The casual dining industry has been falling down the food chain. Restaurant sales overall are expected to reach a record high of $683 billion this year, and limited-service, fast food restaurants have seen decent growth.
But unlike their quick-service counterparts, casual dining restaurants saw growth of less than 1 percent for the third year in a row, according to the National Restaurant Association.
In order for the casual dining sector to climb back to the top, it will have to learn a thing or two from the fast casuals that are winning over consumers, especially the 80 million millennial consumers.
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Generation Y has more expendable income and desire to dine out than any other prior generation. However, gaining their attention comes with a demand for higher quality food, memorable experiences and the ability to co-create with their favorite restaurants.
Millennials don’t want to just eat a meal — they want every meal to be an experience. Millennials are adventurous, tech-savvy and highly social — they want to participate. They will always show more love and loyalty to brands that provide them with memorable experiences. The most successful brands treat their customers like a spouse. Similar with what can happen in a long-term marriage, it’s possible for consumers to fall out of love with a brand when they become bored.
While brand value used to equate functional and emotional benefits divided by price, millennials have created a “Participation Economy,” which has led to a new definition of brand value:
Brand value = Emotional benefits + functional benefits + participative benefits / price.
Participation is co-creation of products and services, customer journeys that start before the meal and often end after the occasion, and marketing. Brands that have high participation are brands that invite millennials into each one of these processes. Many of the most loved brands – Starbucks, Chipotle, Krispy Kreme – create surprising opportunities for millennials to participate and share their experiences with others on social media.
Other reasons millennials are choosing limited-service over casual dining include:
- Innovative menu options
- Fast, convenient service often paired with useful technology
- Better overall value. Customers save money on tipping, get faster service and often have better food choices.
- Increased transparency regarding sustainability and food sourcing.
Casual-dining brands wanting to reclaim their authority in the restaurant space should follow these five rules:
1. Create affordable flavor adventures
Qdoba Mexican Grill, for example, is spicing up its menu with a Mango Mojo sauce for some of its entrees. The sauce features sweet mangos infused with the spice of chili peppers.
2. Introduce alcohol drink innovation that’s shareable in the social space:
BD’s Mongolian Grill, for example, recently launched a summer drink menu that features common drinks but with an Asian twist to connect the customer back to the brand. Instead of a Moscow Mule, the brand is serving the Mongo Mule, made with Prairie Cucumber Vodka, Finest Call Lime Sour and ginger syrup. Another option is the Asian Pear Cooler with Grey Goose La Poire Vodka, Finest Call Sangria Mix, Finest Call Lime Sour and lemon-lime soda. Both make great photo opportunities for social media.
3. Build peer affirmation that connects your physical restaurant and the social space
Last summer, Dairy Queen ran a three-month social media campaign that invited fans to post pictures of themselves eating food or ice cream at Dairy Queen in order to win coupons.
4. Give your secret recipes away on Pinterest
More consumers will choose to enjoy the recipes in your restaurants rather than make them without you. Chipotle takes this a step further and pins recipes it doesn’t serve in the restaurant but thinks its customers will like. Selections include chilled avocado and mint soup, grilled capon with salsa verde, and flank steak fajitas.
5. Integrate technology into the customer journey
The Starbucks mobile app is a great example of connecting with the customer via technology. It not only entices the customer to pay via the mobile app with freebies, it also gives them free songs and games and shows them where their nearest stores are located.
