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Smart operators racing to keep up with tech-savvy youths


It's time to wake up and smell the half-caf cappuccino.

Restaurateurs and marketers alike have focused on aging baby boomers as a principal source of income since that group began to come of age in the 1960s as the largest-ever class of consumers.

But according to demographers, the so-called millennials — a group whose members were teething when MTV was in its infancy — are more than just the wave of the future, they're an ocean unto themselves.

By at least some assessments of the variously defined group's scope and age range, the millennials could comprise more than 80 million people, making them the largest generation in American history. Their spending power appears unprecedented — in part because of the influence they exert over their parents' money.

"A family's decision about where to go or what to do for dinner, whether it's the choice between eating at home or going out, or where to go when eating out, is greatly influenced by teenagers and young adults," says William Strauss, co-author of "Millennials Rising."

He adds: "They are less likely than other generations to perceive going to a restaurant as a special event. Now it's the convenient thing to do."

But convenience isn't the only thing that millennials are looking for. Those consumers, born roughly between the years of 1982 and 2000, are a more discriminating audience than ever before.

"The fast-food industry enjoyed many decades in which it could rely on the tried and true: burgers, fries and shakes," says Nita Rollins, director of thought leadership at Resource Interactive, a Columbus, Ohio-based technology marketing and communications company that recently released a study on "digital millennials."

"The millennials are a bit more sophisticated because of the ease of access they enjoy to information sources," Rollins says.

From the Internet to documentary films, post-Gen-Xers are bombarded with information about food, and for restaurants to appeal to them the message needs to be positive, experts say.

According to the 2006 Cone Millennial Cause Study, 83 percent of millennials will trust a company more if it's socially or environmentally responsible.

"Health food is important to them, but even more important than health is the idea of freshness," says Andrea Ramirez, business development marketing liaison for South San Francisco-based Torani/R. Torre & Co., which makes flavorings for specialty beverages. "Millennials have an interest in food being local, as well as the story that goes along with it. There's a lot of interest in what they can do to be healthy, and understanding where their food comes from helps them feel like it's healthy. They want to frequent places they feel good about."

As the most ethnically diverse group in the country's history, this generation is also particularly interested in exotic cuisines. "People are bringing their experiences with different cultures into the restaurants with them, and they're willing to try new and different things," Ramirez says. "They want high-end flavor, not just bland mashed potatoes."

That desire for bold flavors carries over into their beverage choices as well. Customization is key to these consumers, who are used to having everything their way, right away. "Soft drinks have gone by the wayside," Ramirez says. "They have embraced made-to-order blended coffees, as well as smoothies and other freshly prepared drinks."

As a group with immense decision-making power and seemingly unlimited technological prowess, millennials must be marketed to in unique ways. "Places where the baby boomer may have been are not the same places millennials are," says Mitch McCasland, director of planning and brand strategy for Moroch Advertising in Dallas. "They're going to be more involved in interactive media, mobile technology and gaming. All of these are considered to be emerging venues for marketing to these consumers — even the idea of `adver-gaming,' or putting content into games."

But cutting through the constant barrage of messages these tech-savvy consumers encounter every day — Rollins says that by multitasking millennials cram the equivalent of 30 hours into a seven-hour period — is the marketer's dilemma. Add to that the perception that the generation doesn't like to be marketed to.

"Millennials are careful and scrutinize messages that are sent to them," McCasland says. "They tend not to accept blatant advertising. They would rather be approached with something that fits into their lifestyle."

McCasland recently worked with a McDonald's operator in the Dallas area on a midnight gaming championship to attract young, tech-obsessed consumers. "We looked at their lives and at how gaming in the middle of the night with people across the world is a totally accepted phenomenon," he says. Though the event was held at and sponsored by McDonald's, it was nonbranded to avoid in-your-face advertising. McDonald's is also promoting an initiative to have Wi-Fi in their stores and to allow patrons to play their Nintendo DS, a handheld gaming device, competitively in the stores free of charge, he says.

Even more basic than marketing through gaming is the idea of marketing via mobile phones. "Their mobile devices aren't just an occasional tool. They are intimately tied up with their self-identities," Rollins says. "The obvious place for restaurants to market is on a mobile phone or sponsorship of a text message campaign. It's a great way to tap into their social networking and dining habits to make it even more social. But it's important to not just throw money at the mobile phone channel; millennials filter out ads very easily, so you have to make it an opt-in program."

Allison Gower, president of Houston-based advertising distribution company qtags, helps restaurants design marketing programs to reach the millennials. "For a restaurant trying to reach a slightly younger or more urban audience, mobile marketing is almost a prerequisite of doing business," she says. "At the very least, restaurants should be using texting as a way to open up a connection with their customer. It's a way for advertisers to have a two-way conversation instead of the one-way, `I'm going to tell you about this' approach."

Mobile marketing can be as easy as inserting a keyword-based texting option into advertising materials that will give patrons a promotional code for use in a restaurant. "In your reply text, you can give a promo, a link that takes them to your website, or even a chance to opt into a permission-based alert group," says Gower, who has worked on programs with franchisees of the Popeyes and Red Robin Gourmet Burgers chains. "The key is to make sure that your texting program is providing your consumers with relevant information. If you're just going to send them information about how wonderful you are, they'll opt out."

Millennials' use of technology offers restaurateurs more than just an opportunity to advertise — it opens doors to revolutionary new concepts. While restaurants of every sort are striving to provide wireless Internet connectivity, some are taking technology to the extreme, such as Nolan Bushnell, founder of Atari Inc. and the Chuck E. Cheese's chain, who recently debuted uWink, an adult-oriented restaurant and bar in a Los Angeles suburb.

"Millennials are able to multitask to an unprecedented level, so just sitting and eating isn't enough for them," Bushnell says. "They want visual stimulation, variety, music, images, games, and that's what we provide." Patrons even order on a touch screen — a process that this generation views as part of the game and a stimulating experience.

"We see ourselves as being as much a technology company as a restaurant company," Bushnell says.

As such, uWink doesn't rely on conventional means of advertising, choosing instead the millennials' preferred method: viral marketing. With a running blog, a profile on MySpace and several videos available on YouTube, uWink has positioned itself as a part of the millennial community, hoping customers will spread the good word — at no added cost to its marketing budget.

"We hear so much about viral marketing because people's friends have credibility," Ramirez says. "This generation would prefer to hear a testimonial from someone they know rather than hearing a message from a company that is trying to make money."

As consumers, millennials may be skeptical, but when it comes to working, they are seen as being a particularly trustworthy bunch. "Their long-term capacity for trust is something that hasn't existed since the boomers," author Strauss says. "Millennials will trust their employers, and their employers can trust them. They have a desire for long-term career planning."

That said, fewer millennials leave high school with any sort of job experience than earlier generations. "Because they're a fairly coddled generation, they bring some of the expectations from their parenting into the workforce," Rollins says. "They expect frequent and positive feedback, so if you think it's OK to bring a group of millennials into the workforce and give them their quarterly review — which is more than sufficient for boomer employees — that's not going to do. They need to know with greater frequency and enthusiasm that they are making an impact."

That, Strauss says, goes back to the generation's hard work in school and the notion that it's always working for a grade. The upside of such school-

centered thinking, though, is that millennials are known to be extremely collaborative.

"During their time, education switched focus from competition to [stressing] collaboration and teamwork," Rollins says. "While boomers and Gen Xers feel as though working in a team takes away from their sense of personal achievement, millennials have the mantra, `TEAM: Together Everyone Achieves More.'"

Those multitaskers are a complex group, often returning to the more conservative values of their parents while pioneering in technological fields. Whether they're working on a restaurant's line or eating its burgers, millennials can be counted on to continue shaping the future direction of dining concepts and foodservice marketing.

The question is, can restaurants keep up?

-- Abigail B. Millwood

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