How can restaurants cater to the millennial effect?

There are several studies that suggest that the traditional, sit-down, family-style restaurant might be dying off with the influence of the millennial population. New trends such as online food delivery, app-based and kiosk ordering, etc. are responses to the demand of the millennial. What should restaurateurs do to keep up?

Millennials are spending most of their budgets allocated to food on prepared foods. Because of the demand, the type of real estate occupied by food-and-beverage-operators is transforming.

Old warehouses and manufacturing facilities are now being renovated to host virtual restaurants where little overhead is required—the U.S.’ online food delivery market will reach $24 billion by 2020, so developers are cashing-in.

Virtual restaurants have made the business more economical for restaurant start-ups. With the incentive to earn additional revenue, many restaurants have found it affordable to add amenities to make e-delivery possible such as food prep space, delivery service pick-up hub, and shared facilities such as storage and refrigeration.

But some traditional restaurants have not been able to meet the needs to implement online food delivery. So, what should these businesses do? Millennials want experiences, which is an opportunity for traditional, sit-down restaurants. This group is most likely to spend money on experiences because of something they saw on social media.

David Chang, Chef and founder of Momofuku restaurant group, has some insight to share about millennials and traditional dining experiences as well: “… Millennials like to be pampered, and fine dining is basically a lifestyle: Dress well, look good, enjoy an experience that’s almost like money can’t buy but of course it can. And in America, the prices are certainly good compared to Europe.”

Just as millennials are challenging the traditional dining experience, they could save it. Instead of restaurateurs transforming their business model and conforming to the online delivery and pick-up model, they could focus their efforts on making an Instagram-worthy atmosphere.

Millennials’ use of Instagram while out-to-eat has restaurateurs redesigning their restaurants as 75 percent of millennials value the experience of eating more than they value its nutrition. A restaurant’s active social media presence is good for referrals, too. A survey commissioned by TELUS International and conducted by The Harris Poll found that most millennials would likely recommend a business that has an active social media presence even if they were not initially satisfied with their product or service.

By leveraging Instagram, the traditional sit-down restaurant could remain competitive. Restaurants can be more present than ever before, thanks to the millennial. If your restaurant is struggling to meet delivery needs, maybe that business model isn’t for you. Try catering to the Instagram audience instead.

Jamie Sullivan is the director of restaurants at Core States Group. Since coming to Core States in 2014, Jamie’s 20 years of engineering, management, and sales experience has made him a key player in the growth of the company’s restaurant portfolio. He is responsible for maintaining existing relationships while pursuing new and exciting clients with a focus on quick serve, food courts, cafeterias, fast casual, and fine dining

Consumer Trends, Expert Takes, Feature