Catering to Gen Z preferences is no longer a topic to stash on the agenda. According to an article in Forbes, in 2022 nearly a third of 25-year-old Americans were homeowners, outpacing millennials and Gen Xers at the same age. By 2030, Luxury spending is expected to grow three times faster than other generations, per Bain & Company. That would claim a third of market share. The reason this is happening, the consultancy said, is younger generations are entering the luxury market earlier. While millennials began indulging between the ages of 18 and 20, Bain & Company noted, subsequent groups have done so by 15.
It comes down to access, as McKinsey pointed out: Tailored loyalty programs that offer exclusivity; omnichannel connectivity that blends physical and digital sales platforms (phygital); and an emphasis on brand building through events and social media.
Although the article was mainly in reference to luxury brands like Dior and Prada, restaurant dining fits into the conversation as well. Eating out is often labeled an “affordable luxury,” as are those $6 drinks consumers buy on Tuesday afternoons as an indulgent break. The same could be said of delivery, nights out with friends, and more life moments where restaurants promise experiences for a generation that gravitates toward environments to self-brand and connect.
Ordering ecosystem Deliverect recently surveyed more than 3,000 Gen Z consumers to explore generational dining habits, including how and why guests prioritize food from restaurants as part of their budgets.
“Gen Z presents a unique, yet vital, opportunity for restaurants; and as the summer season quickly approaches, restaurant owners need to do what they can to win over Gen Z’s share of wallet,” Deliverect cofounder and CEO Zhong Xu said in a statement. “Building trust and offering delicious food at a fair price is the recipe for success with this generation. In today’s competitive restaurant landscape, understanding Gen Z’s dining habits allows restaurateurs to tailor their offerings and marketing strategies to attract and retain this important customer base. Embracing value for money, leveraging the power of user-generated content, and catering to their desire for convenience, especially on weeknights, are core principles that will help restaurants remain a top spending priority for Gen Z and beyond.”
Returning to the earlier point, Deliverect’s data found dining out and ordering for Gen Z to not be considered a “luxury,” by the term, despite coming of age in a challenging economic backdrop. Outside of rent/mortgage and other household bills, eating out was one of the top spending priorities for Gen Z. In other words, they’re fine spending to eat where some older generations might have viewed the category as a “luxury” easy to cut back.
Where is Gen Z spending money?
- Groceries: 38 percent
- Clothes: 26 percent
- Car payments: 22 percent
- Eating out: 21 percent
- Activities: 19 percent
- Skincare: 18 percent
- Ordering food delivery: 15 percent
Food they’re ordering:
U.S.
- 1. Sandwiches
- 2. Barbecue
- 3. Sushi
U.K.
- 1. Curry
- 2. Noodles
- 3. Sushi
Breaking down spend just on food, it went as follows:
- Groceries to eat at home: 40.48 percent
- Ordering food delivery to home: 29.42 percent
- Eating out at restaurants: 28.07 percent
- Picking up takeout to eat at home: 25.44 percent
- Groceries to eat at work (like weekly lunch prep): 18.32 percent
Deliverect feels there’s opportunity to drive delivery orders among Gen Z diners.
Some thoughts:
Bespoke menus that are only available for delivery. Operators can go a step further by hosting a bespoke menu for those who order direct versus using a third-party channel.
Streamline the menu to acknowledge Gen Z’s shortened attention span compared to other generations. Make it easy for indecisive customers, Deliverect said, by having a more optimized menu to offer. Features like top choices and most-popular or most-ordered items tend to resonate here.
Consider adding a thank you note or coupon or giving away a free add-on as perks.
Packaging can evolve beyond functional to storytelling. Small additions like branded stickers and napkins can create an “unboxing” experience with food on a daily basis.
“Brand loyalty among Gen Z is built on more than just great food—it’s about creating a memorable experience with every order,” said Purnima Bihari, head of product at Deliverect. “From bespoke menus and optimized choices to personalized packaging and speedy delivery, we have a unique opportunity to turn every delivery into a brand-defining moment. By enhancing these touchpoints, we not only capture demand but also foster a deep, lasting connection with guests.”
When dining out, Gen Z most commonly reported dropping between $25–$36. With delivery, a quarter said the same.
How much do you spend when dining out?
- $12–$24: 19
- $25–$36: 21
- $37–$48: 14
Ordering from a restaurant to pick up?
- $12–$24: 28
- $25–$36: 20
- $37–$48: 13
For delivery from an app/online
- $12–$24: 22
- $25–$36: 25
- $37–$48: 14
A sense of foodie self
Seventy-three percent of Gen Z respondents said they considered themselves “foodies.” Half added they’d return to a restaurant—or order again—solely based on taste. For those eateries Gen Z diners return to more than once, cost was cited behind taste as the top driver for frequency at 42 percent. That number increased to 44 percent when it came to delivery.
So they are aware of value, even if they’re willing to spend.
What encourages Gen Z to order from a restaurant more than once?
- Taste of food: 51
- Cost: 41
- Location: 22
- Offers or discounts: 21
- Service: 17
- Cuisine type: 16
- Presentation of food: 15
- Social media reviews: 10
- Dietary requirements: 8
- Environmental considerations: 7
To put it plain terms, Gen Z customers return if they’re getting good value for the money. Quality of ingredients, volume, and special experiences are rated high by this generation. Value-for-money perception is the unlock.
All said, though, offers and discounts rise in importance when it comes to off-premises orders. Forty-two percent of Gen Z respondents in the survey said offers influence their choices for carryout or takeout. In response to how the economic climate has affected dining habits, 30 percent said they actively seek deals and offers; 25 percent reported a decrease in dining out; and 26 percent specified they still dine out but opt for less expensive restaurants. An additional 23 percent said they only dine out when they come across a compelling offer. “This indicates that eating out or ordering online is a constant behavior throughout the week,” the study said, “but that Gen Z constantly look out for wallet-friendly options.”
Deliverect suggested restaurants aim to drive check from Gen Z as they look to add perceived value and appeal. In one example, operators should focus on the upsell and reinforce affordable add-ons that provide value, like extra toppings, larger drink sizes, or dessert deals. Make these upgrades feel like a great deal and, therefore, a small investment into their meal without breaking the bank, the company said.
Another lever is loyalty and messaging, such as welcome-back deals or exclusive intros to new products. Deliverect also highlighted the chance to use functions on third-party channels. Delivery apps and other aggregator marketplaces have started developing features like Uber Eats’ “wallet-friendly” menu tags and “happy hours” to help restaurant better highlight promotions.
There’s the often-combative topic of dynamic pricing as well. Restaurants can adjust to trends, demand, and context to promote alternative approaches to increase conversion. Say a different price on the weekends. Automation tools offer operators opportunity to leverage data and create tailored promotions, too. Picture specific offers at certain times of the day that give restaurants the chance to stay present and relevant.
Getting them there
Nearly all (93 percent) of Gen Z respondents said they consider food recommendations from friends and family more vital than social media influencers.
While the notion a digitally native customer would trust friends and family over social personalities might seem surprising, the latter did come in a close second. Eighty-eight percent of Gen Z respondents said they value recommendations from social media influencers specializing in food and eating out. The number slid a bit (86 percent) for influencers who aren’t tied directly to food.
Based on Deliverect’s research, social media influencers only persuade one in 10 Gen Z respondents to return to a place they’ve already been to.
Finding inspiration for new places to eat was a slightly different picture.
- Social media: 48 percent
- Friends and family: 44 percent
And for the social media platforms Gen Z uses to get the most valuable recommendations:
- TikTok: 70 percent
- Instagram: 65 percent
- YouTube: 41 percent
“With the growing importance of social media for Gen Z, brands need to prioritize building trust and making it easy for Gen Z to engage and purchase on the same platforms they frequent,” said Alex Ioannidis, head of marketing at Deliverect. “Soon, there will be a significant move from using third-party to first-party sales channels, allowing brands more control over the user experience and customer data. This shift will enable brands to provide personalized experiences across the guest’s journey.”
It’s clear Gen Z has become the TikTok generation. An Ad Age/Harris Poll study earlier this year said the platform was viewed by Gen Z as the most trustworthy and reliable source of information.
Deliverect had a few tips to leverage the reality.
1. Tap into the rise of micro-influencers. This has become a growing trend among restaurant brands, and a wide departure from the mascot days of old. Micro-influencers take it a step further from celebrity endorsements. These local and niche creators zero in on a very specific audience. Generally, the people who follow micro-influencers share similar interests and trust the authenticity.
2. Invest in measurement tools to understand the types of influencers and social media posts that perform the best.
3. Find the perfect creator. Simply, connect with genuine fans of the brand who can turn followers into customers.
4. Encourage customers to become brand ambassadors. Gen Z, in particular, is a generation where digitally native tools allow them to become influencers on their own terms. They’re all capable of sharing thoughts and ideas through networks. The more brands connect with those customers and grow the user base, the more the network webs out between people who truly want to share word-of-mouth through a digital megaphone.
5. Meet Gen Z on their preferred platforms by offering delivery from your own social channels.
Deliverect’s broader research on what drives Gen Z’s food purchasing decisions found the group was not influenced by personal circumstances. Whether respondents had children, or not, were single or in a relationship, students or full-time workers, their food-related motivations and spending habits stayed consistent. These factors did pop, however:
Offers and promos were a recurring theme. Deliverect said operators should harness the power of micro-influencers who often have a more engaged audience than famous content creators, as mentioned.
Work from home versus RTO: Only 24 percent of respondents agreed they were more likely to eat out when working in the office—29 percent disagreed and 47 percent were unsure. This was also the case when asked if they were more likely to opt for ordering in when working from home. In sum, Gen Z is undecided.
The generation appreciates staying in. Forty-two percent said they preferred to order in rather than go out on a Friday night (disagree was 22 percent and unsure 36 percent).
Twenty-one percent also noted they enjoy ordering food while doing other activities at home, like gaming or watching TV. Relieving stress was another lead factor, with 20 percent saying carryout and delivery relives pressure from grocery shopping and cooking.
