Restaurant marketing

The Impact of Ghost Kitchens on Restaurant Marketing

Over the past two years, we have seen the rapid rise of new business models aimed at meeting the changing needs of restaurants in the face of labor shortages and changing consumer behaviors and desires. From technology to techniques, restaurateurs are exploring a wide range of innovations to adapt to the new landscape of the foodservice industry. For example, some restaurants are leveraging robots and AI to meet staffing needs and consumers’ desire for a safer dining experience.

At the same time, we also saw an increase in meal boxes and kits as restaurants, bakeries and pizzerias gave customers the tools to cook their favorite take-out meals at home. Even fine-dining establishments are ditching old approaches, transforming their menus to meet consumers’ desire for more comforting meals they can enjoy at home.

The fast food industry is experiencing a similar disruption of traditional business models through one innovation in particular: the ghost kitchen.

The Evolution of Ghost Kitchens Over the Past Two Years

With the pandemic fueling their adoption, making consumers feel comfortable eating (even with fancy dishes!), ghost kitchens are quickly becoming a popular option among quick service diners. Today, everyone from working professionals and Gen Zers to busy families, and even grandma and grandpa are using online delivery. As such, these delivery-only business models have seen significant growth as the reach of third-party delivery apps, such as Postmates and DoorDash, eliminate past challenges such as customer accessibility.

However, although there has been a recent pandemic-induced surge in online deliveries with a 43% increase in weekly consumer take-out or delivery orders, this concept is not new. Even before the pandemic, the popularity of ghost kitchens was already on the rise, with global delivery sales more than doubling between 2014 and 2019, according to Euromonitor.

Interest in ghost kitchens represents a new era of innovation as aims to propose new operating models and new offers that respond to changes in customer behavior and desires. This phenomenon is expected to create a $1,000,000 global opportunity over the next decade, helping quick-service restaurants quickly capture 50% of the drive-thru and take-out food service markets, respectively, and 25% of the on-site food service market.

These potential impacts open up a whole new set of considerations for industry leaders regarding operational efficiency, workforce requirements, and marketing spend. To stay relevant in an evolving landscape, quick service restaurant marketers must explore the huge opportunity surrounding ghost kitchens, zooming in on its benefits for marketing brands as they gain the ability to reach new locations and customer segments and to introduce expanded offerings.

With all of these factors in mind, where do marketers even begin to identify the optimal ghost kitchen marketing tactics?

How Restaurant Marketers Can Optimize Ghost Kitchens to Expand Their Reach

There are many opportunities for marketers to leverage the ghost kitchen phenomenon, especially without the limitation of a specific location. Because of this, there is more space to make digital investments that will boost customer acquisition, brand awareness and sales.

Here are three ways marketers can maximize their brand reach with ghost kitchens:

Invest in a digital presence – Without traditional brick-and-mortar placements, ghost kitchens will need consistent social media promotion and third-party app ads to build brand visibility. Fortunately, most consumers are already active on social platforms, so the biggest key here is consistency. Longer term, it’s also worth noting that marketers can promote their own social apps on larger ones to drive traffic to their brand assets.

Profitable market expansion Lowering the overhead of running a traditional restaurant allows more money to be allocated to market expansion. Ghost kitchens are experimental in nature, so it’s the perfect environment to test out different consumer markets and products without the timing and financial pressures of in-person launches.

More extensive brand segmentation – Marketers can build multiple digital brands under a single master brand, allowing them to cater to different audiences who hadn’t considered them before. Menus can be more dynamic, which not only attracts dynamic customers, but also speaks to more profitable product testing, as mentioned above.

The digital climate has invited a whole new world of marketing innovation, so it’s crucial to act quickly and with intention, if you want to become a marketing force in this evolving ghost kitchen climate.

Adam Hermann is SVP, Business Strategy and Development, of Goodway Group, a New York-based digital media partner.