Ghost Kitchens weren’t lacking for attention pre-COVID-19. But there was one glaring difference. You could call it trail blazing then. Innovative. Mysterious. Perhaps even timely, depending on the restaurant concept and the market. Yet in the past few weeks, it’s become a near necessity for countless brands worldwide. Even if the concept wasn’t investing in a shared space or cloud kitchen per se, coronavirus forced operators to turn their typical venues into delivery- and takeout-focused spaces that mirrored the notion.
And what that did is force restaurants to address the same kind of questions predating ghost kitchen adoption, like whether or not the menu needs to change for off-premises, what the radius looks like. Details like packaging and delivery apps. What’s the overhead like of running a restaurant that doesn’t serve dine-in guests?
While dine-in will (and is) reentering the picture, has this ghost kitchen flirtation inspired operators across all segments? In other words, will it accelerate one of 2019’s hottest trends?
Andrew Park, VP of CX Strategy and Enablement at customer experience intelligence platform InMoment chatted with QSR about why ghost kitchens were gaining steam in the first place, how to figure out if they work for your restaurant, and whether or not COVID-19 will indeed ignite a movement.
Ghost kitchens have a lot of buzz right now. What makes them so appealing?
Ghost kitchens are a space where meals are prepared and delivered from, but don’t physically have a storefront or a dining room. Because of the impact the current epidemic has had on the ability for consumers to dine out, ghost kitchens have become increasingly popular in the last few months.
They’re a popular option for restaurants because of the lower input and operation costs. Restaurants only have to focus on preparing the meals rather than serving customers and maintaining a storefront or a dining room. Additionally, the real estate costs are much lower because the location isn’t as instrumental and zoning requirements differ.
Not only are family-owned small businesses taking advantage of higher profits and low input costs, but international chains like McDonald’s and Chick-fil-A are implementing this process too.
Ghost kitchens benefit customers, too, whether or not the diner is even aware of the fact that their meal comes from this type of establishment. The lower costs for restaurants means lower-priced meals. However, because the concept is fairly new, it’s essential for these restaurants to consistently ask for customer feedback if they plan to expand the concept or keep customers coming back. While ghost kitchens can save businesses money, without collecting feedback from customers, it will be difficult to evolve the business model to be even more successful.
What is the No. 1 question a restaurant needs to ask itself before actually considering one?
Before considering a ghost kitchen, it's important for a restaurant to evaluate the wants and needs of their customers. Whether you’re a well-established brand considering expansion or conversion, or an up-and-comer trying to find your footing, ask yourself “what do customers value more: the meal itself or the in-person dining experience?” If restaurants are constantly hounded for delivery orders, but they don't offer them, this could be a good opportunity to downsize and focus on perfecting the delivery process for a better customer experience and increased loyalty in the process.
When a restaurant does decide to take this leap, where should they begin? What does a ghost kitchen strategy look like for today’s restaurant brand?
If a restaurant assesses their customers’ expectations and decides they’d like to open a ghost kitchen, a good first step would be to run trial tests at certain locations instead of rolling out the concept completely. That way, restaurants can see the strengths and weaknesses of the business and make appropriate adjustments before expanding.
Each restaurant has a different relationship with their customers, meaning that just because your local competitor’s ghost kitchen is booming, this doesn’t mean yours will. It’s essential to identify what your customers value about your business and make decisions from there. For bigger restaurant chains, maybe one of their locations would benefit from a ghost kitchen with later hours while a different location should continue with a dine-in option. Allowing customers to co-create these experiences builds loyalty with consumers and allows them to feel like they are contributing to the relationship.
How can technology assist and what makes tech so valuable to this endeavor?
Because ghost kitchens have no face-to-face contact with consumers, it’s essential for the establishment’s survival to properly utilize customer feedback technology to understand how the business can improve.
Voice of customer (VoC) tools can help brands organize and extract insights from their customers—helping them capitalize on what will make them most successful. The most innovative tools allow businesses to create conversational feedback opportunities allowing the customer to tell their story through voice, video and image. By understanding your customers, including what differs among them individually, you can offer more personalized experiences that will increase spending and brand loyalty. This includes personalized coupons based on past orders, capitalizing on what consumers prefer (such as meal presentation or delivery speed) and more.
How can restaurants leverage their employees in order to ensure their ghost kitchen is a success?
While customer feedback is crucial, most brands ignore the largest, richest source of customer feedback. Front-line employees live the customer experience every day. They have unique insight into the customer experience as they are the ones talking to customers day in and day out. Employees can easily identify customer pain points and point out solutions because they so often see them first hand. When businesses are in the planning stages, they should ask their employees: what are current customer challenges and what do they anticipate new challenges of a ghost kitchen will be? For example, if the restaurant’s website is slow to process online orders, that will be crucial to resolve when pursuing a ghost kitchen. Once the ghost kitchen is well underway, check in regularly with your employees and encourage continuous feedback to maintain an evolving, yet healthy business.
Do you think ghost kitchens might take off during the pandemic or after?
This pandemic has and will continue to change the way that consumers interact with brands and the long-term impact is yet to be determined. However, in a time of social distancing and escalated concern for health and safety, ghost kitchens provide opportunities for restaurants to provide value to consumers while limiting risk. Restaurants that currently operate ghost kitchens are likely reaping the benefits of this decision. Consumers are continuing to show their desire to support the brands they love during this time and ghost kitchens provide a way to fulfill that while keeping consumers safe. The most important thing a brand can do during this time, and coming out of the pandemic, will be to stay close to those customers by giving them a voice. If a brand is on the fence about providing this type of offering, all they need to do is reach out to their customers and ask. Those brands that continually listen and act on the feedback their customers provide through this unprecedented time will come out much stronger brands with strong customer loyalty.
How has the crisis accelerated some of the trends we've spoken about?
Because of the pandemic, restaurants are being tasked to quickly design, deploy, or perfect their curbside pickup and delivery experiences all while customers' lives are more disrupted than they have ever been. This can lead to customers who are less forgiving and more critical of issues as they happen. Whether it’s slow service that results in cold food, rude drivers or incorrect orders, one misstep could send customers looking for other options—and with apps like GrubHub and DoorDash, it’s easier than ever to find a new restaurant to try.
It’s imperative that restaurants are constantly asking for feedback from their customers. As these new delivery methods have quickly become the norm during this time, there is a lot of room to either get it right or wrong. Customers will guide you and let you know how you are executing. They will also give you ideas that could improve the experience. Also, most brands forget that the richest and most valuable source of customer experience knowledge resides with their own frontline employees who deliver that experience every day. Make sure you capture feedback from your employees and customers and use those insights to improve offerings and quickly fix any issues to build stronger relationships with your customers and keep them coming back in the future.