Earning the Loyalty of Generation Z Diners

Understanding Gen Z paves the way to loyal diners

A segment of diners stands to disrupt the restaurant industry in a way that's never been seen.

With more adventurous palates, deeper concerns about social welfare and the environment, ingrained affinity for technology and the most diverse demographic to date, Generation Z is driving an evolution in restaurant menus, design and service models. Engaging these young customers, defined as anyone born after 1996, will pay off in decades of loyalty.

“Every parent, employer, marketer and neighbor needs to understand this new generation that is poised to change everything,” says Jason Dorsey, co-founder and chief strategy officer of the Center for Generational Kinetics, a firm that studies and provides insight on different generations.

“In generations, the changes and trends we’re seeing are actually rippling up instead of down,” he says. “That means that trends are now starting with teens and rippling up to the rest of us in away that makes iGen (another term for Gen Z) the true trendsetters for everyone, including their grandparents. This explains why iGen’s grandparents use Facetime and may make the jump to Snapchat even if right now they think it is the most ridiculous thing ever.”

If Dorsey is correct, restaurateurs will need to find ways to slay their young diners but not come across as thirsty. Here’s a start to speaking their language and getting to the K.

A decade ago, purse hooks at the bar were a nice touch. Today, the must-have amenities are charging stations and Wi-Fi, two items important to alwaysplugged- in Gen Z. Online ordering capability runs a close third.

Because they are tech natives, Gen Z is often cashless. That phenomenon has driven several restaurant chains, including Sweetgreen, to adopt a cashless payment model. Not only does it speed up service, it also supports the company’s 30 percent of digital orders.

body_image2Eatsa, a fully automated quick-service concept, takes things a step further: “No lines. No cashier. No nonsense.” Customers order from the menu of quinoa bowls and salads using either their phone or an in-store iPad, and orders (prepared by back-of-the-house humans) pop out of a cubby.

But there’s a caveat.

“You might think Gen Z would be less concerned about the personal touch and more interested in technology, but service is incredibly important to this group,” says Robert Byrne, senior manager of consumer insights for Technomic. “If I’m only connected digitally all day, this might be the one time to connect with a person.”

Between the Food Network and “Top Chef,” an explosion of better dining options and their status as the most ethnically diverse group yet, Gen Zers aren’t likely to settle for so-so food. They favor local, organic ingredients and global flavors, along with cage-free, grass-fed, humanely raised meats and plant protein options.

Flower Child, a 3-year-old Fox Restaurant Concepts brand, taps into those values in a hippie farmhouse chic setting that appeals to all, but especially families with young Gen Zers in tow. The most popular dish, the Mother Earth Bowl, combines ancient grains, roasted sweet potato with red pepper miso vinaigrette, cucumber relish with broccoli pesto, arugula, portobello mushroom, avocado and hemp seeds. “It’s hot, it’s cold, greens, grains—a little bit of everything,” says Peder Bondhus, the concept’s brand chef.

At the University of Massachusetts in Amherst, a variety of ethnic choices reflect the award-winning dining program’s core values of health, world flavors, sustainability and community. Surveys show that students value healthy, convenient, authentic and exciting food choices, says Ken Toong, auxiliary enterprises executive director. They also favor noshing over full-blown meals, so smaller portions, such as 2-ounce grass-fed beef sliders in place of quarter-pounder burgers, have gone over well.

Gen Zers want to know where the food was born and see how it’s made, meaning open kitchens and fast-casual assembly lines. Digital menus that list ingredient sources along with food allergy and special dietary labels are important.

Some restaurants have taken transparency a step further, adding a sense of showmanship, such as the biscuit theater at newer units of Bojangles’ where customers can watch team members knead fresh dough from a window behind the front counter. Domino’s tracking app, which follows a pizza from order to delivery, plugs into Gen Z’s desire for transparency and has helped the chain remain relevant. More than half of the brand’s sales come through digital channels, half of those via mobile ordering.

Like millennials, Gen Zers tend to align with companies that behave responsibly. Gen Z customers “are not putting up with basic food and beverage,” says Fred LeFranc, founder of Results Thru Strategy. “They are making conscious decisions to do business with businesses that have a higher cause.”

Tender Greens, a fine casual health-focused concept based in California, is a model citizen. The founders have worked with growers to develop hydroponic gardens, addressing California’s extended drought. They also established the Sustainable Life Project, which provides six-month culinary internships to young adults aging out of the foster care system in Southern California. The project evolved from an earlier practice of hiring homeless teens.

Much of Gen Z is still counting on Mom and Dad or a minimum wage job to finance their tastes. That doesn’t necessarily mean they are looking for the cheapest food—remember, they value high quality and support sustainability—but they need some affordable options, or at least value for the money.

body_image1-8Potbelly Sandwich Shop, which ranks among the Gen Z’s top three favorite quick-service restaurants in Technomic’s latest brand metrics study, scores high on the value equation. The hot sandwiches are a good value, “but it’s also a fun place,” says Robert Byrne, senior manager of consumer insight. “Most of their units have live musicians, and the decor, which hearkens back to Potbelly’s origin as an antique store, is unique in today’s environment.”

Peer recommendations rule for this generation, but they aren’t using the same channels that older groups favor. According to investment firm Piper Jaffray, which conducts a semi-annual survey of teenagers, they prefer Snapchat and Instagram to Twitter and Facebook (see sidebar). After watching those before them bare it all on Facebook, this younger audience prefers more private, anonymous vehicles for sharing.

Tender Greens taps popular teen vloggers Brennen Taylor and Colby Brock for regular live vlogs on YouTube and Snapchat, which has fueled visits from eager fans. Spokesperson Christina Wong says the company supports their habit with gift cards. “We love rewarding our rabid fans,” she says.

For Gen Z, brand loyalty depends on many moving parts. “If you want to make a concept relevant to a generation, you need to be thoughtful about curating the overall guest experience,” says LeFranc.

Cleveland-based Megan Rowe covers trends in restaurants, hotels and travel. Follow her @ontherowed.

Photography by Frank Lawlor