What restaurants need to know about millennial and Gen Z consumers

Paul Tiedt | Feb 27, 2020 Paul Tiedt 02/27/20

Restaurants have taken 21st century approaches to attract millennial and Gen Z consumers—but don’t worry, a branded TikTok account isn’t necessary for earning their share of stomach. And while they might be making an impact on the food landscape as we know it, keeping them satisfied doesn’t have to be complicated. Read on for three things restaurant brands need to know about these younger generations, their food-purchasing motivations, and ways to grapple with competing segments.  


1. Millennials + Gen Z are more satisfied than other generations

The good news for restaurant brands? Our research shows millennials and Gen Z are overall more satisfied with their experiences than other generations.

OSAT-to-box

There’s plenty of factors that influence Overall Satisfaction—Service, Accuracy of Order, Cleanliness, Price, and more. Luckily, all three subsets are most satisfied by the same two things: Taste of Food/Beverage and Staff Friendliness. By focusing on both, restaurants can increase satisfaction for teens, retirees, and everyone in between.


2. QSR can’t get too comfortable—convenience stores are vying for their customers

While quick-service restaurants are still the top choice for younger generations, millennials are gravitating toward convenience stores more than ever before: C-store share of stomach rose to 41% in this year’s data, trailing QSR by only 3 ppts.

Where-do-they-go

What’s causing millennials to ditch their fast-food favorites for convenience store cuisine? More importantly, how can restaurants use this data to adjust their strategy and win back young customers?

Speed of Service: C-stores’ self-serve style means customers don’t have to wait long for anything. So at restaurants, a well-trained front-line staff focused on process improvements can help boost efficiency, increase speed, and enhance the customer experience—earning back their share of stomach from convenience stores.

Previous Positive Experience: 60% of c-store food + beverage buyers cite previous positive experience as a reason for visiting, compared to 30% of QSR visitors. Restaurants can’t rely solely on past visits to earn repeat customers, so they should focus on what draws millennials and Gen Z to QSR over convenience stores. Specific or unique menu items, promotions, and loyalty programs can get these age groups back into restaurants.


3. Invest in their preferences for long-term loyalty

Gen Z’s spending power is estimated to be between $29 billion and $143 billion, surpassing the millennials before them. As this demographic grows and spends more money on dining out, restaurants can benefit by catering to unique trip motivators, like:

Restaurants that proactively cater to the food-shopping preferences of younger generations might create brand loyalists out of these customers—and earn their business for decades to come.


Adjust your strategy to prepare for current—and future—customers  

In 2030, the U.S. workforce will be two-thirds millennial and Generation Z. While their preferences have shifted from those of the generations before them, you don’t have to start from scratch. Small tweaks to your current strategy can help you cater to current customers while preparing for a future dominated by Gen Z and millennial diners.

An integrated, multi-channel XM platform, when paired with professional services, helps restaurants uncover what Gen Z and millennial food-purchasers expect from their dining experiences. To gain an advantage in an increasingly competitive market, contact SMG today.   


Paul Tiedt | SVP, Research
Customer Experience Update