How virtual restaurants can help keep the industry afloat — if done right.
The past several months have proven to be a wildly transformative time for the restaurant industry, as many operators shift to an off-premise strategy, relying primarily on delivery and takeout orders, to remain open. With restaurant foot traffic projected to remain low as tighter restrictions are put into place, smart restaurateurs have adopted a new approach to help them sustain and even grow throughout the pandemic and beyond with ghost kitchens.
Gaining steam prior to the pandemic, the idea of forgoing a dining room and optimizing kitchen space for off-premise sales only is more practical than ever. A new terrain for many operators however, brands need to carefully rethink how they connect and engage with consumers in order for their virtual restaurant to be a success. By taking a new and smarter approach to digital marketing, human capital management and delivery, restaurateurs will be positioned to drive sales despite the challenges presented by COVID-19.
Become a Marketing Maven
Whether you are an established brick-and-mortar restaurant or a new brand launching a ghost kitchen, marketing a digital location requires a strategic approach. Without a brand-friendly decorated dining space or friendly interactions with staff, restaurants need to make the extra effort to reach and engage with their customers, and this can be facilitated through a strong digital presence. Having a basic website or relying on a third-party delivery partner to market a virtual brand is not sufficient.
Paying attention to consumer behavior, the types of customers that will be enticed to try out the new, neighborhood ghost kitchen are tech savvy and more importantly, app savvy. Virtual brands must make sure that as they detach from their physical real estate, their digital marketing strategy is that much stronger through a user-friendly app that can send customers notifications and promos. While restaurants that partner with platforms like Uber Eats and Grubhub are getting exposure through the popular apps, they consequently take away the restaurant’s direct customer relationship and beyond that, intercept the operator’s valuable customer data, preventing them to leverage it for their own benefit.
The Staffing Conundrum: To Continue in Ghost Kitchens
Staffing has always been a challenge for the restaurant industry. Just a couple of years ago, the restaurant turnover rate was a whopping 75 percent, growing year-over-year. Now with COVID-19 forcing operators to rely on a smaller pool of workers, keeping employees long-term is critical for restaurants. On average, onboarding a new employee can cost up to $1,816 per hourly worker.
Toxic turnover will remain a costly problem for ghost kitchens, but embracing employer status can help operators drive loyalty by offering staff the benefits and protections they need – particularly during a pandemic. As COVID-19 leaves everyone’s lives in a constant state of flux, embracing the idea of employee sharing and leveraging scheduling technology can further help ghost kitchens, allowing them to broadcast their open shifts to qualified, available part-time workers. A win-win situation for both the restaurant and the workers, employees can pick and choose when they want to work (an incentive to keep them long-term), and restaurants don’t need to worry about a staff member quitting last-minute or not showing up to a shift, as they’ll always have a pool of workers readily available to fill their openings.
In-House Delivery is Key
It’s no surprise that a smart delivery strategy is vital for ghost kitchens, which rely solely on their off-premise sales. Without having a direct touch base with the customer in-store, restaurants need to carefully consider who they want to serve as their brand ambassador. Since their inception, third-party delivery platforms have helped operators facilitate last-mile delivery, but have just as long faced criticism, as patrons receive cold food, late food and oftentimes, no food at all from the independent contractors. This dissatisfaction is oftentimes displaced onto the restaurant itself but even beyond this major brand hurdle, the services take a large cut of the restaurants’ profits. Brands that use third-party delivery platforms can pay fees anywhere between 15 and 30 percent on orders, a steep cost when delivery is comprising such a large chunk of restaurant sales.
Restaurants that are launching a ghost kitchen facility can liberate themselves from third-parties and embrace native delivery or in-house delivery. By deploying trained, uniformed personnel to bring food to the end consumer, restaurants can have better control of the customer experience and their brand. Without physical real estate, a friendly host at the door and other customer touchpoints, it’s vital that virtual brands place a special focus on making sure the end customer has a pleasurable experience to drive long-term loyalty, and offering native delivery is a valid step in doing so.
Projected to be a $1 trillion global market by the year 2030, according to Euromonitor research, ghost kitchens will continue to grow and serve as a viable way to keep the restaurant industry afloat without any reliance on the traditional dine-in experience. Established operators and new restauranteurs entering the space can reach success by owning their digital assets, embracing their staff as direct employees and forgoing partnerships with third-party delivery platforms.