The Rise of the Identity Economy

Consumers aren’t just buying food – they’re buying belonging. Trends expert Katie Ayoub, of Katie Ayoub & Associates, explains how the “identity economy” is shaping dining decisions, especially among Gen Z, and what that means for operators of all sizes.

Q: We’ve heard about the “experience economy” and even the “emotion economy.” What exactly is the “identity economy”?
A: Back in the late ’90s, B. Joseph Pine II and James H. Gilmore – authors of “The Experience Economy” – introduced the idea that companies create value by staging memorable experiences. We certainly haven’t moved on from that – it’s just evolved. We moved from the experience economy to the emotion economy, where brands had to resonate emotionally. And now we’ve moved into the “identity economy,” which is really about how brands help you become who you want to be. Consumers are choosing experiences that affirm their values – especially Gen Z. They’re expressing their identity or signaling belonging. The core characteristic of the identity economy is that consumers align with brands that reflect their worldview, lifestyle or sense of self.

Q: When did this shift start to take shape?
A: Up until 2020, we were really still in the emotion economy. Post-2021 and beyond is the identity economy. And now, I think there’s another layer emerging – the “attention economy” – which completely dovetails with identity. Both are being driven largely by social media and what it’s doing to everyone’s attention span. Getting a young person’s attention today is incredibly challenging.

Q: How do the attention economy and identity economy differ?
A: The attention economy recognizes that consumer focus is limited – really limited, highly fragmented and highly valuable. Brands have to figure out how to engage in a very short amount of time. That might mean a dish with visual impact, a clever LTO concept or a flavor story that pops in a feed. The identity economy goes deeper. It’s about self-expression. What captures attention often reinforces identity, and what resonates with identity draws more attention. I like to say the attention is the strategy – how do I get their attention? – and the identity is the value. Consumers today, especially Gen Z, want to be part of your brand story. They don’t want you to broadcast it to them.

Q: Can you share a few brand examples that show this in action?
A: Sweetgreen is a great one. It’s not just that you can customize your salad – it’s that you can share that customized bowl on social media to reflect who you are. Erewhon’s another. Love it or hate it, there’s a reason it’s so sticky online. Yes, their smoothies are $22, but they’re “arm candy.” We’re in the era of arm candy when it comes to beverages.

And then there’s Chili’s. One of the reasons they’re doing so well right now is because they invite people into their culture in a fun, creative way that absolutely resonates with Gen Z. You can get mozzarella stick pillowcases and socks – you’re identifying as a lover of their stuff. Since October, their sales have spiked. Sure, it’s the Nashville Hot Mozzarella Stick, but it’s really the marketing around that item.

Q: What about independent operators or mom-and-pops – how can they tap into this idea?
A: They actually have an advantage. Smaller restaurants are nimbler with their innovation and menu development. They can respond to trends or cultural movements much quicker, and their social media can be more real-time and authentic. Influencer partnerships are also huge – finding content creators who align with your brand and maximizing that relationship to help drive attention. And it’s not about just broadcasting your weekly specials anymore. You’ve got to invite your guests and followers to be part of your story. Leaning into nostalgia, surprise, or humor also works – think McDonald’s adult Happy Meals or cereal-milk shakes. Those ideas spark emotional connection.

Q: Any recent examples that show the identity economy in action through experience?
A: I love what Le Pain Quotidien did in New York. They hosted a daytime “bakery rave,” inviting a local running club to come carb up after their 5K. It was fun, community-driven, and completely on-brand. They found a community that resonated with them and made something special for that group. Or take Spaghetti Disco, a pop-up in New York. At midnight, they bring out trays of spaghetti and meatballs to people on the dance floor. Pasta becomes an experience – and with experience, you form identity with your consumer.

Q: So, in short – what’s the takeaway for restaurant operators?
A: Figure out how to make your brand part of your guests’ identity. Invite them into the story and make it fun.

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