Eateries go to various lengths to improve customer satisfaction. The strategies are almost as plentiful as there are dining locations in the U.S., which now totals north of 1 million, according to the National Restaurant Association. While some may overhaul their menu offerings, others focus on quality assistance, offering services that their clientele might be especially receptive to, such as pay-at-the-table or family-oriented activities that make wait times seem less lengthy.
But outside-the-pizza-box strategizing restaurateurs may want to consider expanding the types of payments they accept from their customers, specifically those who are members of Generation Z. Several analyses suggest today's young people - who are already in the workforce or soon will be - use mobile payments far more frequently than their predecessors.
"Anyone born in 1995 or thereafter falls in Generation Z."
Who is Generation Z?
Generally speaking, members of Generation Z include anyone who was born in 1995 or later. This means the oldest individuals who fall under the Generation Z banner are either in college or just entering the workforce. For the most part, though, Generation Z individuals are still in their teenage years.
Perhaps because Generation Z has grown up in an age where mobile devices are ubiquitous, several analyses suggest that they're far more likely to not only use mobile payments but trust that they're reliable. Indeed, according to a 2016 study conducted by GfK, 18- to 24-year-olds are two times more likely to make a mobile payment compared to the typical individual in the U.S. More specifically, a majority of Generation Z respondents said they had made a mobile payment within six months of the poll's analysis, compared to just 14 percent for baby boomers, or those who range between around 50 and 70 years old. Baby boomers are the least likely to utilize mobile payments, less so than 25- to 34-year-olds - millennials - and 35- to 49-year-olds (Generation X).
With Gen Z more likely to use and trust mobile payments, retailers need to invest in the relevant hardware and software.
Tim Spenny, GkK vice president of financial services, said mobile payment use has become increasingly popular since first becoming commercially available and as the technology has advanced.
"In 2016, we saw mobile payments gaining traction through the addition of benefits such as rewards, discounts, and coupons that are integrated into phone payment systems," Spenny explained.
Mobile payments use increasing
Based on analysis performed by Blackhawk Network, mobile wallet use rose 8 percent in 2016 compared to 2015. And among those who took advantage of peer-to-peer payments, 80 percent said they used this purchase method more often than they did in 2015.
But it's Generation Z, in particular, that appears to be driving the mobile payment train, not just in the U.S., but in other parts of the world as well. For instance, according to research conducted by Moneymailme, a money transfer mobile app, nearly two-thirds of 18- to 25-year-olds in the U.K. use mobile wallets regularly, monthly business magazine FiNTECH reported.
"Generation Z spent $78 billion at restaurants in 2016."
These kinds of numbers suggest business owners of all stripes would be wise to adopt an mPOS system that accepts mobile payments, but it's especially worthwhile for the dining establishment industry. As reported by Restaurant Insider - based on consumer trend data from Technomic - $78 billion in revenue that restaurants made in 2016 came from Generation Z. Furthermore, much of Generation Z's patronage was made possible by their frequent use of mobile devices, from splitting checks to posting customer reviews or seeing what dishes are available for eateries with online menus.
Kevin Valdez, co-founder of a restaurant fundraising resource firm called GroupRaise, said it's all about simplicity for Generation Z, and a way of going about this is through the implementation or expansion of consumer technology.
"This generation follows food trends they see on social media," Valdez wrote in a guest column for QSR Magazine. "They don't experience a restaurant without their phone - whether it's to place an order ahead of time, read reviews, make a reservation, split the check, or post a post-meal review. Gen Z never experienced the day of walking into a restaurant not knowing what to expect."
He added that utilizing mobile payment technology adds an extra element to the dining experience that young people not only want but have come to expect.