3 Biggest Risks of Virtual Restaurant Brands

Virtual Restaurant Brands

Written by Ashley Dameron

February 4, 2021

Over the past few years, we’ve seen virtual restaurant brands emerge as one of the latest trends in the restaurant industry. But when the pandemic shut down the economy, virtual brands were fast-tracked to the forefront of restaurant innovation. Though many experts agree that these solutions add many benefits to the bottom line, there are skeptics who wonder if the risks outweigh the benefit in the long term. While takeout and delivery solutions have been essential to the survival of restaurants during the pandemic, it is perhaps too soon to tell if companies should be relying on these trends for the future of their brands. Here are the 3 biggest risks of virtual restaurants that indicate this trend may not be a long-term solution.

Maintaining Food Quality with a Virtual Brand

One of the biggest challenges of takeout and delivery dining is ensuring the food gets to its end destination in a time frame that doesn’t compromise the quality, taste, temperature, and flavor of the food. Comfort food like wings, pizza, and burgers travel better than a filet, seafood, or even French fries. And with the uncertainty of the pandemic taking an emotional toll on consumers, comfort foods have been a common craving. On the flip side, consumers are also more health-conscious, choosing foods high in healthy nutrients like salads, soups, and sandwiches which also travel well. But is it sustainable? Though there are menu items that retain their quality during travel, relying solely on delivery means consolidating menu items for your virtual brand. This doesn’t bode well for brands that are known for some of those other menu items that don’t fit well in the delivery model. While it is important to meet the demand of new customer trends, it is also essential that companies continue to focus on their current, loyal customers and the brand their consumers have come to love and trust.

Building Trust is Difficult for a Virtual Brand

Speaking of trust, according to Robert Byrne, Director, Consumer and Industry Insights at Technomics, 89% of consumers polled say that the trustworthiness of a brand is important when making a decision. Consumers want to know they can trust a brand to keep them safe, to stand behind their food or product, and does that brand line up with their own personal values? Companies today are expected to be socially responsible, aligning their mission, vision, and values with those of their customers. As a virtual brand, it is incredibly hard to build a relationship based on brand values with customers when the only thing you have to offer is a commodity – food. Brands will need to work extra hard to bring consumers into their story and connect with them outside of the delivery interaction.

Virtual Brands and the Customer Experience

In another study performed by Technomic’s, consumers were asked about their enjoyment of the social experience of visiting restaurants. The results indicate that people didn’t realize how much they enjoyed dining out, and they miss it. People don’t eat at restaurants for the great food alone, they are there for the ambiance and atmosphere; the experience. In a state of the industry report published by the National Restaurant Association, 63% of Consumers say they would rather spend money on an experience such as a restaurant or other activity, compared to purchasing an item from a store. This experience is difficult to provide for a virtual brand. This means your brand is relying solely on dine-out customers, a customer base that is strong in the wake of the pandemic but may disappear quickly once the nation reopens and returns to “normal”.

With all trends, it is important that restaurant leaders understand their consumer base and determine if the new trend is the right fit for their specific brand. Virtual brands have not been around very long, and while it feels this pandemic has lasted forever, 12 months is not a long enough time frame to predict the long-term outcome of new trends driven by the pandemic.

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