What QSRs Need to Know About Marketing to Millennials

 

In 2015, Millennials (defined as those currently aged 18 to 34) are expected to overtake Baby Boomers for the first time, reaching 75.3 million, according to Pew Research. Already, they make up about a quarter of the U.S. population.

This generation has around $1.3 trillion in spending power. In the year ending in June 2014, Millennials spent $95 billion at restaurants. While the recession hit Millennials harder than many other generations, they still eat out more than other cohorts, purchasing 36 percent of their meals away from home, compared to 31 percent for Generation X and 26 percent for Baby Boomers. So it’s really no wonder restaurants see them as a key demographic to target.

Now, you’ve probably heard a lot about these so-called Millennials. They’re “lazy and entitled.” They’re “boomerang kids.” But over-generalizing about this cohort isn’t the solution here. They are very valuable to restaurants, and it’s time that more QSRs figure out how to cater to their tastes and preferences.

What Millennials Expect From Restaurants

This generation—perhaps more than any before it—really cares about where their purchases come from, and that certainly includes food. That’s why farm-to-table has done so well with them, and why chains like Chipotle have learned to emphasize their roots in local agriculture. McDonald’s is suffering partially because they haven’t learned this lesson.

In response to this trend toward savvy consumerism among Millennials, smart restaurants are learning to source their ingredients on a regional basis. For example, fry seasoning is different in California than it is in D.C., based on what is available locally. QSRs need to pay attention to what Millennials are after and find ways to offer organic, locally-sourced and foodie-friendly items on their menus. McDonald’s is also struggling to attract Millennials’ attention because they haven’t gone all-in on mobile loyalty and customer engagement, according to analyst David Palmer. This generation is famously tech-savvy, and they don’t have to be coerced to interact with brands online.

Starbucks, on the other hand, is a good example of a QSR that has led the way with mobile payments. Their app provides an ideal touchpoint with Millennials who like to be rewarded for their loyalty to the chain.

Brands who understand Millennials’ preferences—whether for local food or high tech—will have a significant advantage going forward.

How to Market to Millennials

Another area where we are starting to see a trend with Millennials is around how they prefer to be marketed to. Of course, it makes sense that the generation that grew up in front of the computer has significantly different preferences around marketing. For example, in-your-face traditional marketing (think billboards and TV spots) don’t work as well on this group.

Story-based marketing like Chipotle’s campaigns are much more effective. And companies like Red Bull have learned the benefits of indirect advertising via sponsorships of cool, on-brand events.

So what do you need to know about Millennials to market to them effectively? This FoodServiceWarehouse post explains:

  • They are ethnically and racially diverse: In fact, they’re the most diverse generation in the history of our country, with 41 percent falling into the “minority” category.

  • They care about community: Socializing is an important aspect of how and why Millennials dine out. They like to feel comfortable and welcome to hang out for longer periods of time. Restaurants should recognize this.

  • They’re tech-savvy: As we mentioned above, Millennials are very comfortable with technology, particularly mobile technology. Keep this in mind as you develop marketing programs.

  • They’re snackers: More so than other generations, Millennials patronize restaurants during off-peak hours for a light bite. You’d be wise to offer special promotions targeting this behavior.

Millennials and the Restaurant Workforce

Additionally, as we wrote about here, teens are spending less time working at fast food and restaurant companies. There are more jobs available in the industry, but increasingly it is older workers who are filling them. The iconic image of the burger-flipping teenager is no longer much of a reality in the U.S.

Instead, teenagers have gotten serious about college and are looking for jobs that will pepper their resumés, not just put a little change in their pockets.

This has been a real challenge for QSRs, who historically relied on younger workers as cheap, reliable labor. Today, turnover for hourly employees as well as managers in restaurants is increasing steadily, since people are looking for jobs that have better long-term prospects.

That said, smart chains like In-n-Out and Chipotle are doing a good job of offering opportunities for advancement to workers. If you want to draw in this younger generation with the hope of keeping them on for a career, it’s a good idea to take a page from these QSRs’ books.

What’s Next?

While it’s always dangerous to over-generalize about huge groups of people, familiarizing yourself with the broad-stroke characteristics and preferences of the Millennial generation can help give your QSR an edge. Knowing what to offer, how to market to them and how to attract them as workers is a very solid investment in your own future.