The better any business knows its customers, the better it can satisfy their needs – and an often overlooked way of identifying consumers and their preferences is by generation.
Age differences between major generational groupings that share similar attitudes – Baby Boomers (roughly those born between 1946 and 1964), Generation X (from the early 1960s to the early 1980s), Millennials (early 1980s to the early 2000s) and Generation Z (mid-1990s to 2000s) – can prove invaluable when designing menus, décor packages, service styles and marketing strategies. Those four demographic groups together comprise about 74% of the US population, clearly the bulk of today’s dining public.
The question of how to serve individual demographic groups “is simply asked, but the answer is a complex one,” says Troy Authement, president of Strategic Profits, a consultant in Austin, Texas. “Knowing the identity of your prospective customer is extremely important in answering this question.”
Segmenting consumers by age is important, agrees Stephen Roth, executive director of culinary services for Telluride Ski and Golf LLC in Colorado, although he admits: “We do this more for wallet size than age.” When it comes to his menu, he says: “As people age they desire more healthy options. That said, we don’t seem to shift that many of them.” Most of his guests are on vacation, which makes their visits “the one time of the year they will justify the calorie intake. Although they all ask for healthier options in our opinion surveys, and won’t dine with us if we don’t offer them, they very seldom seem to order them.”
Roth says he has noticed a couple of other major generational differences among his diners. He serves smaller portions at lower prices for happy hour guests, “who tend to be older or young, broke ski bums.” When it comes to appealing to guests’ social consciousness, he has found that “young people love that. We tell them about our local sourcing, and especially our recycling and composting programmes.”
A restaurant’s menu strategy must reflect what its diners want, agrees Authement. “I think there is too much talk about how different Boomers and Millennials are. Look for things they have in common. Cooking methods, such as sous-vide, combined with food trends like pork belly, make life fun and easy.” Offering smaller portion sizes, as well as meal/snack and sharing sizes, accommodates both the Baby Boomers and Millennials “whose eating habits are changing to more frequent, smaller meals”.
Distinctly different
“Each generational group may have distinctly different foodservice needs, yet there are opportunities to leverage their similarities and target specific customer groups without alienating others,” says Sara Monnette, senior director of consumer insights for Chicago-based research and consulting firm Technomic Inc. “Regardless of the generation it’s vital for restaurant operators and suppliers to understand their core customer base. So whether you’re working to appeal to your Baby Boomer base through dine-in ambience
and traditional menu offerings, or drawing in younger guests with faster service and an innovative menu, successful execution can begin with identifying and addressing what each group values as a generation.”
When Technomic recently examined the needs and behaviours of each generation, it uncovered a number of differences and similarities between them. For example: Generation Z, the first true digital generation, represents, in the words of the researchers, “the future foodservice consumer. They’re a generation on the move that strongly prioritises speed of service, technology, and having what they want, when they want it.” Millennials, “prefer to visit restaurants that offer new and unique foods and flavours”. Generation X and Boomers “converge on several preferences, such as the importance of a convenient location”.
Technomic researchers also found that Gen Z and Millennials tend to be more optimistic about and reliant on foodservice. “They’re more likely than older generations to anticipate increases in foodservice visits in the next year,” says Monnette. The format of dining preferences also varies by generation. “Of all the generations, Baby Boomers are most likely to visit restaurants for dine-in, Generation Z are most likely to order takeout, and Millennials are most likely to opt for delivery.”
Indeed, fast service is a key consideration for the youngest generation. Generation Z attaches the highest importance on fast service at limited-service restaurants (54%), compared to just 40% of Millennials, 41% of Generation X and 43% of Baby Boomers.
“Restaurant operators need to understand who their core customer is and why those customers use their brand,” Monnette explains. “They also need to evaluate the future value of their core customer, and if there are other customer segments they should be trying to attract in order to grow the business. I often see restaurant operators very keen on attracting more Millennials; this is certainly a valuable audience from which to gain business, but the approach needs to be balanced along with the needs and expectations of the current, loyal customer base, whoever that may be.”
Monnette emphasises that it is important to offer the right variety throughout the concept in order to appeal to different consumers. “Variety can be addressed through the menu – having a broad enough mix of options, such as varying portions and a range of price points to appeal to consumers with either diverse or narrow taste buds and to those with only a little or a lot of money to spend,” she says. Variety can be addressed through the service format and the ambience, such as through the type of seating options, that the restaurant creates.
“Baby Boomers in particular value service,” says Monnette. “They often have more time than their younger counterparts to sit and enjoy the overall dining experience.” Millennials use restaurants both for quick, convenient meals and as a place to gather with friends. “They love to try new foods and flavours and also enjoy the interaction that food can facilitate, such as sharing menu items.”
Nutritional empowerment
“There has been a lot of talk about going after a specific consumer group to drive sales,” notes Juan Martinez FCSI, principal and founder of Profitality LLC, a restaurant consultancy in Miami, Florida. “If you pay attention to what the brands are saying, it’s ‘wouldn’t it be nice to attract such and such a group in addition to the customer base that you already have’. It is not about replacing the customer you have, but rather augmenting your customer base. Most recently, this conversation revolves around the Millennial group.”
When it comes to production design, he points out that opening up the kitchen so diners can see its inner workings pleases Millennial guests. “We work with a concept called Giardino Gourmet Salads that calls this providing the customer with ‘nutritional empowerment’,” says Martinez. “It is empowerment to see into the kitchen and empowerment to order what they want, when they want it, how they want it. This empowerment is what the Millennial group is looking for.”
“Without such empowerment getting the Millennial customer would be more difficult,” he adds. “The Millennial group has more of a trust-but-verify mentality – if they can’t see what is going on, getting them to patronise the concept is more difficult.” Adjusting a restaurant concept to appeal more squarely to its target market is smart – but so is remembering that when demographics shift, so must the concept.
“The real prime life of any restaurant is only 10 years because a generation is 25 years, and the fifteenth year is the year of transition,” notes HG Parsa, professor of hospitality management at Daniels College of Business at the University of Denver in Colorado. “That means every restaurant must be prepared to update and upgrade its concept every 10 to 15 years, if they last that long.” Parsa points to McDonald’s as an example, which he says “re-invents itself every 10 to 15 years to stay relevant”. However, he warns that matching changing generations can be “like chasing the waves in an ocean”.
Beyond that, Parsa concludes, customers go to restaurants “for 17 different reasons. A Baby Boomer may go to a Baby Boomer place for dinner, but to a different place for breakfast, such as Starbucks, and a different place for lunch, such as Chipotle. So meal period and meal occasion are more important than generational needs.”
On social media
While conventional wisdom holds that social media is the near-exclusive province of younger Americans, Authement draws no such distinction. “Diners are all over the place these days, so good social media plays for both the Millennial and the Boomer. The use of email is a mainstay; (we) focus on sharing our story and getting diners involved, it’s not so much about pitching deals.”
Watts Wacker, founder and director of FirstMatter LLC in Westport, Connecticut, talks to entrepreneurs in terms of “cohorts,” or groups of people – Baby Boomers, Generation X, Millennials – who, so to speak, travel through time together. “We now have a new group of cohorts called Digital Natives,” says Wacker. “These are people who have spent the whole of their lives in the internet, in the ether. Twenty years from now those people are going to be 40.” Things such as drive-thru, to-go menus, ordering on the run and even just faster seating and tableside order taking and delivery are coming to be defined in a very different way, especially for younger consumers.
“When it comes to social media and advertising the most important thing is to be present where your consumer is,” Monnette says. “Younger consumers want to be engaged in multi-way communication between the consumer, the brand and the consumer’s network or peers. And the communication has to be authentic and believable, otherwise the consumer will quickly move on to the next thing that entertains them, elicits an emotional response or influences them to act.”
Howard Riell
