Gong Cha uses kiosk technology to improve Gen Z customer experience

The beverage industry is undergoing change as Gen Z emerges as a major consumer force, especially in the vibrant bubble tea market. Gen Z is digital natives with unique tastes and prioritizes authenticity, immersive experiences, and personalization.

Recent research by customer experience consultancy ath Power Consulting (apc) highlights this trend. Commissioned by the Interactive Customer Experience Association (ICXA), the “On the Record with Gen-Z” study reveals how Gen Z expectations are changing the retail and hospitality industries.

Gen Z survey responses revealed the following:

• This generation wants authenticity.
• Gen Z craves experiences that blend the physical and digital.
• Even basic experiences must be experiential.
• Experiences need to be tailored and customized to meet the desires of the individual, not the masses.
• Rewards programs, when combined with other great experiences, encourage Gen Z to make repeat purchases.

Last year, Gong Cha, the globally popular bubble tea chain, saw a surge in the use of self-service kiosks across its stores across the Americas. While the kiosks were initially introduced to streamline operations, their impact has gone far beyond creating unique and positive customer experiences, especially for younger generations.

The power of user-friendly customization

Rebecca Kahn, franchise operations leader for the U.S. and Canada at Gong Cha. Image: Gong Cha.

The story begins with Rebecca Kahn, Gong Cha's U.S. and Canada franchise operations leader. Impressed by the user-friendly interface and intuitive scrolling of Gong Cha's first kiosk, Kahn noticed distinctive behaviors among Gong Cha's core customer demographics: millennials and Gen Z. Unlike their previous situation, where they struggled to walk customers through complex menus with hundreds of customization options, the kiosks gave Gen Z customers the freedom to explore and experiment.

“The way kids interacted with the kiosk was something I'd never seen before,” Khan told Kiosk Marketplace in a Zoom interview. “They spent a lot of time at the kiosk, playing, scrolling through the different drinks, looking at the different toppings. They got in groups and made drinks together and were really creative.”

Gong Cha is inundated with teenagers after school and on weekends, who often come in groups and congregate in front of the self-service kiosks. Khan noted that many of these groups place a single order at the kiosk for the whole group, allowing them to go through the ordering process together and pay for each other later via contactless payment.

The freedom to try drink options that include unfamiliar toppings directly increased sales: the average transaction at the kiosk increased sales by $1 for each additional option selected, prompting Gong cha to prioritize a broader rollout of the kiosks.

Redefining Relationships in the Age of Technology

The introduction of self-service kiosks was not received without hesitation and criticism. While some may think that kiosks replace human interaction, an interview with Khan revealed a different reality: the kiosks freed up staff to focus on tasks that require human expertise, such as preparing drinks and ensuring cleanliness. This resulted in faster service and less stress for staff.

“A common misconception is that kiosks replace human labor,” Khan said. “Labor isn't eliminated; the kiosks are there to reallocate that labor elsewhere.”

Gong Cha especially knows the importance of maintaining relationships, and Gen Z is aware of that. The company is introducing new strategies to encourage interaction, including touching at the table and a custom drink-serving ritual inspired by tea-making culture. “Serving tea is an act, a ritual,” Khan says. “It's a sign of respect.”

Instead of yelling numbers, Khan writes guests' names on each drink to make passing drinks with intention.

Building Gen Z brand loyalty

The success of Gong Cha's kiosk program highlights the potential for technology to enhance, rather than detract from, the customer experience: The ability to research and personalize your order resonates with a generation that seeks individuality.

“These kids come together. They're all friends. They're looking for a relaxed atmosphere where they can unwind and socialize,” Khan explains. “And they're customizing the drinks they have. I think that really speaks to Gen Z and millennials, who want to express their individuality and uniqueness.”

With plans to install more kiosks and explore data-driven insights from kiosk usage, Gong Cha is poised to solidify brand loyalty among the tech-savvy generation. Khan concludes: “We're on to something good. For the last two years, everyone has been focused on, 'How do we cater to Gen Z?' And I think we're on to something good with these kiosks.”

Gen Z: Craving connection, customization and conscious consumption

According to APC, Gen Z represents a surprisingly well-educated customer demographic and seeks foodservice providers that are value-driven, environmentally conscious and treat their employees well. They also want phygital dining experiences that blend the physical element of socializing with digital options for ordering and customization. Nearly half (46%) of the Gen Z population surveyed cited a restaurant's “commitment to diversity, equity and inclusion” and “demonstration of social responsibility” as “extremely important.” More than half (52%) of respondents rated “acting as a good employer” as “extremely important.”

What QSR and fast-casual restaurants can learn from these findings and Gong Cha's exclusive insights is that while Gen Z has high expectations for quality, service, and customization, above all else, they crave connection, social responsibility, and a phygital experience that reflects their values.