Food-service Survival – The Cloud Kitchen

Foodservice Survival – The Cloud Kitchen
Cloud Kitchens, also known as Ghost kitchens are a new phenomenon in the foodservice business. During these times restaurants are finding it difficult to stay afloat. Many eateries have offered outdoor dining to pick up business, but this will slow down and possibly disappear as the winter approaches.
Recently, I called in an order to a local pizzeria and when I arrived I was startled to see all the cars double-parked in front of the retail location. Upon entering, I stepped into a long line of patrons waiting to pick up their dinners. The line circled around the tables in the restaurant and the few customers eating in were surrounded by the customers who came to pick up their meals. The individuals eating looked annoyed by the situation and probably would not dine there again.

This is an example of a popular Italian restaurant surviving in this climate because the food is excellent. In order to survive the current crisis and become more profitable, the owners should consider converting this pizza restaurant to a Cloud Kitchen format. When I called in my order I was told it would be ready in 20 minutes, I arrived 25 minutes later. Having to stand in line for approximately another 20 minutes was annoying. If the owner of this establishment would convert to the Ghost Kitchen concept he would have a smoother operating business and certainly more satisfied customers.

Changing the format for a traditional restaurant to a Cloud-based requires a new mindset. If the owner decides to leave the current location they can lease a smaller space in a less visible location not requiring parking. This will require only kitchen staff. No longer a need for dishes, glasses, or utensils, just disposable packaging. These are all cost-saving changes that will help increase the bottom line.

Restauranteurs will need to create a marketing strategy that will include keeping their current customers and bringing in new customers. As we have all heard time and again that social media marketing is the way to promote your business. The one drawback is how do customers find your webpage? This is where traditional time-tested methods still work such as direct mail, circulars, and if you can afford radio spots referencing your web presence.
Cloud Restaurants need delivery service and there are several well-known providers that they can partner with. GrubHub is probably the most well known, Uber Eats and DoorDash have apps that can be download. The benefit of these delivery services is that the restaurant does not have to invest in additional software or add staff to deliver their meals. The delivery services also promote the restaurant’s brand by featuring their menus on their websites and apps. This gives the restaurant a wider exposure to drawing new customers.

Another alternative is a hybrid location combining both traditional and cloud-based operations. Using the aforementioned pizzeria which has a big following they could scale back the dining area and erecting a partition. This would allow the take-out customer an area to stand and adding more cash registers to process customers. Also, the few people dining in the restaurant would not be annoyed.


How an Effective Marketing Mix can Increase Profits 
(Part 3, Place & Promotion)

How an Effective Marketing Mix can Increase Profits 
(Part 3, Place & Promotion)

In this third segment of the four P’s of marketing, we will cover place and promotion. These two segments are intertwined and should be covered in one blog post.

The place is where your sales are located, also known as the channels of distributionPromotion includes selling, advertising, sales promotion, and public relations.

During these chaotic times, businesses are exploring new channels to sell their products and services. Governors are reimposing the stricter guidelines that were in effect a few months ago. This pandemic will be with us for several more months and businesses will have to adapt and overcome these conditions.

Depending on your type of business you may need different tactics to distribute and promote your product or services. If you are a B2B (business to business) supplier your strategy will require a different approach than B2C (business to consumer) sellers.

B2B distribution in most cases is not done from a retail location. The driving force has been personal selling which is becoming more difficult. Customers and prospects are not receptive to cold calls in this climate. A customer service center with knowledgeable personnel who can sell will be more effective. You should have a website that customers can go to review your product-line, and established customers can place reorders. The most effective way to have potential buyers go to your website is by email promotions. If you don’t have email addresses you can purchase lists online at a low cost. Unlike B2C you have a finite universe to sell to that can be managed with direct marketing. Trade associations that your customers may be members of are a great place to start. You can advertise in their publications or be a guest speaker at one of their events.

B2C sellers whom many have brick-and-mortar locations may have to reevaluate how they will conduct business to survive. Retailers should consider using social media to promote their wares. There is a void forming in the marketplace, the big chains are closing stores and some like Lord & Taylor are going out of business. https://moneywise.com/a/chains-closing-the-most-stores-in-2020

Aggressive retailers can use this as an opportunity to fill this vacuum. Marlton True Value is an example of a local retailer who is flourishing. They have a knowledgeable staff who are there to answer questions. The pricing is competitive, a complete selection of products, a convenient location in a strip center, and curbside pickup. This is an example of why shoppers don’t go to big box stores.

In closing, we are all creatures of habit, and some businesses are thriving, because they have revised their business model. These changes may include pickup and delivery options that make life more convenient.