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Courting Gen Z Through Xtreme Personalization

This article is part of a series in partnership with ISG, a leading global technology research and IT advisory firm. 

Customer engagement at quick-service restaurants has changed drastically. Traditionally, employees could make a significant impact on patrons through in-person interactions. However, the digital focus of the new generation demands seamless experience and extreme personalization strategies. Technological advancements have started playing a significant role in how QSRs operate, interact with customers, and optimize efficiencies.

Gen Z restaurant-goers are not prone to sitting around a restaurant for long periods, and many prefer to order in. With the rise of Gen Z as a prominent customer base, food preferences, habits, and routines are changing. They are digital natives looking for extreme personalization in apps and other digital channels. It is not enough to offer them a seamless ordering platform—this generation looks for tailored features such as customizable menu items, item recommendations, targeted offers, and interactive dining experiences when dining in.

Meeting this generation’s expectations for digital service requires companies to embrace appification and adopt new mobile-first and IoT-based solutions. This can help improve the modern customer experience in two significant ways: by creating seamless, convenient service and improving engagement through digital, customer-focused offerings.

Improving service

“Quick” remains the priority for a quick-service restaurant (QSR). For the new generation, that means a seamless solution for browsing, ordering, and paying for food. Companies that do not prioritize enhancing the customer experience this way may fall behind the competition.

For Gen Z, this takes the form of mobile, app-based ordering, an enhanced dine-in experience, and integrating these with social media platforms. A seamless and convenient experience makes it easier and faster for patrons to place orders and generally streamline the ordering process. Adding the option to place an order in advance can help eliminate the pain point of making customers wait for their meal or avoid long queues altogether.

This kind of contactless experience doesn’t stop at mobile technology. Restaurants have seen similar gains by installing self-service kiosks, improving accuracy and convenience, and lightweight POS or hand-held mobile devices for patrons ordering in person. By opening multiple avenues for ordering, they also reduce the length of lines and, in turn, enhance customer experience.

Boosting Engagement

In today's digitally connected world, social media platforms have become powerful tools for QSRs to engage with customers, build brand awareness, and drive customer engagement. Social media and user-generated content have transformed how QSRs connect with their target audience and influence purchasing decisions.

Rather than passively consume marketing, as in the past, customers use social channels to directly communicate with brands, generating content through photos, reviews, and recommendations. Unlike generations before, they seek out and generate their preferred individual tastes through this engagement.

Restaurants can take advantage of social channels by embracing the personalized nature of it. For example, another hallmark of Gen Z is a growing interest in health and nutrition. Companies can directly appeal to such interests by establishing a tailored social channel dedicated to their menu’s nutritional or dietary information.

Other ways brands can bolster engagement are:

  • Engaging in direct, targeted promotions with focused audiences.
  • Creating new options for personalization in apps or channels, such as allowing customers to build custom menu items or bespoke options.
  • Analyzing customer preferences and buying habits.
  • Getting direct feedback from customers.
  • Developing loyalty programs.

Loyalty programs are a particularly under-valued option in the current market. Among quick-service restaurants, only Starbucks and Chick-fil-A offer a successful loyalty program, even though it is a perfect opportunity for restaurants to leverage the new desire for personalization into customer engagement by creating a sense of exclusivity that resonates with customers.

A well-designed loyalty program can facilitate:

  • Deeper emotional ties between customers and the restaurant.
  • Opportunities for gamification.
  • Driving customers to explore menu items, driving higher order values.
  • Direct, targeted marketing campaigns.

At whatever level companies are interested in developing these new digital channels, the data suggests that the market has broadly recognized their demand. According to a 2022 ISG survey, digital customer engagement programs were a major strategic priority across the consumer industry. Findings included the fact that:

  • 83% of companies were either actively developing or had fully delivered on such a program as a strategic priority.
  • 48% of companies rated it as one of their top three investment priorities.
  • Personalization was specifically recognized, with 77% of respondents identifying it as an extremely or very important customer engagement capability—the second-most cited factor in terms of importance.

In some ways, this is an old issue—every generation develops preferences for interacting with a company. However, the digital interests of this new customer segment demand a unique technological awareness in terms of both platform and strategy to truly capitalize on their expectations.

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