Rise of the virtual restaurant
The restaurant industry has been forced to change its operating models since Covid-19 hit early 2020. Restaurants are exploring new operating models and are becoming ‘virtual restaurants’, embracing take away formats and implementing ‘social distancing’. From Amsterdam to New York, fine dining restaurants like RIJKS to casual dining restaurants like Happy Italy are rapidly making their move towards delivery at home and towards take away, focusing on new themes and home eatertainment. This move into the virtual world has been a long time coming but has now been put on the fast track. Virtual restaurants are rising up, and they’re here to stay.
The virtual integration of restaurants is a process that was started years ago with simple ordering systems but that has now grown into an exceedingly complex market that offers huge advantages for companies that know how to play it. In the earlier virtual marketplaces, simple supply and demand regulated by consumer reviews decided who was winning the market. Nowadays, however, consumer insights created through analysis of a multitude of datasets are the driving force behind virtual success. Deliveroo, for example, has been developing its “Editions” restaurants for the past years. These delivery-only restaurants are tailor made to the area in which they are placed, directly playing into the exact needs of the consumers it is going to serve. Are burgers undersupplied in the area? Then the Editions restaurant will produce burgers, as well as any other products that the market demands. The insights behind these initiatives are creating an enormous advantage over other restaurants, demonstrating the power of data in the current knowledge economy.
While this example takes the virtual restaurant to its limits, there are less extreme options. Tech companies have learned a lot about the foodservice industry and about the food behavior of our guests, allowing them to build an advantage over the traditional restaurant that is only increasing with the Covid-19 crisis battering the industry more with every passing day. Restaurants should partner up with delivery companies, using their insights and expertise to improve their offering, which will increase business for both the restaurant and the delivery company. Delivery platforms with a customer centric approach will be able to support restaurants with their menu engineering, the launching of their virtual side of business, and will help restaurants build a loyal fanbase outside of their usual area of operation. This of course, is great news for the guest; they are constantly in contact with great food from great restaurants, wherever they are. The crux of the matter is that virtual integration is the fastest way to start understanding the needs of the consumer and to play into these needs through adaption of the offering.
Virtual integration should, when used correctly, lead to a state in which you are constantly monitoring consumer needs and using the insights you gain to better serve the guest.
The virtual restaurant with food delivery apps, Instagram stories and food platforms instead of waiters is reshaping the restaurant industry. It is even changing how we eat by inspiring digital-only restaurants that don’t need any Front of House facilities. As more people order food to eat at home, and as delivery becomes faster and more convenient, the apps are changing the very essence of what it means to run a restaurant. In some cases, it is no longer needed to rent space for a dining room, all you need is a kitchen or even just a part of it. The key point is reaching consumers through new digital channels, building digital relationships with your guests and creating a new type of loyalty that is not based on availability but on personal relationships. Times are changing and so are we. As the restaurant & catering industry we need to take this opportunity to shift our business model from physical to a more virtual (hybrid) one and re-connect with our guests through the virtual restaurant.
We are seeing two types of virtual restaurants. The first is the “virtual restaurant”, which is attached to a traditional restaurant and creates dishes specifically for the delivery apps. The second is the “ghost kitchen” which has no Front of House and essentially serves as a meal preparation hub for delivery orders. Pioneers like Bright Kitchen and Keatz in Amsterdam and Food Haven in Madrid have shown that their “ghost kitchens”, with delivery only brands running through channels like Deliveroo and UberEats, work.
Especially in these times, most restaurants should re-evaluate their options for integration of the virtual world into their concept. While not suited for every type of business, the future of any industry, including the restaurant industry, is going to be more and more virtual, and not jumping in on this development means falling behind well-known brands like Domino’s Pizza, who adjusted their business model years ago into a seamless delivery model. While the restaurant industry has been slow to adjust to the new virtual world, the current crisis will be shifting the change into high gear, and if you don’t exist in the virtual world, you won’t exist at all.
For sure, the virtual restaurant will become part of our dining experience as long as social distancing is still required. When going ‘back to normal’, however, the world won’t go back to the way it was. While the emotional connection between people and food, which chefs brings to the table, is unbeatable via food apps, the way people interact with the world will be evermore virtual. We’re ready for Virtual, what about you?