HOW VIRTUAL BRANDS CAN INCREASE PROFIT WITHOUT INCREASING COSTS

BY NAJI HADDAD, MENA GENERAL MANAGER AT DELIVERECT

As the restaurant industry continues to adapt and evolve, both traditional brick-and-mortar establishments and "dark kitchens" have proven to be shining examples of resilience and innovation. Not only do they offer a wide variety of delicious meals, but they are also embracing new concepts such as "virtual brands" to diversify their offerings, increase revenue, and reach new audiences without significant investments.

The restaurant-to-consumer delivery segment accounted for 98.4% of the global online food delivery market in 2021. This technological development influenced by the recent increase in prices and the pandemic, encourages restaurant and dark kitchen owners to consider new strategies, such as virtual brands, to adapt and reach new customers efficiently and cost-effectively.

What are virtual brands?

Virtual brands are a new and growing concept in the restaurant industry open to all. Simply put, it consists of creating a brand that only sells its menu through digital platforms, which has gained traction since the pandemic.

Virtual brands are frequently managed by existing restaurants that see them as a way to diversify their operations, reach new diners, and increase profits. The food is real. The brand is virtual. The customers are real, the platforms to order are virtual, and so on.

Virtual Brands and Dark Kitchens are related

Another concept closely related is the ‘Dark Kitchen’ which refers to a restaurant that is only used to make meals for sale and is not accessible to the general public.

The heart of the business, the command center, is a dark kitchen. It can host several virtual brands that coexist in the same location but have different communication styles, target markets, menus, and other factors, increasing the operation's profitability. The global food delivery market has grown to be worth over $150 billion tripling since 2017.

Advantages that virtual brands provide

If you own a restaurant or a dark kitchen and are thinking about creating a virtual brand, consider the following advantages.

1. New business markets: by providing a different menu in your virtual brand, you will be able to appear in new search results in delivery apps; thereby expanding your customer base.

2. A more efficient operation: you can start the business with your existing kitchen and staff without significant investments.

3. Flexibility: you can try new sales and distribution channels to increase your revenue

4. Experiment with new menus and flavours: if you've discovered a new food target, such as vegan food, you can investigate and improve your offering under a new brand.

5. Possibility of expanding your business: when demand increases, you can boost your kitchen resources or hire more employees without opening new locations.

6. Reduce food waste: Using the same kitchen and personnel reduces the amount of food waste.

7. Lower investment: less expensive than opening a store.

8. Increased revenue: as a result of new targets and diversification of your offering.

Virtual brand challenges to consider

Although the virtual brand menu is full of opportunities, there are some challenges and points to keep in mind if you're looking to take your brand to the next level. These include identifying the target audience, having high competition geographically and online, having the financial capability to develop your brand while meeting operational expenses. In addition, this includes having the expertise to work in a new culinary category, choosing a delivery platform, selecting the right management system between your kitchen and delivery platforms. Lastly, training the kitchen staff and following the food safety protocol.

Developing a virtual brand

A consistent and easily identifiable virtual brand is crucial for connecting with customers and being top of mind when searching for a place to dine from. In a survey conducted by Qoot and Deliverect recently, participants running restaurants shared that marketing their virtual brand is one of the challenges that they face. Here are three marketing actions that will address this challenge.

1. Add a pinch of flavour to your tone: It's crucial to develop a distinct voice and tone to help your brand stand out from the competition. One way to achieve this is by analysing the communication strategies of your competitors and avoid replicating them.

2. Make distinctive content. Schedule a photo shoot and make sure your photos are craving and appealing. Experiment with different photographic styles and props that are related to your brand. You can add a personal touch to your photos by placing icons around them, using filters, or using unique typography. In addition, sharing stories or curiosities about your food on social media, and collaborating with food bloggers stands out.

3. Customer reviews or posts to improve your reputation

Encourage your customers to leave reviews or post about how much they enjoyed your food on their social media accounts. Reviews allow you to improve your reputation while receiving feedback on what you can improve and what you are doing well.

As a restaurant owner or employee, it can be overwhelming to keep up with the constantly changing industry. However, it's important to remember that you've already captured a loyal audience with your menu and that many more potential customers are eager to try your new offerings.