Millennials are hot but just how hot are they for the restaurant industry? Recently overtaking Baby Boomers (born 1946 to 1964) in number, the 2015 U.S. census estimated that there were 75.4 million Millennials (born 1977 to 1995) versus 74.9 Baby Boomers. The Millennial cohort that is collectively moving into their prime spending years is estimated to have spent $200 billion in 2017 and will have the most spending power of any generation in 2018.
Millennials will reshape the economy, and in turn, business practices.
Most restaurant brands are aware of the spending power and influence of Millennials. Many have explicitly identified Millennials as their core target and have set up their business and marketing strategies accordingly. Other restaurants have other generations in their core audience but question whether they should be targeting Millennials. But is a Millennial target right for all restaurant brands?
WHO ARE MILLENNIALS?
Millennials have grown up with the internet and an “always on” digital world. They use social media and the digital world with greater frequency and voracity than previous generations. Their affinity for technology is reshaping the retail space, using instantly accessible product information, reviews, and price comparisons. Brands that offer maximum convenience at the lowest cost are sought out by Millennials. As they have grown up in an era of rapid change, Millennials have developed a set of priorities and expectations that are quite different from earlier generations.
MILLENNIALS FOOD AND DINING HABITS
In the context of restaurants, Millennials differ from other generations in the following ways:
HOW ARE RESTAURANT BRANDS RESPONDING TO THE SPENDING POWER OF MILLENNIALS?
Several restaurant brands are leading the charge on adapting to the Millennial generation. Chipotle caters to Millennials by emphasizing their roots in local agriculture. Potbelly provides a la carte pricing to help Millennials stay on a budget while providing customization options. Wendy’s has added healthier and premium items to attract more Millennials. TGI Friday’s has introduced endless appetizers and a sharing menu.
IS A MILLENNIAL FOCUS RIGHT FOR EVERY BRAND?
While some newer restaurant brands are a total Millennial play, others have decided or are considering reframing their brand to focus on a Millennial target. This can be achieved but typically requires starting a new brand/sub-brand to be successful. Walking away from one generation (e.g. Baby Boomers) to try to attract Millennials can be the kiss of death for a restaurant brand as it alienates the existing customer base and clearly will not be successful if Millennials view the brand as targeting a generation other than them.
HOW CAN RESEARCH HELP?
There are ways to retain and grow an existing restaurant patron base while also attracting Millennials. As there is no “one size fits all” approach, custom designed research is recommended for understanding Millennials in the context of each restaurant’s legacy customer base. Care must be taken in not alienating existing customer bases and other generations.
The following are tips for conducting research to obtain actionable insights from Millennials:
IS A MILLENNIAL PLAY RIGHT FOR YOUR BRAND?
To determine if a Millennial focus will work for your brand a well thought out and planned research study will help avoid costly mistakes and will inform business and marketing strategy and tactics. Restaurant brands and the restaurant industry stand to gain plenty of ground using research to understand and adapt to the ever-changing market now heavily influenced by Millennials.
Heather Hatty is an Account Manager at Q2 Insights, a marketing research consulting firm with offices in San Diego and New Orleans. She can be reached at (760) 230-2950 ext. 2 or firstname.lastname@example.org
 Based on research conducted by the Hartman Group on behalf of the United States Potato Board reported by Taher – http://www.taher.com/millennials-crave-restaurants/
This entry was posted in Restaurant and tagged on January 3, 2018 by Q2 Insights