Forget millennials. Not that I'm suggesting it, but that's what Applebee's said this week. Enough is enough. They're taking their sriracha and going home to the people who love them.
It's a bitter time for the casual dining and fast food industries. They face competition from the most unlikely of places, like Ikea. (At least they don't sell you a meal in a box and make you assemble it yourself, like one of those ingredient-and-recipe tech companies.) And they're getting no love from millennials.
Applebee's is taking a stand. If millennials won't love them, they won't love millennials.
Here's how John Cywinski, Applebee's brand president (the chain is part of DineEquity), put it in an earnings call, after saying the chain had "a rather high percentage of guests not [satisfied] with their experience":
Now, let's shift attention to our guests and perhaps one of the brand's strategic missteps. Over the past few years, the brand's set out to reposition our reinvent Applebee's as a modern bar and grill in overt pursuit of a more youthful and affluent demographic with a more independent or even sophisticated dining mindset, including a clear pendulum swing towards millennials. In my perspective, this pursuit led to decisions that created confusion among core guests, as Applebee's intentionally drifted from its -- what I'll call its Middle America roots and its abundant value position. While we certainly hope to extend our reach, we can't alienate boomers or Gen-Xers in the process. Much of what we are currently unwinding at the moment is related to this offensive repositioning.
Let's go out to eat. Honey, can you hand me my Metamucil and cane?
We shouldn't laugh. Oh, heck, why not? But, seriously, we really shouldn't laugh because this is a problem many businesses eventually face. You've focused on a group of people, maybe it was deliberate or perhaps they were your local customers, and now they're getting older and the next generations might not be anxious to do business where Gram and Gramps go.
For Applebee's, a shift back to older basics means a renewed focus on all-you-can-eat and 2-for-$20 specials.
Wait, millennials don't like all-you-can-eat? What's wrong with kids these days?
Many people, whether millennials, Gen-Ys, or boomers, will find the Applebee's experience to be less substantial than before because their local ones will close. (That will be up to 135 Applebee's and, yes, 25 IHOP -- also owned by the company -- locations.) Some are in areas that once were busy but no longer are. Others are in what should be reasonable areas but are underperforming.
Walking away might be fine for a larger company, although you can imagine how the franchise owners might react to hearing that they're being put out of their misery. Smaller companies may find they have to reinvent themselves.
That's clearly what Applebee's has been trying to do. But there are two ways to go about this. One is to recreate yourself in a fundamental way that a new demographic will find appealing. That can work, although you may have to create a new brand that lacks the associated baggage of the old. Then you run both, one for sustainable business, the second for growth.
The other way, and the one too often favored by marketers, is to slap on a veneer that is supposed to appeal to the new audience. The essential problem in such a case is that you see people as caricatures. 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.