Smokey Bones' Virtual Business Gets Even More Sophisticated

With the addition of more ghost concepts, the NextGen Casual created a central website to carry everything, as opposed to operating multiple online ordering platforms for each brand.

October 19, 2022 Ben Coley

Off-premises has always been a strategic priority for Smokey Bones, even before the pandemic. In fact, CEO James O’Reilly says the casual-dining chain in 2019 became the first company to place virtual brands on Uber Eats with the introduction of the Burger Experience and Wing Experience. By August 2020, the company expanded the two concepts to all 60-plus brick-and-mortar restaurants across the country.

Two more digital brands were added to the fold this year—Bowl Market, which features a variety of flavors like brisket, ultimate barbecue, and buffalo chicken, and Tender Box, a concept comprising chicken and waffles, dipped tenders, and a Korean-style chicken sandwich.

“These two brands started with consumer research that told us there was somewhat of a gap in the area of comfort foods in the off-premise space,” O’Reilly explains. “They're very rich and flavorful and gooey and drippy and very, very comforting brands. We don't just obviously do it for the sake of doing it. We identified what we believe is a market opportunity and developed dedicated brands to target that.”

While the Burger Experience and Wing Experience were each launched with dedicated packaging and websites, Smokey Bones felt doing the same for Bowl Market and Tender Box would create too many challenges for restaurant operators. So the NextGen Casual began researching the off-premises guest experience, and it immediately recognized one of the biggest limitations of a traditional online ordering platform—the veto vote. O’Reilly describes it as a “real point of friction” for groups if they choose multiple locations, which also brings additional delivery and transaction fees, drivers, and timelines.

Smokey Bones’ solution is Bite Hall, a virtual food hall in which customers can place online orders—takeout and delivery—from the Burger Experience, the Wing Experience, Bowl Market, Tender Box, and Smokey Bones from one website. The platform is live for all 62 restaurants in the system.

“We have been believers in our virtual restaurant business ever since they've become a meaningful part of our revenue stream,” O’Reilly says. “And we've learned over the last few years how to continuously optimize them and improve the guest experience. … The competitive advantage versus third-party platforms is that you can add items from different brands onto one ticket. And so obviously that family or that group of people at home doesn't have to choose between barbecue, wings, or burgers or bowls or whatever—all those things can be added onto one ticket.”

O’Reilly wanted Bite Hall to be an Amazon-like experience in terms of navigation. Each of the five choices is listed at the top of the page, and users can switch between menus with one click. Everything goes into one shopping cart, but items are clearly divided based on which concept they’re from. New Bite Hall packaging will feature all five logos and serve as a replacement for materials specifically for the Wing Experience and the Burger Experience.

The website, which took almost a year to develop, was created in partnership with Smokey Bones’ e-commerce partner, ToGoTechnologies.

“We shared this vision with them back when we were beginning to develop Tender Box and Bowl Market, and we realized that there was a huge opportunity here to create a virtual food court. Digital multi-branding, if you will,” O’Reilly says.

Smokey Bones

Ultimate Barbecue Bowl from Bowl Market.

“Our commitment to our off-premise business as a growth driver is permanent,” says Smokey Bones CEO James O’Reilly. “That will always be a part of our focus as a company. We will continue to use virtual brands over the years."

Smokey Bones is committed to its dine-in customers, which spend more time purchasing appetizers, alcohol, and desserts, but the company also wants to make it known that off-premises guests—those that value convenience, speed, accuracy, and temperature—are just as important. That’s the exact reason why the chain is piloting a drive-thru location in Bowling Green, Kentucky.

With the pandemic forcing customers into their homes, virtual brands have exploded in the past two-and-a-half years as a way for restaurants to expand kitchen capacity and reach new customers. The business is so big now that some companies supply digital concepts as a service; like Huddle House and Perkins Restaurant & Bakery using Virtual Dining Concepts’ MrBeast Burger, or TGI Fridays using C3’s Krispy Rice. Independents are in the space, too. A Grubhub report in January found that 41 percent of independent restaurant owners offer virtual restaurants, with the average number used being 5.7.

The beauty of Smokey Bones’ virtual brands, O’Reilly says, is that none of them impact culinary execution. Bowls, wings, burgers, and tenders are already on the Smokey Bones’ menu, so back-of-house team members are accustomed to processes and ingredients. The CEO also pointed out that operators are used to launching LTOs and new flavors throughout the year, so there’s familiarity with folding in new production.

“They're very good at receiving training programs for new flavors and new forms of things that they already know how to execute,” O’Reilly says. “So we work these virtual brands into our rhythm, our operating cadence as a company, and roll them out with lots of training materials. We have an excellent training function and the restaurants receive them very well and have begun to execute them very enthusiastically.”

Although virtual brands have become an incremental part of business, overall consumer awareness is still catching up. In 2021, Sherri Kimes, an emeritus professor at Hotel School at Cornell, conducted a survey of U.S. adults 18 and older that found only 4.5 percent heard of virtual brands and only 22 percent knew of ghost kitchens. O’Reilly says Smokey Bones hasn’t had significant issues with confusion because each brand was created with the mindset of, if it couldn’t survive as a standalone entity, it wouldn’t be viable as a ghost concept. Secondly, the chain never hid the fact that it’s behind the virtual brands; it’s not explicitly stated on online platforms, but at the same time, brick-and-mortar restaurants have signage saying things like “Home of the Wing Experience.”

To Smokey Bones, virtual brands aren’t a gimmick used to simply survive the pandemic. There’s staying power, and the brand is ready to prove it.

“Our commitment to our off-premise business as a growth driver is permanent,” O’Reilly says. “That will always be a part of our focus as a company. We will continue to use virtual brands over the years. We do not think of them as a Band-Aid to get us through the pandemic whatsoever. We view it as a real market opportunity in the restaurant industry. The brands themselves, we view them as distinct revenue streams and evaluate them over the years and over time. So over time, some may come, some may go, but it's a strategy that we believe in.”