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Naji Haddad

How virtual brands boost profit without increasing costs

DUBAI, March 23, 2023

The restaurant industry is trying new concepts such as ‘virtual brands’ to diversify their offerings, increase revenue, and reach new audiences without significant investments.
 
As the 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, writes Naji Haddad, Mena General Manager at Deliverect.
 
The restaurant-to-consumer delivery segment accounted for 98.4% of the global online food delivery market in 2021. 
 
This technological scenario, 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 Dark Kitchen, which refers to a restaurant kitchen that is only used to make meals for sale and is not accessible to the general public.
The heart of the business, the command centre, 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 one owns a restaurant or a dark kitchen and are thinking about creating a virtual brand, consider the following advantages.
New business markets: By providing a different menu in one's virtual brand, one will be able to appear in new search results in delivery apps, thereby expanding the customer base.
 
A more efficient operation: One can start the business with one's existing kitchen and staff without significant investments.
Flexibility: One can try new sales and distribution channels to increase one's revenue 
 
Experiment with new menus and flavours: If one has discovered a new or trending market, such as vegan food, one can investigate and improve one's offering under a new brand.
 
Possibility of expanding one's business: When demand increases, one can boost one's kitchen resources or hire more employees without opening new locations.
 
Reduce Food Waste: Using the same kitchen and personnel reduces the amount of food waste.
 
Lower investment: Less expensive than opening a store.
 
Increased revenue: As a result of new targets and diversification of one's 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 one is looking to take one's brand to the next level. These include identifying the target audience, having high competition geographically and online, having the financial capability to develop one's brand while meeting operational expenses, having the expertise to work in a new culinary category, choosing a delivery platform, selecting the right management system between one's kitchen and delivery platforms, 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 one’s tone
It's crucial to develop a distinct voice and tone to help one’s brand stand out from the competition. One way to achieve this is by analysing the communication strategies of one’s competitors and avoiding replicating them.
 
#2 Make distinctive content
Hold a photo shoot and make sure one’s photos are craving and appealing. Experiment with different photographic styles and props that are related to one’s brand. One can add a personal touch to one’s photos by placing icons around them, using filters, or using unique typography. In addition, share stories or curiosities about one’s food on social media, and consider collaborating with food bloggers.
 
#3 Customer reviews or posts to improve one’s reputation
Encourage one’s customers to leave reviews or post about how much they enjoyed the food on their social media accounts. Reviews allow one to improve one’s reputation while receiving feedback on what one can improve and what one is 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 one has already captured a loyal audience with one’s menu and that many more potential customers are eager to try one’s new offerings.-- TradeArabia News Service
 



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