The market for virtual kitchens is forecast to reach nearly $14 billion, expanding at a compound annual growth rate of 12.5 percent, according to new research from Market Research Future. Virtual kitchens represent adventurous new territory for the restaurant business, replete with both opportunities and risks. On the opportunities end, virtual brands could potentially give a great boost to restaurant businesses that lack a strong online presence. As this recent report from Eater describes, Kellogg’s, a 24-hour diner that has been operating in Williamsburg, Brooklyn, for decades, recently partnered with Profit Cookers, a company that creates and licenses brands to restaurants. Kellogg’s runs 18 of Profit Cookers’ virtual brands out of its diner. In practice, a consumer looking for an egg and cheese bagel online will see the option pop up from one of those 18 brands – all of which have a generic sound to them, almost like they were designed to maximize search engine optimization. The virtual brands tap into the expansive menu offered by the diner, while the diner benefits from the virtual brands’ expanded hours and delivery radiuses. The owner of the diner says the partnership has brought in $40,000 in additional sales. Of course, this new era in off-premise dining has plenty of risks and unknowns to work out as well. Restaurants that farm out their food under a range of brands are expanding their reach but also diluting the brand experience. It’s difficult for the consumer to know where their food is coming from – and unclear who is responsible in the event of a food safety or quality problem.

During times that feel difficult and unprecedented, it helps to look for silver linings. Right now for many people, one of those silver linings is feeling an increased sense of pride in our communities and a closer connection to them – even as we have to keep our physical distance. Neighborhoods are coming together to provide help for the vulnerable, and that includes people isolated at home and businesses working hard to survive. While the restaurant industry has long been adopting a local approach to suppliers, times like this prove the value of simply being a good neighbor as well. A recent NBC news story from San Diego reported that a couple launched a GoFundMe account to help two groups important to them: healthcare workers on the frontlines of coronavirus treatment and local restaurants that are part of the fabric of the city. The account collects donations from the public and the funds can be used by healthcare workers at San Diego hospitals to buy takeout or delivery food from the city’s restaurants. The account, which launched on March 16th, was just $1000 shy of its $15,000 goal at the time of this writing. Consider tapping into the ingenuity of friends and supporters of your restaurant in your community. Many are looking for ways to be useful during these times and want to help you work through them. Make it easy for them to support you by purchasing gift cards on your website – or by sharing the website https://supportrestaurants.org/, a global initiative that allows people to buy gift certificates for their favorite restaurants below face value but redeem them at face value.

Want to boost your traffic? Develop a strategy around limited-time offers. According to Technomic, limited-time offers have increased 64 percent at Top-500 chain restaurants and retail businesses in the past five years – and they aren’t going anywhere. But LTOs are not a slam-dunk for restaurants: While they can help brands boost traffic and generate excitement on social media, they can also be expensive and risky for a restaurant, not to mention time-consuming to plan and execute. According to a Restaurant Business report, Brian Hipsher, vice president of City Barbeque, says developing an LTO can involve up to 150 steps for that brand, with phases including ideation, marketing, trial and test, and feedback and survey. Want to boost your LTO success rate? The restaurant software company Eat advises you tap into seasonal appeal, much like Starbucks with its pumpkin-spice latte or the Shamrock Shake at McDonald’s. Make sure your offer is in fact only available for a limited time, since scarcity drives demand. Restaurant Business also suggests pricing the item carefully – you don’t want it to be too expensive for guests to want to try – and using vivid photography, special ingredients and a novelty factor to help elevate an offer over those of competitors. Finally, consider collaborating with a partner to increase your reach, promote your values or demonstrate your efforts to support the community: POS Sector suggests partnering with organic vegetable producers on a limited-time salad offer, for example.

Team Four’s corporate chef identified the rise of food halls as a trend to watch in 2020, and for good reason: There are many significant food hall projects under development throughout the US and worldwide right now, the ones in operation have a strong track record of success (only three projects have failed of the more than 100 that have opened across the U.S.), and they offer low-risk, potentially high-reward environments for restaurant operators looking to take part. If you’re considering adding food halls to your restaurant marketing plan, Touchbistro says they offer a number of benefits and can reduce the substantial risks of opening a new restaurant, such as lower startup costs, shared maintenance expenses, shared infrastructure and shorter, more flexible contracts than you would have to agree to when signing for a conventional restaurant space. Newly added restaurants can hit the ground running in a food hall, benefitting from pre-existing foot traffic and fewer up-front marketing costs. Just bear in mind that a food hall experience may challenge your brand and require you to adapt your existing menu, service approach and marketing efforts. For instance, when you’re one stall in a crowded food hall, the experience of eating your food may feel different for guests than it would in a standalone restaurant – and the hundreds of options and long queues for food can cause overwhelm for some. How can you make your food memorable and your customer experience positive when your surroundings may be beyond your control?

Most U.S. consumers rate their interactions with brands as simply “okay,” according to a Tempkin Experience Ratings report, which asked 10,000 consumers to rate 318 companies across 20 industries in the areas of success, effort and emotion. Not great (though to be fair, there were some food brands that consumers rated highly, including Wegman’s and Subway). On the positive side, though, that result leaves plenty of room for brands to deliver an experience that impresses guests and brings them back. CBInsights, which builds software that predicts technology trends, identified three components that generate positive emotional reactions and enhance the customer experience, turning “okay” experiences into “wow” experiences: sensory marketing, quality time and human connections. Restaurants have an automatic advantage on the first point. CBInsights points out that scents, for example, can trigger memories and emotions – and that consumers spend an average of 15 more minutes in places that have pleasant smells. So the aroma of the apple pie on your menu may have the power to trigger someone’s happy childhood memory (and connect it to your brand). On the second point, quality time, brands are creating immersive experiences that extend far beyond an initial transaction – Taco Bell’s recent launch of a pop-up hotel (featuring not-yet-launched menu items and other promotions tied to the brand) is one extreme example of how this can be done. Finally, brands are using human connections to bond with consumers. As companies delegate more tasks to technology, they are freeing up staff to engage in more face-to-face interactions with customers in order to help them and gather insights from them. How can your brand combine sensory marketing, quality time and human connections to provide memorable experiences for guests?

Conventional wisdom says that email marketing is king: Restaurant operators have a higher chance of targeting consumers with the right message at the right time if they prioritize email promotions. But what if your promotions are landing in spam folders? A recent episode of the Restaurant Rockstars podcast covered the power of text and how your wifi system can unlock a lot of potential in growing your database and bringing guests back – as long as you’re not giving away access with no strings attached. The guest, Steve Fletcher, runs Wifi Technology Solutions, a firm that partners with hospitality businesses to develop their marketing strategy through wifi. If you currently rely on guests to actively sign up to your mailing list, read on: For better or worse, 62 percent of people who go out to eat are looking to use wifi. Why not accommodate that demand while making it easier to expand your customer database? Fletcher advises tapping into a concept called social wifi, in which restaurant guests connect to a restaurant’s wifi network via a password that connects them to a splash page where they sign in via Facebook, email or cellphone. Thereafter, he suggests sending one email and one text per week (with text being the priority). The open rate for text is north of 90 percent and the conversion rate is about 32 percent – odds that can be profitable for you if text messaging suits your brand. Fletcher usually advises sending a text on a Tuesday morning between 10 and 11am, limiting the message to 114 characters, offering a promotion that lasts four or five days so the recipient has a good shot at using it, and always including an opt-out option at the bottom.  Need help finding a solution check, we can help.  To learn more check out https://www.palettefoodservice.com/marketplace.html to learn more about our social wifi solutions.

If you operate a restaurant in or near a college town, you’re in a sweet spot: You have access to a large concentration of food-savvy consumers who are looking for their next meal or snack (and are likely not preparing it themselves). If you deliver food, you’re also more likely to be able to maximize your profits by delivering multiple orders in a single trip. But becoming a campus favorite takes some strategy, particularly if you offer higher-end dishes or are otherwise not an ideal match for a student on a budget. To appeal to the convenience- and cost-driven college consumer, Running Restaurants suggests partnering with the college or university on any programs they offer that allow students to use some of their on-campus dining credits at your restaurant. Encourage word about your restaurant to spread on campus by offering promotions in the campus newspaper, taking part in pop-up food events, and hosting happy hours or other social events. Your online presence is important with this demographic, so make sure you offer online ordering and encourage engagement via social media (your social media handle should be visible on all of your marketing materials). Finally, values and transparency count with this community, so if you have a good story to tell about the local produce you offer, or charities you support, or eco-friendly business practices you have long used, talk it up.

Data can unlock valuable information about your guests, of course. Now Uber Eats is demonstrating that data can also reveal demand for restaurants that don’t yet exist (but could, with a little help). Uber Eats is currently the fastest-growing food delivery app, serving 70 percent of the U.S. Much of that growth is due to the development of virtual restaurants — brick-and-mortar restaurants operating one or more restaurants that deliver food via Uber Eats and exist only on that platform. For example, Eater reports that the Dallas sushi chain SushiYaa, which operates five brick-and-mortar locations, houses about two dozen other virtual restaurants — all with their own separate menus that consumers can access on the Uber Eats platform. Uber Eats actually approached SushiYaa about the opportunity more than a year ago and suggested they start a virtual restaurant to meet rising consumer demand for poke. Uber Eats data indicated demand for the food was increasing and SushiYaa had the necessary ingredients for it already on hand. All that was required of the restaurant was a business name, menu and logo. Uber Eats then provided the tablet used for processing orders and sent a photographer to take photos of menu items. The process took less than two weeks to take fruition and has been a win for the restaurant, which can now use its existing space and labor force to serve a much larger volume of business.