According to Knit’s 2022 Restaurant and Dining Report, in the US alone, Gen Z has an estimated buying power of between $150 billion and $360 billion globally, smashing all estimates and projections from years before. There’s no denying that Gen Z is an extremely important and powerful segment to capture in any industry. However, many Quick Service Restaurant (QSR) brands and independently owned restaurants are not yet prepared to accommodate Gen Z’s buying or dining habits, let alone Generation Alpha after them. Allie Metz, global project manager for digital signage at Acrelec, explores.
As consumer demographics shift towards the Gen Z population, it is increasingly imperative for Quick Service Restaurant (QSR) brands to adapt their operational strategies to attune to this young generation’s evolving preferences and demands. Gen Z is characterised by its affinity for authenticity, individuality and digital technology, and we will explore how QSR brands are embracing significant changes to deliver a robust, seamless, personalised and engaging customer experience. But will it be enough or successfully executed for certain brands to retain a competitive advantage in a Gen Z-influenced market?
Emphasising authenticity and individuality
Gen Z appreciates the flexibility of customisation and the ability to assert their identity through their food choices. This trend is prominently evident in restaurants like Chipotle, a highly popular brand whose customer base is nearly 50% Gen Z, and other local eateries that have adopted an assembly line model, which enables customers to tailor their meals according to their specific preferences. This approach to individual customisation does more than just satisfy the diverse palate of each customer. It also builds a connection between the consumer and the brand. The brand earns loyalty and repeat business by consistently meeting their specific tastes and needs through self-tailored meals.
However, at Acrelec, we’ve identified that customisation and personalisation are not the only keys to capturing the Gen Z market. The integration of data and analytics into business operations serves as a vital tool for understanding and meeting the needs of Gen Z customers. This tech-savvy generation, more so than their predecessors, shows a remarkable openness towards sharing their data. Utilising this data allows QSRs to understand their customers in more dynamic ways and offer a personalised, seamless experience.
For instance, if a customer is near a store, a notification can pop up on their phone to alert them of available offers. By utilising their order history, the QSR brand can suggest similar meals or quickly create an order of your most bought items. This level of personalised marketing is not only appealing to young consumers but also highly efficient for QSR brands competing in a crowded marketplace.
Empowering native tech users
Gen Z’s extensive use of mobile applications offers an excellent opportunity for QSR brands to gather valuable consumer insights. Instead of relying solely on traditional methods of feedback like physical comments on receipts, restaurants can leverage their digital platforms to collect more comprehensive and relevant responses.
Mobile order apps can encourage customers to leave reviews, thus enabling brands to understand their customers’ preferences and experiences better. Many QSR brands have already adopted app-based customer loyalty programmes and are actively working to improve the user experience.
The more Gen Z patrons utilise these QSR apps, the more data they will generate and the greater the authenticity and personalisation of their experience in a restaurant, which is what a large swath of them are after. Even for fast-casual restaurants or dine-in operations, understanding the preferences and experiences of your customers at such a degree will help guide major business decisions. It’s just like the longstanding suggestion box. Except now, we are placing a suggestion box in every customer’s pocket and rewarding them for their contribution.
The integration of data and analytics also allows QSR brands to refine their menu offerings and marketing strategies, thereby enhancing the overall customer experience. As AI and machine learning become more accessible, these tools for data analytics will also become more accessible. Understanding customers’ needs, preferences and behaviours can lead to strategically tailored offerings that resonate with Gen Z consumers and shape them into loyal patrons.
Encouraging feedback and communication
Collecting feedback and fostering two-way communication within loyalty programmes are essential for several compelling reasons. Firstly, it’s a critical tool for enhancing customer satisfaction and loyalty. When customers feel heard and valued, they are more likely to develop a stronger emotional connection with a brand. Gen Z, in particular, values authentic interactions and expects brands to listen and respond to their opinions. By actively seeking and acting on their feedback, businesses can cultivate a loyal customer base, which is crucial in the competitive landscape of QSRs.
Secondly, feedback and communication help businesses identify pain points and areas for improvement. Gen Z consumers are known for their high standards and willingness to vocalise their opinions, whether positive or negative. By providing an avenue for them to express their thoughts, QSR brands can uncover operational issues, menu shortcomings or service deficiencies that may have otherwise gone unnoticed. This valuable feedback can be used to refine processes, enhance product offerings and optimise the overall customer experience, ultimately boosting customer satisfaction and loyalty.
Moreover, feedback and communication contribute to brand transparency and trust. When a business acknowledges and addresses customer concerns openly and honestly, it demonstrates its commitment to accountability and improvement. Gen Z, in particular, places a premium on ethical and transparent practices, and brands that actively engage with their customers in this manner are more likely to earn their trust and loyalty. Overall, incorporating feedback and communication into loyalty programmes is not just a customer-centric approach but also a strategic move to build brand loyalty, improve operations and stay competitive in today’s market.
Adapting to the new generation of consumers
Today’s QSR brands are increasingly adapting their operations to cater to the unique needs and behaviours of Gen Z consumers. From allowing customisation in their food orders to leveraging digital platforms for data collection and personalised marketing to fostering transparent communication within loyalty programmes, these adjustments are not just a response to changing consumer trends but a strategic effort to create a more engaging and personalised customer experience.
With Gen Z consumers more open to sharing their data, QSR brands have an unprecedented opportunity to understand their customer base better and tailor their offerings strategically for maximum impact.
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