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What do Customers Think about Virtual Brands and Ghost Kitchens?
By Sheryl E. Kimes
Saturday, 16th October 2021
 

There's all sorts of talk about the potential of virtual brands and ghost kitchens, but what do customers think?.

Does it make a difference to them? And, have they even heard of these sorts of things? I decided to do a survey to find out (more on the survey in Note 1)!

Let's start off with the last question. Have they even heard of these sorts of things? Well, yes and no. They had certainly heard of the major delivery companies. To put that in perspective, 88.9% had heard of DoorDash, 87.9% had heard of UberEats and 82.9% had heard of GrubHub.

But, when it came to virtual brands and ghost kitchens, awareness was pretty low. Only 4.5% of respondents had heard of virtual brands. About 22% of respondents had heard of ghost kitchens. Given the proliferation of ghost kitchens during the pandemic, this isn't particularly surprising.

Back to the question on whether it makes a difference to them--this is where it starts to get quite interesting. I randomly assigned respondents to one of five scenarios that varied previous experience with the restaurant (yes or no), the presence of an actual restaurant (yes or no) and if the restaurant company made the food themselves (yes or no).

After people read the scenario, I asked them how likely they would be to order from that restaurant. Interestingly, there was no significant difference. People didn't really seem to care about previous experience, the presence of an actual restaurant and where production was done.

I also asked a series of questions about various things that customers might be concerned about when ordering delivery, particularly from a virtual restaurant (please see Note 2 for a list ). The most important factor was 'all that matters is that the food is good.' Think about it.....People didn't care that much about a connection with the restaurant, weren't concerned about the quality of the food and didn't feel uncomfortable ordering something that they hadn't tried before. And, people didn't particularly care where their food was made.

I found the results to be extremely thought-provoking. There's been a lot of talk about whether ghost kitchens and virtual brands are just short-term phenomena that will fade away once we're finally through the pandemic. The results of my study seem to indicate that this may not be true.

NOTES:

  1. The survey was conducted in September 2021 and had a total of 198 respondents from US adults.
  2. Variables included (1) Prefer food prepared at the restaurant itself, (2) Liked having a personal connection with the restaurant, (3) All that matters is that the food is good, (4) I'd be worried about the quality of the food, (5) I'd be concerned about the accuracy of my order, (6) I'd be worried about hygiene, (7) it makes no difference to me where my order is made and (8) I'd feel uncomfortable trying things I hadn't tried before.

Sheryl E. Kimes, Ph.D., is professor emerita of operations management at the Cornell University School of Hotel Administration, Cornell SC Johnson College of Business, and a visiting professor of analytics and operations at the Business School at the National University of Singapore (sk@sherrikimes.com; sek6@cornell.edu).

Her area of specialization is revenue management. She has been teaching, conducting research, and providing consulting services in this area for over 25 years. She has published over 100 articles and book chapters and has received multiple awards for her research including the Lifetime Achievement Award by the College of Service Operations of the Production and Operations Management Society and the Industry Relevance Award by the Cornell University Center for Hospitality Research in 2010, 2012, and 2014. In 2017, she was given the Hotel Sales and Marketing International Association Vanguard Award for Lifetime Achievement in Revenue Management. She was the third recipient of this award.

www.sherrikimes.com

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