displays that highlight salads, fresh seasonal items, and meat alternatives show consumers that there are more nutritious options available.
Transparency and Authenticity
“To relate to this changing breed of restaurant patrons and the different motivations that govern their dining choices, restaurant brands need to offer the human experiences they are seeking through meeting their expectations with authenticity, clarity, and purpose,” says Custer.
Many customers want to see transparency when it comes to the ingredients in their food. They want to know if the ingredients are organic or non-GMO, what kind of farms they come from, etc. Others want to know if the restaurant is socially conscious and responsible.
Chipotle, for example, consistently focuses on the quality and sustainability of its ingredients, using sustainably sourced meat without added hormones, local organic produce, and more. This shows consistency and commitment to those values that appeal to modern consumers.
Retail marketing, both in-store and online, should focus on the restaurant’s commitments and brand values. In-store marketing, such as displays and signage at the point-of-purchase, can lean into things like ingredient transparency, sourcing, giving back to the community, local and national causes, social issues, and sustainability efforts. All of which are of growing importance to all generations.
Conclusion
It’s no doubt that Gens Y and Z have a dramatic influence on today’s LSR dining experience. They require an expanded menu, integrated technology and innovation to make the experience more convenient, and a marketing shift that focuses on values and transparency to cater to the tastes of these younger consumers.
Custer adds; “Acknowledge that business as usual simply won’t cut it anymore. Consumers today are empowered to control their own engagement and experiences, and in this category particularly, they have many options available to consider and engage. Innovation and change are integral to success for brands across all retail today. So, learn from the brands that are truly mobilizing transformation in their business, to strengthen and continue to delight and develop relationships with consumers.”
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