Ghost Kitchens - Scary Smart or Just Plain SCARY?
You’ve probably heard the terms “ghost kitchens”, “virtual restaurants” or “delivery-only restaurants” floating around lately. For many restaurants, they can offer some intriguing benefits. For example, they offer the ability to cross-utilize ingredients and labor, test out new recipes or concepts, quickly capitalize on trends, boost efficiency, and most importantly – drive revenue. Even pre-COVID, food delivery was growing exponentially, and with nationwide shutdowns, it became a virtual necessity. Existing restaurant brands see an online-only concept as a way to continue to expand their off-premise reach. Major brands like Chili’s, Outback Steakhouse, and even Chuck E. Cheese have been testing out virtual concepts for the last few years, and the trend continues to explode during the pandemic. By focusing on a few simple-to-execute offerings outside of their traditional menu, brands can jump across cuisine or price categories. And with these additional options, a single restaurant can keep guests interested and ordering, and claim a significant portion of real estate on the hyper-competitive Third Party Delivery platforms.
"...they offer the ability to cross-utilize ingredients and labor, test out new recipes or concepts, quickly capitalize on trends, boost efficiency, and most importantly - drive revenue."
Ghost kitchens are also democratizing the restaurant landscape. With fewer startup costs and a shorter time to market, a budding restaurateur can use a shared ghost kitchen facility to launch a brand new concept within weeks – not months or years. Large-scale commercial kitchens like CloudKitchens and GhostLine Kitchens are snapping up real estate across the country with an eye toward continued growth in the market. After seeing thousands of restaurants close during the pandemic, and most others struggling to deal with the high costs of a large brick and mortar, the potential for lower costs and less risk make ghost kitchens an attractive option.
"With fewer startup costs and a shorter time to market, a budding restaurateur can use a shared ghost kitchen facility to launch a brand new concept within weeks..."
Even if you’re not in the restaurant biz – there’s a lot that other businesses can learn from the proliferation of ghost kitchens. Technological features like online ordering and 3rd party platforms, cost-saving measures like cross-promotion, cross-utilization of materials and labor, and marketing strategies like pop-up shops, strategic partnerships, and experiential marketing can be easily applied to other industries. The current wave of virtual restaurants is similar to the rise of web-based, direct-to-consumer brands like Prose Custom Hair Care, Billie Razors, and the plethora of online mattress retailers. These companies are getting their products directly to customers without the cost of a brick-and-mortar location and they’re using digital advertising to closely target the most likely purchasers – at a key place in their purchasing lifecycle.
"...companies are getting their products directly to customers without the cost of a brick-and-mortar location..."
Interested in learning more about how the changing digital landscape can help your business grow? Request a consultation and we’ll get back to you ASAP!
