Operators are increasing focus on this sometimes-neglected consumer group
August 22, 2017
When it comes to courting customers, operators have paid a lot of attention to Millennials and Baby Boomers, while largely overlooking Generation X. With the industry posting six consecutive quarters of no traffic growth in the year ended June 2017, NPD officials advised that more attention should be paid to Gen X.
“I don’t think [operators] realize how big Gen X is and how important they are. Their focus has been too narrow. They’ve overlooked an opportunity,” said NPD analyst Bonnie Riggs. “Right now, in today’s marketplace, you have to go after them.”
According to the latest NPD research, Generation X, or consumers ages 36 to 52, represents 20 percent of the population, about 22 percent of restaurant dollars and 23 percent of restaurant traffic. Those number aren’t far off from other consumer groups. Millennials, or consumers ages 21 to 35, represent 24 percent of the population, about 24 percent of restaurant dollars and 25 percent of restaurant traffic. And Baby Boomers, or consumers ages 53 to 71, represent 23 percent of the population, about 29 percent of restaurant dollars and 26 percent of restaurant traffic.
A lot of emphasis has been put on Boomers because they are considered to be financially well off. However, Gen X households with dual incomes have wealth equal to Boomers, Riggs said.
“In today’s marketplace, you have to build loyalty, and nobody is going after this group. No one seems to reward them or take care of them,” she said.
To better target this important generation, operators need to better understand what matters most to them, so they can address those needs. NPD found that food quality, the ability to customize and variety are top Gen X needs. Gen X consumers respond to marketing messages that position meals as treats. In fact, treating themselves was the second most important reason Gen Xers said they visited restaurants. While surveyed Gen Xers rated fast casual and casual dining lowest on affordability, they are willing to pay more for quality, as long as they think it is a good value.
Although Gen Xers have money, they are busy, often with children. Because this generation has the highest percentage of children in the household, Riggs said operators must offer elements that address those needs, such as kid-friendly menus and seating arrangements.
Generational success
While some operators overlook Gen X, a few brands are honing in on this group. Executives at Dallas-based Which Wich and Santa Ana, Calif.-based Nekter Juice share strategies for appealing to Gen X consumers.
Nekter Juice Bar pivots toward traditional advertising
When it comes to reaching Gen X, Nekter Juice Bar applies a multi-faceted approach, but recently began shifting more money to traditional advertising.
“Out-of-home advertising is as important or more important than its ever been. I think people overlook it too quickly,” said Steve Shulze, president and CEO of Nekter.
Nekter is focusing on billboards, radio and print newspaper advertising to target Gen X. In Orange County, Calif., Nekter had 19 billboards at last count. The brand may consider expanding this strategy to other markets as it grows its out-of-home presence.
Nekter has also seen positive results from its partnership with IHeartRadio. It’s renewing the partnership for another 12 months and is in negotiations to expand to other markets.
But these efforts don’t mean Nekter is overlooking digital strategies to reach Gen X. When the chain launched a mobile ordering app in 2016, many thought it was to appeal to Millennials. In fact, it was largely targeted at Gen Xers who want to get in and out of restaurants quickly, Shulze said.
“I do think the digital component is important,” he said. “We spent a lot of time on the app.”
Which Wich revamps kids’ menu
For Which Wich, re-doing the kids’ menu has been highly successful at targeting Gen X, one of the quick-service chain’s core customers.
“It really is a deciding factor when they’re choosing where they want to eat,” said Courtney Sinelli, executive vice president of Which Wich.
The revamped menu debuted last June, out of the efforts of a committee of corporate team members and franchisees, many of whom are Gen Xers themselves. The lineup features meals that are fresh, user-friendly, healthy and that “surprise and delight.”
There’s a classic Peanut Butter and Grape Jelly Sandwich, a Super Awesome Grilled Cheese and, for kids who don’t eat bread or are gluten-free, Ham and Cheese Rollups, all priced at around $5 and served in a bento-style box designed to eat in or take out. All items include freshly sliced apples, carrots, a choice of drink and a token for a handful of little chocolate candies.
After rolling out the new menu, Which Wich reported a 50-percent increase in the amount of kids’ meals sold per day.
