Millennials are Day Traders™: Starbucks and McDonald’s Get It, Do You?

Posted by: Jeff Fromm

If you’ve recently indulged in the occasional (let’s be honest, daily) cup of joe at your local Starbucks, you’ve likely realized that the coffee giant’s menu continues to expand beyond caffeine-infused offerings. You’ll also notice it is more than the expected breakfast pastry or fruit-and-yogurt parfait. There are breakfast sandwiches, healthy snack options, delicious seasonal salads and wraps, all ready to go by the time your Triple, Venti, Skinny, Vanilla Latte is ready.

The strategically added menu items are helping Starbucks compete with long-time fast food titan, McDonalds. Starbucks isn’t the only one, though. Many fast food establishments have cut GMOs (Panera is one of the leaders in GMO free space), fried menu items are being replaced with local organic options and popular diet trends trump the delicious “golden-arch” fries that millennials grew up on. These fast food companies appeal to this consumer because they understand what matters to them.

1. Convenience Without Compromise

It isn’t a secret that the move toward healthy menu options is largely driven by millennials, even more so, millennial parents who want the best for their children. A Goldman Sachs analyst wrote,

“Starbucks is virtually the only large incumbent that can offer millennial parents the convenience of a fast food chain and food they would not feel guilty/embarrassed to feed their kids”

2. Quality Over Price, Sometimes

Even though they are strapped for cash, they are willing to pay for goods they feel strongly about. Millennials Are Day Traders™ and will trade up and pay a premium for the brands they deem worthy but will trade down elsewhere to save a few pretty pennies. Locally sourced, organic ingredients alongside gluten, dairy and soy free menu items are now the norm. While they don’t have the disposable income of their parents, this group is willing to spend more for healthier items if it doesn’t break the bank.

3. Change is nothing to be afraid of

“Cookie-cutter” environments that the boomer generation longed for, and came to expect, now find themselves struggling to compete with the growing trends following millennial consumers. Millennials embrace and welcome change. A changing menu will attract this group and innovative changes will be the envy of every fast food giant in the marketplace. As we know, healthy food choices can now be seen on every fast food menu. Customizable dishes were made popular by Chipotle and are now being tested by all of the big names; McDonald’s, Pizza Hut and Taco Bell, just to name a few.

4. Inspire flavor adventures and experiences

6928307963_075218b8dd_oSixty nine percent of millennials consider themselves adventurous and have a constant yearn for adventure, even when it comes to the food they eat. They are looking for dining experiences, not just a meal. This can be tough for fast food restaurants since the experience time is shortened, but it is possible. Food trucks are on the rise, offering exotic food pairings on the fly. McDonald’s restaurants are giving locations a makeover by getting rid of the kid-focused indoor playgrounds and creating a more “millennial” environment. Starbucks and other lounges offer free Wi-Fi so customers can maintain their constant connection.

5. Passion For Their Values

More than 50 percent of millennials make an effort to buy brands that share a similar value set or support causes and organizations they have in common. They are twice as likely to care if their food is organic than non-millennials. Day-to-day purchases and interactions are driven by their beliefs and causes, leaning toward companies that support what matters to them. Whether it is healthy food choices, local charity partnerships or employee equality, fast casual chains that inherently mirror millennial values will have the power to motivate these customers.

So what does the mean for the food industry?

Focus on their needs

Rising popularity of fresh, healthy food choices is showing no sign of slowing. Fast food chains will need to keep the focus on the needs of millennial consumers without jeopardizing speed and convenience.

Innovation will be key

Millennials are on the move and have the power of information at their fingertips. Offering competitively priced products that fit the needs of their lifestyle and provide a unique experience in the process is not a luxury, but rather a necessity. If you don’t offer what they are looking for, it will be easy to find someone that does.

Embrace overlap

Consumers that fall in the millennial target are key to the fast food industry because they have the power to become lifelong consumers for brands. Millennials are currently a generation that is 80 millennial strong and controls $1.3 trillion in direct spending power. On top of that, the values and habits of millennials are showing up within boomer populations as consumers who may not be defined as millennials by their age are embracing the Millennial Mindset®, who also value healthy food options. Because of this, an opportunity exists to capitalize on the overlapping mindset between generations.

Photo via Flickr: Jan Viriden

About Jeff Fromm

Although not a Millennial as defined by his age, Jeff Fromm is the Millennial Marketing Guy. Jeff is President of FutureCast, a marketing consultancy that specializes in Millennial trends, and is a contributing writer at...See Jeff's full bio.