There is perhaps no better sign of the times than Taco Bell’s new Cantina concept replacing a Radio Shack in Chelsea, New York. We’ve known for many years now that technology is so pervasive, we no longer need physical stores to buy it. The buying habits of Generation Z, the generational cohort of people born between 1995 and 2010, are not so obvious. In the sections below, you’ll find a few ways your quick service or fast casual restaurant can prepare for this newly emerging generation, which is quickly gaining the spending power and cultural influence to overtake Millennials in the next decade.
Make Sure Your POS Software is Gen Z-Friendly
According to Guy Yehiav, CEO of Profitect, a business intelligence company, 44% of Generation Z will work in retail and grocery stores as their first job. They have less patience for planning and executing tasks that could be automated, with 65% of them describing spreadsheet reporting as inhibiting their progress at work. Having intuitive, easy-to-learn software is crucial for Gen Z workers. In a 2018 survey, LinkedIn found that 74% of business leaders expect to change their learning and development programs to appeal to this new workforce.
Since Gen Z is the first cohort to grow up fully immersed in technology, they will automatically favor cloud-based point of sale systems with customizable touchscreen interfaces like Brink POS as employees. After using Google Docs and Gmail at home, the next generation of employees is used to seeing updates in real-time and having unlimited storage at their disposal, whether they are collaborating on a research project in college or using a tablet to cash out customers at their first job.
Capitalize on Off-Premises Dining Trends
Delivery is expected to grow at 3 times the rate of in-store revenue over the next 4 years, and cloud or ghost kitchens are a necessity for capitalizing on this trend. Cloud kitchens are shared spaces that receive and produce delivery orders exclusively for the restaurants that rent them. They are typically windowless warehouses with a smaller workforce than kitchens in QSRs or fast casual chains, which translates to a faster return on investment.
As customers, Gen Z expects brands to develop solutions to adapt to their habits. If their favorite QSR is not offering delivery, they are more likely than previous generations to switch to an alternative that meets their need for convenience. While a full restaurant costs $1 million, a cloud kitchen costs $25,000 to rent as we reported in this previous blog post – making experimental concepts easier to test out and established brands less weary of investing in delivery to appeal to changing consumer behaviors.
Another trend in off-premises dining is ordering through voice-activated commands. Amazon’s Alexa currently has 164 skills that can allow it to order anything from pizza and coffee to Thai food. Cloud-based POS systems that can adapt to new technologies like this will help to future proof your restaurant, as a software update is easier and often cheaper to make than a full hardware upgrade.
Personalize the Experiences Your Brand Delivers
With 32% of the world’s population, members of Generation Z are expected to outnumber Millennials by the end of this year. QSR and fast casual brands cannot afford to miss out on capturing the nuances of this cohort, which differs from Millennials. According to a study by Ernst & Young, only 30% of Gen Zers value loyalty programs, compared to 45% of Millennials.
Gen Z expects a seamless user experience and frequent updates to apps and product offerings. Taco Bell earned their loyalty—however ephemeral—by focusing on functionality. In October 2014, Taco Bell launched the first mobile app that allowed for both ordering and payment. What really captured Gen Z’s interest, however, was the ability to customize any menu item with a wide range of ingredients. This allowed vegans, vegetarians, and meat lovers alike to change the same product offering to suit their dietary needs.
Taco Bell also started its own clothing line in conjunction with Forever 21 back in 2017, selling out in a matter of days. The brand’s “Cheesiest Billboard” in Toronto dispensed nacho cheese onto anything its customers wanted in January 2019. They even had their own hotel for a short period of time earlier this year. What each of these seemingly different ideas have in common is their appeal to Gen Z’s experience-driven mindset, as they each create Instagram-worthy moments.