Writing for Business Advice, Nick Hucker, CEO of digital ordering platform Preoday, takes a look at the spending power of younger consumers and why building millennial loyalty may become crucial.
Let’s face it, it’s been a terrible start to the year for some of our best known and, supposedly, biggest high street brands. From retailers like Toys R Us and Claire’s Accessories, to restaurant chains including Prezzo and Jamie’s Italian, 2018 is shaping up to be a tough market. In fact, according to government data, at least four restaurants are closing every day and nearly 1,000 restaurants shut in 2017, an increase of 20 per cent on a year earlier.
Exactly what must be done to survive the downturn is unique to the individual business. However, there are certain steps everyone can be taken to maximise revenue and boost the odds of survival.
In particular, 2018 is the year that companies need to focus their attention on the purse-wielding millennial; knowing how that group reacts and responds to your brand is about to change from being important, to being essential.
According to analysts, this year the millennial will have more spending power than the baby boomer. Now, after years of preparation, this tech-led group will finally dominate the consumer market.
In this article we look specifically at the restaurant market, however the themes discussed have relevance to the retail and entertainment industries as well.
According to research by American Express, millennials expect greater personalisation in their interactions with businesses than those that have come before them. If they do receive this then they are more likely to be brand-loyal than any other age group, a reason in itself to strive for a more personal service this year.
In order to provide the expected level of personalisation, it is essential that businesses gather and utilise customer data; remembering a customer’s face and their favourite order is not enough.
The question is, how can that data be collected? One way restaurants are managing it is by launching their own online or mobile ordering systems. These keep the data of the customer, including order spend, frequency and meal preferences: all information that can be applied to take customer marketing to higher level of personalisation.
Supporting this is another survey, reviewing millennials that eat in pubs. It showed that 32 per cent would like to receive personalised deals based on previous purchases to their mobile and that this rose to 42 per cent in 25 to 34-year-olds.
We’ve touched on it already, but loyalty is a vital component of business success. A survey by loyalty and engagement company Crowdtwist found that millennials respond well to loyalty programmes and that they see them as one of the biggest drivers of brand choice.
If you’re going to launch a fresh loyalty programme, think about taking it mobile. At 13 per cent, millennials are more likely than older generations to interact with a rewards programme daily – especially if it’s mobile-based.
That mobility makes it easy to engage with your audience at any time, and (hopefully) gives you, the operator, an opportunity to introduce personalised elements. Starbucks’ app is a great example; it contains a fairly traditional point/reward system, but also includes personal touches such as “just for you” new products to try.
A final yet important way in which companies can build a loyal millennial following is through clear and authentic brand communications. Keeping millennials brand-loyal requires a company to act authentically and share its values openly. If a customer feels connected to a brand’s ethos and messaging, they will not only spend with it, but they’ll encourage others to do so too.
The millennial generation places more importance on the atmosphere and wider offering of a restaurant than previous generations. Only those venues that continue to capture the attention and interest of the consumer will be able to thrive in this current market. To do this they need to provide something different and innovative. That differentiation won’t just be physical – interesting food and convenient, branded technologies and apps can all be used to set a restaurant apart.
Research from Continuum found millennials want their food to be prepared for both “entertainment and the promise of freshness.” Food and the surrounding venue must excite all the senses, appearing novel, interesting and yet, authentic. It’s possibly why certain chains, like Turtle Bay, Honest Burger and Dishoom, are doing so well – because they offer something “different” in the eye of the consumer.
Businesses need to take millennials seriously. They are not ‘just another group’, they differ greatly from their predecessors and it’s only by recognising this and adapting that restaurants – and retailers – are going to survive.
Saying that, we mustn’t forget that other generations do still exist, and their custom shouldn’t be ignored either. So, to leave with one final piece of advice: no matter the customer, never underestimate the power of the experience, put guests’ enjoyment first and give everyone the great experience they deserve from your brand.
Nick Hucker is CEO of Preoday
Want to really motivate your millennial staff? Move your office as far away from London as possible
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