America’s millennial generation, the roughly 80-100 million people between the ages of 17 and about 35, might be one of the most misunderstood groups by service-oriented businesses.
Despite common refrains that describe millennials as self-involved, entitled or “Generation Me,” the fact is that they are relatively wealthy but frugal, environmentally conscious, no-nonsense, techno-savvy, connected, socially aware, diverse and open to new ideas.
And then there’s this key fact: In the next few years, Generation Y will make up roughly 40 percent of the U.S. population. If you’re in any business, dismiss millennials at your own peril.
Over the next few weeks, we’ll examine some of the driving forces behind their consumer habits and offer some tips on how businesses might become more appealing to Gen Y.
Lots of Spending Power, But Careful Where the Dollars Go
Take a step back and you find the “traditional experience” in the hospitality industry rapidly becoming a thing of the past as businesses adjust to a generation unlike any that preceded it.
Millennials want quality and convenience without the fuss and muss (and surcharges) of upscale living. They don’t care as much about overly attentive waiters or three-course meals when they go out to eat. They simply want to get in, get out and get on with their day.
That no-nonsense attitude is borne of some complex financial realities.
This generation exercises more than $200 billion in direct spending power every year, according to Hanover Research. The Pew Research Center estimates it even higher: $600 billion per year.
On the other hand, Gen Y has inherited one of the bleakest economies since the Great Depression and it owns a combined $1 trillion in student loan debt. According to a 2010 Pew study, 55 percent of 18- to 29-year-olds said they were watching their spending “very closely,” up from 43 percent for the same group in 2006. A 2012 Pew study found 36 percent of millennials still live with their parents.
Other research indicates the group is more conscious of spending on products or services they feel “give back” or are environmentally responsible. According to a global survey last year by the public relations firm Edelman, nearly half of consumers said they buy at least one brand supporting what they consider a good cause every month – a 47 percent increase from the same survey two years earlier.
What It All Means for Hospitality
Quickly translated, all this data means millennials might be willing to splurge on quality, but they are frugal – and mindful of where their dollars are going.
That has helped fuel the rise of fast-casual restaurants. Many Fast Casuals have responded to millennials’ social concerns. Chipotle, for example, is phasing out genetically-modified ingredients, and seems to be picking up customers as a result.
Fast Casuals also have been among the first to adopt leading-edge customer-service technologies that help them deliver the highest-quality, freshest foods quickly and at affordable prices.
One good example is the evolution of table tracking solutions that not only speed service, but also improve staff efficiency while clearing up clutter on tabletops (no more table tents!) and eliminating dining room confusion (no more wandering food runners!). The cashier simply gives each customer a small device that is placed on the table. That device sends that table’s number to a touch-screen display kitchen.
That touch-screen display plays an important role in assuring good service. It shows a running timer on each order. Diners get their food faster and fresher. If they don’t, a manager will know about it promptly.
The end result is a happy millennial. And today, that ought to be a goal for all hospitality businesses.
Find Out More About The Millennial Generation
Complete the form below to download the free eBook, The Millennial Mindset: Reshaping Hospitality, for more detail about why businesses need Gen Y-ers and how dismissing them can be fatal to your business.