Phil's field notes

Hi everyone! We’re back with another edition of Phil’s Field Notes, where we talk about the latest trends in restaurants and food delivery. Today we’re covering restaurant revenue trends, an update on the labor shortage, and ghost kitchens.

Black Box Intelligence recently reported that restaurant sales have mostly returned to pre-pandemic levels. However, there’s still evidence that some folks aren’t sure whether they feel ready to return to in-person dining, and traffic is still low.

Black Box believes that the boost in sales comes from the fact that the average dollar amount per check has gone up. We think pickup and delivery are playing a big role in this. We mentioned in last month’s PFN that we’ve seen real habit formation in terms of food pickup and delivery over the last year and a half. And, it looks like that trend is still going strong.

The restaurant industry is still struggling with labor shortages, but we’re seeing some improvements. Here in Colorado, Governor Jared Polis has announced new incentives for Coloradans to return to work. We’ve got our fingers crossed that other leaders will follow suit and that you’ll see a boost in hiring in your area as well.

What’s going on with ghost kitchens?

By now, nearly everyone has heard mention of ghost kitchens. Ghost kitchens aren’t a brand-new concept, but there’s some confusion about what the term actually means. In a nutshell, a ghost kitchen is a kitchen facility that is not tied to a storefront and only prepares food for delivery, not on-site dining.

There are a few different ways a ghost kitchen can be structured:

    • A well-known restaurant or celebrity chef could launch a new concept that is delivery only. All food is prepared in a ghost kitchen and is only available through delivery.
    • A restaurant could outsource all their delivery orders to a ghost kitchen to free up on-site kitchen space for in-person dining. A single ghost kitchen could serve several different brands in this capacity.
    • A new delivery-only restaurant concept could rent kitchen space for an established dine-in restaurant.

Why is the food delivery experience so important for ghost kitchens?

Restaurants are highly sensory: the aroma, the music, the look of the space, and the overall vibes all create a special experience. A lot of the customers’ perception of a restaurant is shaped before they take a single bite.

When food is delivered directly to the customer, all those memorable moments virtually disappear. Suddenly, there are only two chances to create an experience: the delivery process and the food. There’s a lot of pressure on these elements to make a strong impression and start building loyalty.

At least half of all ghost kitchen deliveries are happening through the big three: DoorDash, GrubHub, and UberEats. But here’s the challenge: those companies plaster their own brands all over the delivery experience. Pair that with hit-or-miss delivery rates and high commission fees, and there’s a lot of potential for a significant blow to the brand experience and overall revenue.

Opting for self-delivery or contracting with a local restaurant delivery service allows for more control over the overall experience.

How ghost kitchens build brand loyalty.

Depending on your role in the industry, there are two major opportunities to keep an eye out for when it comes to ghost kitchens and restaurant food delivery:

  • If you own a restaurant delivery service: Be proactive about partnering with ghost kitchens. Develop your service package and your strategy now. Every time a ghost kitchen opens up in your area, you can be the first one in the door. You can also use the internet to your advantage. Build out a website with strong SEO so it’s easy for new ghost kitchens to find you.
  • If you own a ghost kitchen or a restaurant with a ghost kitchen: When you use one of the big-name delivery services, you miss out on any opportunity to capture your customers’ information. That makes it really challenging to earn their loyalty and build a relationship, especially since delivery offers fewer opportunities to make an impression. If you handle your own delivery or work with a local service, you can actually build a contact list for future promotions and communications. You also have more control over the delivery experience: You can design unique takeout containers, include a handwritten note or surprise treat, and come up with an Instagram-worthy presentation.

 

Be successful with food delivery software.

A successful delivery service relies on the functionality of a robust software program. Good food delivery software will calculate the best routes for you and make it easy to keep in touch with drivers throughout the process. You can also build a custom site to ensure that every element of the ordering experience makes a meaningful impact on your customers.

Whether you own a ghost kitchen or a delivery service, reliable food delivery software will give you the tools and functionality you need to delight your customers and reap the benefits of this new era of dining.

 

Keep delivering!

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p.s. We love hearing from our PFN readers. Feel free to offer feedback or suggestion for future editions.