Perhaps the most important lessons one can learn in life are from failure—even better if you learn from the failures of others. The restaurant chain Applebee’s announced last week that it has “given up on millennials.” In response to brand and menu changes they made in the past year aimed at millennials, sales are down by 6% and poor customer experience has risen and as a result 130 of its restaurants will be closing by year end.
Their response is indicative of the problem: they weren’t really committed to a millennial audience. No one is saying that the restaurant business is easy. You are defined by what you’re willing to struggle for. Clearly, millennials did not make Applebee’s priority list of struggles.
And while millennials are an enigmatic market segment, one can hardly imagine a consumer brand writing off so publicly the largest and most influential market segment. It is short term thinking that guarantees long term failure. John Cywinski, Applebee’s brand president, age 54, should know better.
Millennials can smell inauthenticity from a thousand paces. Posers do not warrant re-tweets. It is always the case that companies that try to be all things to all people lose a distinctive identity. And so mid-range casual dining restaurants—what insiders call “Sysco restaurants” (generic sourcing of food for restaurants)—like Ruby Tuesday’s, Friday’s, and Chili’s have all experienced a downturn. There is nothing special about any of these restaurants, no compelling identity, no signature dish, no selfie-worthy experience. Joe Pawlak of Technomic, a food service research firm writes, “Consumers are saying that all these people are offering the same food items, the decors are the same, and also that prices have become very high in these places.” The operative word in this analysis is “same.”
When marketers view a market demographic via its statistical stereotypes they tend to slap on a veneer that is supposed to appeal to the new audience. This doesn’t work with an audience that can see cynically right through the inauthentic veneer. Erik Sherman notes in Inc. magazine, “Statistics and studies can be useful, but the minute you think you’ve got a mathematical formula to please an audience, it’s time for a cold shower, a cup of coffee, and a trip back to the drawing board.”
Consider the rise of Sweetgreen, a restaurant created by millennials for millennials. It touches on all the points that engage millennials from social conscience, a lifestyle brand that incorporates just food, locally sourced that’s healthy, friendly, and doesn’t try too hard. This is what authenticity looks like.
Applebee’s brand in contrast is stuck in the 80’s and is synonymous with unhealthy food, run of the mill options, and nothing that calls on millennials to participate in making the world a better place. It’s a brand in need of a total change. To think that they can go back to it now is corporate suicide.
Millennials prize experiences that are unique, exotic, and photogenic. They prize food that is local, ecologically responsible, relationally delivered, healthy, technologically accessible, and affordable. If Applebee’s gave up their boomer bureaucratic model and empowered millennials to be in charge of local restaurants to explore innovation, it would cut through the crap of sameness that is such a turn off. Of course, this would mean boomer managers giving up power to a younger generation. Exactly, and this is perhaps the real reason Applebee’s has failed. To assume that they can go back to their previous status quo is simply to fail in another way. “Let’s go out to eat. Honey, can you hand me my Metamucil and cane?” is not a winning strategy. What if Applebee’s sponsored a national competition of millennial chefs and turned over half of Applebee’s failing restaurants to them with the promise that they have a year to turn it into something appealing to their generation. There is no shortage of good ideas. There is a shortage of boomer managers getting out of the way. The world has changed. It is time for restaurant owners and investors to read the tea leaves.
Churches, non-profits, and other consumer-oriented institutions would do well to learn from Applebee’s response to their struggles to reach millennials. Doubling down on the past is no way to approach the future.