Cloud Kitchens are great, but what if it rains?

From door delivery to drone delivery, technology hasn’t only reformulated the ordering experience, but also redefined the process of how a restaurant functions. One such invention is Ghost Kitchen Aka Cloud Kitchens are great. These are labelled as one of the most lucrative businesses in the food-tech domain, but the dark side of the “dark kitchen” remains untouched and unknown to many who are keen to start their own business.

While cloud kitchens build a versatile model with certain dynamics such as low capital cost, easy maintenance and limited human resources, there lie some factors that lead to the failure of cloud kitchens. Here we explain the major hindrances of cloud kitchens and how they can be solved. 

A forever battle

Imagine you’re a small boat sailor who helps travellers reach from one end to the other of the river. A few more sailors join the market and hence the pricing keeps fluctuating. Eventually, the price gets fixed and the situation becomes a win-win for you and your competitors. Everything seems hunky-dory until a river cruise enters the river which can help 150 passengers to reach their destination, giving them a better experience and additional features.

This is the exact situation of small could kitchens that are striving to survive in the market. Unlike a restaurant that requires huge capital, cloud kitchens are comparatively cheaper in cost and maintenance. Considering this as the main reason, cloud kitchens are being highly opted for and hence the rat race never ends. The biggest problem that arises is when huge companies start entering into the same business. After pumping about ₹250cr into their cloud kitchens initiative, Food-tech aggregators like Swiggy and Zomato have started their own cloud kitchens, making the situation more strenuous for small kitchen owners to survive in the market.

Pro Tip:  Invest in activities that make you stand out from the crowd. Cloud kitchens have no physical visibility, the only place your customers can see you is the internet. Digital marketing is a great way to build brand awareness. Instagram, Facebook and Twitter are substantial tools that can help you create a strong connection between you and your customers.

An over-reliant business

While leveraging on the aggregator’s platform, it’s equally important to be independent and run your business in your way. Brands like Faasos and Behrouz Biryani present a strong example for not only winning over thousands of hearts with their food but also reaching the customers in the most personal way possible fueled with technology. 

Nevertheless, the real problem lies in placing your entire business in the hands of food aggregators, to whom, your business is just as good as your competitors. A bad situation is where you have to hopefully gaze at the third party application wishing constantly for orders to be placed, but what makes it even worse is when you are new to the industry and have made no experience with building a brand identity or with any other aspect of running a business.

Pro Tip:  Using third-party applications is normal for every cloud kitchen, but relying entirely upon food aggregator bags a huge risk for your business. Curating a personalized website or a mobile application for your business acts as a great backup for this issue.

No personal touch

Building on the previous point, cloud kitchens that are solely dependent on a third-party platform, would not have the access to the data of their customers. Many cloud kitchens might not consider this as important. However, what if a customer wants to place a bulk order? The first thing they would do is search for your contact details on the aggregator’s platform. When a customer reaches out to your brand, especially like this, it signifies the urgency to make a move towards building a direct relationship with your customers.

In addition to all of the above, studying customer behaviour becomes much more difficult when completely relying on an aggregator application. Understanding your customers’ likes, dislikes and their opinions play a major role in setting the business strategy straight. Turning a deaf ear to customer reviews and interests has in no way helped cloud kitchens and their cause.

Pro Tip:  Do not leave any chance that lets you connect to your customers. Respond to queries on your website or google reviews, including the reviews made on your aggregator’s application. Studies have shown that 82% of customers trust online reviews, make sure you answer every review especially the negative ones.

Unorganized POS system

Customer data helps in a million ways to boost your brand value in the market. Knowing your customers is important, but knowing about your customers aids your business to perform personalized activities for them. For instance, sending a special message or rolling out an offer, especially to your customers’ on their birthday or anniversary adds an emotional string about your brand in their mind. It is compelling yet can be done dynamically with powerful tech abilities.

A rigid POS system hinders the productivity of your business. Right from placing the order to making payments, every activity gets delayed with an ineffective POS system.  

Pro Tip:  Investing in a well-built POS system will help you track your cash flow, food inventory, manage your business and simplify the process of book-keeping. Handling data becomes much easier and helps you offer loyalty programs for your customers.

The Solution:

Cloud Kitchens; although as cheap as chips isn’t everyone’s cup of tea. Studies show that 60% of cloud kitchens fail and need to burn huge cash for at least a period of 5 to 6 months to gain visibility and enter the new listing on an aggregator’s platform. To resolve these issues, it is necessary to take significant steps in terms of technology, marketing and operations. In modern times hiring professionals has become easy. However, multiple solutions for distinct problems, makes it difficult to organise and systemize business activities. To know more in depth about the industry of cloud kitchen you can visit our blog https://blog.yumzyx.com/cloudy-forecast-of-restaurant-industry/

Considering these issues, YumzyX gives you a 360° solution that includes business app development, personalized website creation, branded integrations and omnichannel marketing that not only builds your brand value but also helps you stay connected with your customers directly.  

Let us be a part of your journey. Get in touch