Research
Shows Gen Z Welcomes Loyalty Programs, Sharing Data
Gen Z and
millennials may be coming into their own, but those aged 18-43 differ markedly
from both Gen Xers and baby boomers when it comes to restaurant habits, and
attitudes toward loyalty programs.
A recent
survey of 2,000 adults conducted by OnePoll indicates 41% of Gen Zers
and millennials suffer "menu anxiety" when ordering from a restaurant compared
to 15% of Gen Xer and baby boomers.
Meanwhile, an incogni survey of
1,000 adults indicates Gen Zers are more into loyalty programs than their
elders, believing they save significantly through such offers.
Gen
Z's Unique Characteristics
McKinsey
Quarterly noted Gen
Z will make up more than a quarter of the global workforce by 2025 and members
of this cohort have different ideas about compensation, career development,
workplace flexibility and purpose than employers encountered with earlier
generations.
Gen Z is far
more concerned about hostile work environments, mental health, access to
transportation, physical health, the inability to show who they truly are and
an easy commute. They also don't want to just fit in, willing to spend on
luxury items if that will make them stand out. The cohort puts much more stock
in social media than other types of influence even though it has taken a toll
on mental health.
Talker.news noted that OnePoll's survey found
nearly half of younger Americans (47%) often wait for others to place their
restaurant orders so they can see what the meal looks like and nearly a quarter
(24%) said they always check the menu before going to a restaurant.
Taste and
cost were the most important factors in meal selection, followed by time needed
for preparation, whether the meal would be messy and the environmental impact,
the last of major concern to a fifth of Gen Z and millennials. The "vegan" and
"vegetarian" labels were a big draw for younger Americans (39% and 34%,
respectively) compared to 15% and 17% of Gen X and baby boomers.
Looking
for Loyalty
Some 90% of
businesses currently offer loyalty programs and reap the benefits of gathering
user data, which then is sold to third parties, incogni noted. Of three of the
12 loyalty programs examined — McDonald's, Starbucks and H&M
– McDonald's was the best deal for consumers, offering a 20% return, while
Starbucks returned 4.6 cents for every dollar spent and H&M returned $2.50
in store credit.
Perception,
however, is everything.
"There seems
to be a disconnect between how much people think they save versus how much they
actually do. The bottom line: Consumers think they save $56 [average] but would
really have to spend hundreds — sometimes thousands — of dollars a month to
reach such savings," incogni said in a blog post.
incogni
estimates you would need to spend $1,200 at Starbucks and $281 at McDonald's to
save $56 a month. Gen Z respondents thought they saved $58.90 a month while
millennials thought they saved $57.10.
Gen Z and
millennials were most comfortable with sharing their personal data, including
sensitive personal information, geolocation, biometrics, electronic network
activity and identifiers. Food Institute Focus
Spice It
Up: Burritos and Hot Chicken Are on Fire
Restaurant
chains specializing in spicy offerings are gathering steam in 2023.
Case in
point: Dave's Hot Chicken, which grew from two locations to 118 over the
past few years, saw May 2023 visits increase 126.6% year over year. Bubbakoo's
Burritos, a New Jersey-based Tex-Mex chain, saw its May 2023 visits grow
nearly 8% year over year.
"Spicy
chains like Bubbakoo's Burritos and Dave's Hot Chicken are winning over
customers by leveraging the addicting nature of spiciness," Stephan Peng,
CEO of hot sauce company Redbloom, told The Food Institute. "As
the world becomes more interconnected, people are becoming more adventurous and
exploring global cuisines that are inherently spicy."
Flavors like
Thai, Sichuan, and Mexican appear to be as popular as ever, judging by data
from Placer.ai's recent report on five fast-growing dining chains.
Bubbakoo's Burritos, which blends Asian and Mexican flavors, proves as much.
The nearly 15-year-old chain, which is enjoying continued expansion on
America's East Coast, has seen its foot traffic increase in a year-over-year
comparison every month of 2023 so far.
The ascent
of Dave's Hot Chicken has been nothing short of meteoric. Its founders started
the chain in a California parking lot in 2017 with little more than $900,
according to Placer.ai. One of the chain's backers includes accomplished
Hollywood producer John Davis (of Dr. Dolittle and Predator 2 fame). Seizing on
consumers' growing demand for spicy chicken, Dave's has 70 new locations
planned for this year.
Other brands
listed among the fast-growing chains included Cooper's Hawk Winery &
Restaurant, Killer Burger, and Jinya Ramen Bar. But, above
all else, Placer.ai's research showed that America's desire for spicy dishes
shows no signs of slowing.
"When you
eat spicy food, your body responds to the heat caused by capsaicin – the
compound that makes peppers hot," Peng said. "This prompts the brain to release
endorphins, which are natural painkillers that give us feelings of pleasure.
This endorphin rush can be addictive, leading people to seek out the experience
again and again." Food Institute Focus
Analysis: Are "Virtual Brands" at Death's Door?
The recent
struggles of MrBeast Burger – currently available at more than 2,000
restaurants – could be an ominous sign for all virtual brands.
Ubiquitous
YouTuber MrBeast, aka Jimmy Donaldson, wrote multiple statements
in frustration late last week, claiming he is "moving on" from MrBeast Burger,
the delivery-only restaurant brand he created with Virtual Dining Concepts.
"The problem
with virtual brands, and ghost kitchens specifically, is that it's harder to
keep a level of consistency with the quality of the product across multiple
sites," Kay Gowrinath, CEO at Xquisite Productions, told The
Food Institute.
Donaldson
posted on Twitter that he'd prefer to focus more on his snack brand,
Feastables, as noted by Restaurant Business. The statements appear to
leave MrBeast Burger with a rather murky outlook. The virtual brand launched in
2020, promptly went viral thanks to MrBeast's millions of online followers, and
made $100 million in revenue from its inception in December 2020 through July
2022. Yet, MrBeast Burger often suffered from negative reviews that complained
of salty, overcooked, or soggy food, reported nrn.com.
Last week
Donaldson said he'd like to shut down MrBeast Burger "but the company I
partnered with won't let me stop even though it's terrible for my brand."
"Ghost
kitchens like MrBeast Burger have caused significant disruptions in the
traditional restaurant industry by leveraging technology and delivery platforms
to create virtual-only brands operating out of shared commercial kitchen
spaces," Gowrinath noted. "Virtual brands cater to evolving [consumer] demands
by providing a wide variety of food options, affordable pricing, and quick
delivery."
MrBeast
Burger is distributed by several different restaurants that are licensed to
cook and sell its food for delivery or pickup only. The concept allows those
restaurants to use the additional online storefront to generate extra revenue,
as noted by Restaurant Business.
But quality
control (along with waning consumer demand for delivery) has become worrisome
for virtual brands. Nextbite, one of the leaders of delivery-only
concepts, sold itself earlier this month, shortly after laying off many of its
staff, according to multiple reports.
"The biggest
downfall of virtual-only brands," Gowrinath said, "is logistical difficulties –
and for virtual brands that rely on physical product delivery, logistics can
pose a significant challenge.
"Managing
online platforms, logistics, order fulfillment, and customer service in the
digital realm requires efficient systems and processes," the branding and
marketing expert added, "meaning virtual brands need to invest in robust
technology infrastructure, customer support capabilities, and effective supply
chain management to ensure smooth operations." Food Institute Focus
