Every medium has a purpose. TV advertising, for example, targets consumers who because they can watch television suggests there are certain demographics, mainly affluent and educated enough to be sold an idea or a product. It sounds cynical and discriminatory but that is essentially marketing – to separate a specific group of consumers that are prospects for a vendor.
Sometimes referred to as segmentation, marketers have discovered the value of tools like analytics, data mining and, more recently, machine learning and artificial intelligence, to shift through customer data and match a product to a specific segment of the customer universe.
However, according to GlobalData, consecutive challenges from COVID-19 to rising inflation, understanding and micro-targeting key demographics is fast becoming a significant investment area for food service providers, especially regarding younger generations.
The influx of era-defining global developments has dramatically shifted consumer behaviour; consumers' digital literacy has dramatically accelerated, and at-home lifestyles continue to develop post-COVID-19’s peak. Combine this with the ongoing cost-of-living crisis, and it is increasingly evident that food service brands must target specific consumer groups to get ahead.
Ramsey Baghdadi, a consumer analyst at GlobalData, comments: “When it comes to engaging with specific consumer groups, younger generations are becoming more important for food service companies.
He added that in GlobalData’s company filings analysis, there was an increased focus on Gen Z and millennial mentions. As younger generations are leading users of technology, it’s vital for brands to use digital platforms to target younger consumer groups.
Case studies
Companies are focusing on urbanised solutions to tailor to emerging consumer behaviours. For example, Panera, which was launched in 2022, has digitally focused bakeries and coffee shops to suit the urban lifestyle. Companies are also engaging with younger generations such as Gen Z through various strategies to build brand-consumer trust. Finally, brands kept things local to tailor to cultural influences.
An honourable mention is Starbucks’ efforts to localise its ambience. A recent example took place in South Korea, where it has been launching community outlets that have a locally inspired design. The brand also recently displayed efforts to specifically target Gen Z consumers in the US through non-fungible tokens (NFTs), powered by Web3 technology, as an extension to its Starbucks Rewards app.
“In terms of trend relevance, the demand for demographics is worldwide. According to GlobalData’s survey, all regions over-index the demand for products/services to be tailored to their needs and personality. The survey also shows that a notable proportion (43%) of global consumers actively look for products that are tailored to their region and culture and find this aspect essential in their search,” said Baghdadi.
Regarding cultural influences, leading players in fast food are adapting their US-inspired menus to local audiences. Some honourable mentions include the Pizza Rice Bowl from Domino’s in Japan, Hot dry Noodles from KFC in China and McDonald’s Japan’s Tsukimi Burger and McShake. These locally-inspired dishes could help the brands stand out in a competitive environment.
“To thrive in the current challenging competitive environment, brands should adapt their services to align with changing social lifestyles, whether that is for on-the-go consumers in urban settings or becoming stationed more at home.”
“Most importantly, they should celebrate specific consumer groups through culturally-inspired menu items. This would also interest younger generations that are drawn to exotic ingredients and are curious to learn about other cultures. If micro-targeting strategies are not effectively implemented, food service providers will witness a bleak future ahead, as brands will find it more difficult to gain market share,” concluded Baghdadi.
