While it’s no secret that Millennials have been making steep cutbacks in restaurants visits in recent years, what remains a mystery to many operators is how to get the growing consumer group out of the house and back into restaurants.
The answer may be in restaurants’ ability to appeal to Millennials’ specific sensibilities, including their strong desire for a unique dining experience, according to recent findings from The NPD Group, a global market research company.
“It’s a different experience, that’s what they’re looking for,” said NPD analyst Bonnie Riggs. “To get them back, [operators] are going to have to create [that].”
Though Millennials are generally grouped as consumers ages 18 to 34, NPD divided them into two groups for the study, since their spending habits differ. Older Millennials, those ages 25 to 34, and the heaviest users of restaurants between the two groups, have cut back most overall, making 45 fewer visits per person over the past six years. Younger Millennials, those ages 18 to 24, made 27 fewer visits per person between 2009 and 2012, but have showed some improvement in the last two years.
The study findings are likely most important to quick-service outlets, where Millennials cut back most. Older Millennials made 27 fewer visits per person to quick-service eateries, while younger Millennials made 10 fewer visits per person. However, Millennials still make the majority of their visits to these establishments.
While both older and younger Millennials made fewer visits to full-service restaurants than they once did, the data reveal that older Millennials were responsible for the majority of the full-service losses.
The importance of an experience to Millennials is underscored by their increased visits to fast-casual concepts, known for their focus on the dining experience, fresh ingredients and friendly service. In the last six years, younger Millennials made four more visits per person, while older Milllennials made two more visits per person.
“Fast casual is also an experience, just a different kind of experience,” said Riggs. “That’s what they’re looking for.”
And while some restaurants are exploring technology, such as online ordering and tablets at tables, to create a new experience for Millennials, the effort may be detracting from another element of importance to Millennials: service.
“They think being media savvy will appeal — that isn’t new to Millennials,” said Riggs. “The service aspect is very important to this group. You get more of that at fast casual.”
Millennial attraction
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Many operators are beginning to recognize the power of Millennials’ influence, their ability to boost or break brands, and are making major plays for their dining out visits. Two chains share some of the secrets to their success with the 18- to 34-year-old set.
Sizzler
After decades of appealing largely to families and seniors, Mission Viejo, Calif.-based Sizzler is making a big move for younger diners.
“While Millennials may not have the buying power, they have the influence,” said Sizzler CEO Kerry Kramp. “They are hugely influencing brands. They are forcing a new way to look at the dining out experience.”
Two and a half years ago, the 152-unit steakhouse chain started a food truck to explore the taste preferences of young people and inform menu changes. To better connect with those diners, Sizzler began hiring Millennials for positions in its R&D and marketing departments.
“We recognized early on in order to connect with Millennials we needed Millennial staff,” said Kramp.
The chain’s latest effort to attract Millennials is the recently opened Sizzler Market Grill in San Diego, a smaller version of the concept designed to appeal to the changing tastes of today’s consumers, especially Millennials. It features a premium ingredient salad bar manned by “salad mixologists” and seating choices designed to encourage mingling and lingering. It’s been such a success that Sizzler plans to open another Grill in October.
LYFE Kitchen
LYFE Kitchen, the Irvine, Calif.-based fast-casual concept that is “flexitarian” in its food and its experience, has successfully targeted a broad customer base, including Millennials.
“We are absolutely a part of, very interested in, passionate about speaking to Millennials,” said Mike Donahue, LYFE Kitchen co-founder and brand relations officer.
Not only does LYFE’s better-for-you, have-it-your-way experience appeal to Millennials, but many of chain’s 10 restaurants were carefully opened, in part, in locations with a high density of young people.
“It’s no mistake,” said Donahue. “[Our restaurants] — in the hottest up and coming neighborhoods, newest communities, with renters buildings, around lot of nightlife — appeal to Millennials.”
The chain plans to continue appealing to Millennials with the opening of more such locations and with the September launch of MY Life, a new loyalty app.
