“Be where your customers are” has always been a restaurant industry driver, but for years that meant strategic location selection based on demographic and geographic trends. For QSR and fast casual restaurant brands that “anywhere” now means at home. These brands were born on convenience with customers coming to them for speed of service. Now, they’re being forced to meet customers’ convenient demands by coming to them.
Sure, delivery has been around for years with pizza setting the pace in mainstream America. But as consumer palettes have gotten more sophisticated and with access to just about any culinary cuisine, delivery has served as an opportunity to capture a lucrative share of spend. According to a report from UBS’s research group, the Evidence Lab, the food delivery market could grow from $35 billion to a $365 billion industry by 2030.
Delivery has opened the door for other avenues, which as a result has meant an adaptation of the customer journey and even restaurant design. QSR and fast casual brands are now exploring and implementing ghost or virtual restaurants that run primarily off of delivery-only operations.
Atlanta-based fast food chain Chick-fil-A recently launched new prototypes in Nashville and Louisville focused on catering, delivery, and takeout. Sans a dining room and drive-thru, the chain doubled the typical kitchen footprint to 4,200 square feet to accommodate the focus.
Individual customer orders can be placed through the meal delivery service DoorDash, and catering orders are available for delivery or pickup. Customers can still walk-in and order from the standard menu, but have to take it to go. Aside from streamlining the operational focus, the kitchens are also operating as a cash-free concept encouraging individuals to either pay with debit, credit or via the Chick-fil-A mobile app.
After closing all Chicago units, the fast casual burger chain Red Robin transformed a shuttered unit into a virtual restaurant. Located on Chicago’s Michigan Avenue, Red Robin Express now serves the surrounding area through delivery only. Three on-staff employees are dedicated to online and app orders via delivery on foot or bike, while six third-party delivery services provide further support.
The brand has also made a concentrated effort to modify the menu for the best customer experience for a delivery model. For example, seasoned chips have replaced the restaurant’s traditional steak fries, and brioche buns for burgers to withstand the time from cook to consumption.
While we still believe there will always be a demand for dine-in (just like the age-old debate of online vs. brick-and-mortar), these brands are capitalizing on consumer demands and finding a way to add solutions to deliver. Not to mention addressing some of the restaurant industries most pressing challenges including operating and labor costs.
It’s worth noting though that not all virtual restaurants concepts have seen success. Smaller startups like New York’s, Ando have failed with a delivery-only model, suggesting that a pre-establish customer base and brand awareness might be the key element for extending a chain into a virtual restaurant.