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Tech Tracker: How digital tech is capitalizing on the hot restaurant reservations market
Tock and Google now offer experience reservations; Diibs launches as a platform for bidding on last-minute reservations
The race is on for the consumer's food dollar. Use this report to understand what consumers want and how you can meet their needs. If you don't, they have many other options. Get the full report>> Consumers have more choice, less money>> Meet the higher-income woman>> Meet the Millennial family>> Meet the Baby Boomer >>
Quick and quality
Millennials with no kids are the heaviest users of fast-casual restaurants. This segment specializes in high-quality food served quickly.
This demographic includes the heaviest users of the afternoon snack daypart. Younger generations are moving away from three square meals a day.
This group is the heaviest user of supermarket foodservice. Prepared foods at retail stores hold high appeal for them.
Convenience is key
This generation was raised on tech, and they are early adopters. Ten percent of the total wallet of this group is spent on e-commerce.
This group has heavy usage of delivery. They are also above-average users of carryout. They crave the convenience factor.
This group scores well below average for full-service restaurants from casual to fine dining. They prefer to eat at home or on the go.
Watch out for:
Grocers offering prepared foods. These retailers hold high appeal for the Millennial with no kids. For instance, Mark visits Kroger most frequently of any other retailer.
This generation is well tuned in to tech, so if you don’t have options to order or pay online or by mobile, you should.
Millennials like to cook at home more than other demographic groups, so meal-kit providers such as Blue Apron should be on your radar.
His top brands | His top restaurants |
---|---|
Kroger | Buc-Ee's |
Walmart | Firehouse Subs |
Kohl's | Freebirds World Burrito |
HEB | Mooyah Burgers |
Adidas | Rattlers BBQ |
Millennials are digital natives, and restaurants that seek to attract their dollars should target multiple channels for the greatest success. Photo: Danilo Andjus / Thinkstock
1. Use digital platforms to reach customers. For Millennial men interested in sports, brands like Buffalo Wild Wings do a good job of reaching customers, especially during seasons like fantasy football and March Madness. According to Jamie Cohen, chief branding officer of Jason’s Deli, “Digital channels are easy to use for that targeting, as well as contextual marketing on sport sites, food and lifestyle channels (think YouTube), etc. The image is food and drink with friends, being dudes.”
2. Convenience and loyalty. Millennial consumers like 28-year-old Mark, who is married with no children, devote about 15 percent of their total spending to restaurants. NPD found that Millennials with no children are above-average users of retail establishments for obtaining a prepared meal. They are also fond of visiting fast-casual restaurants, and are average users of quick-service eateries. (Still, Mark spent $9.40 at Wendy’s during a day of shopping.) He was also a big user of Buc-Ee’s, a regional convenience store, as well as the fast-casual Firehouse Subs, Freebirds World Burrito and Mooyah Burgers chains. “He seems to be very brand loyal,” NPD noted.
3. Make delivery an option. Millennial men “use delivery to an above-average degree, as well as carry-out,” NPD found. “Considering their lack of interest in visiting full-service places, it is not surprising that compared to all consumers, their on-premises dining is below average.” Mark, whose household income is between $50,000 and $75,000 a year, appears to devote the “vast majority” of his spending to groceries, leading NPD to suspect that he likes to cook and eat at home.
4. Craft menus broad in taste and transparent on ingredients. “Millennials, more than any generation before, are concerned about ethics in food,” said Chris Tripoli, president at Houston-based A’La Carte Foodservice Consulting Group. “They are looking for fresh, rotating, clean, chemical-free.” Millennial tastes are broad, including their adult beverage selections, he noted. “Specialty beverages that are fresh and rotating can represent something fresh and local and seasonal,” he said. “The Millennial has a quick learning curve. They try something they like, and then are interested in learning something more.” Millennials gravitate to sweeter wines and even flavored whiskeys, such as cinnamon, honey and pomegranate, or fresh, in-house juices and flavored simple syrups, he said.
5. Design restaurants to accommodate gatherings. Millennials generally view dining as a social occasion, so restaurants should offer flexible spaces to accommodate different sizes of groups. Communal tables have become standard in concepts from fast casual to casual dining, allowing for the coming and going of friends and fellow diners.
TGI Fridays remodeled a restaurant with a high percentage of Millennial customers to be more conducive to socializing. Photo: TGI Fridays
Chili’s bar program. When a married Millennial man like Mark visits a casual-dining restaurant, it’s often to a brand like Chili’s Grill & Bar. The division of Brinker International Inc. has been working to increase its alcohol mix, which is about 14 percent of sales, to a level enjoyed by competitors, which can go as high as 21 percent at TGI Fridays. John Cywinski, Chili’s executive vice president of strategic innovation, said the brand was testing the expansion of tap beers from six to 12 offerings, and perhaps adding margaritas on tap. The brand was also exploring physical changes in some bars, including the use of reclaimed wood, new lighting, fixtures, staff attire, music and sporting events to “energize it, make it more vibrant,” he said.
TGI Fridays' communal spaces. In March, TGI Fridays debuted a remodeled, 13-year-old restaurant in Corpus Christi, Texas, that skewed high in Millennial customers. The chain added mobile and reservations technology and multi-bar areas, and expanded its operating hours, grab-and-go items and a new area called Fridays Offsite to appeal to the coffee-shop crowd. The renovation was aimed at creating “Fridays as a social place to be,” said Ricky Richardson, president of TGI Fridays USA. The unit offers extended hours, from 7 a.m. to 2 a.m., to catch snack and late-night dining occasions, as well as brunch on Saturdays and Sundays. NPD found that Millennial males are most likely to purchase food at the breakfast or snack dayparts.
Attracting digital natives. Millennial men are demanding when it comes to technology, having grown up with and used it most of their lives. According to NPD research, unmarried Millennial men spend 10 percent of their total wallet on e-commerce. “They want information, and they want it quick,” said Tripoli. That information includes basics like location, hours and contact information, but can also extend to ordering through apps or online and payments. Those considerations aren’t specific to Millenials either, he said. “Millennials help us think about the details,” Tripoli said, “and those details don’t hurt the other groups of customers.”
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