Shake Shack continues to invest in its digital business after a major change in consumer habits during the Covid pandemic, launching its own in-app delivery service nationwide as part of an exclusive partnership with Uber Eats.
The transfer is extended with the Shack Track service, which allows guests to pre-order food to pick it up at shop windows, sidewalks or store shelves. The nationwide launch follows tests in Miami and New York.
Customers who place an order on the Shake Shack app will be able to track their order in real time and pay a 99-cent flat-rate shipping fee or receive free shipping on orders over $ 35.
“We found that they could do incredibly well this year, especially in places where we’re stronger,” Randy Garutti, CEO, said of his decision to partner with Uber Eats.
Shake Shack is testing a 5% surcharge for third-party shipping, which will make in-app orders the best value for customers. Later this month, it offers free chips with orders over $ 15 in the Shack app.
Shake Shack’s digital sales have grown over the past year and accounted for nearly 60% of its total sales in the fourth quarter. During the third week of February, year-on-year sales through its app and website increased by more than 300% compared to the previous year. From March 2020 to January, Shake Shack added 2 million customers for the first time to its digital channels, the company said.
This growth is helping Shake Shack improve its performance. Following its latest earnings report, its shares jumped as revenues rose to $ 157.5 million. Although sales in the same stores continued to have problems, falling 17.4%, the decline was not as strong as it had been in the third quarter.
Shares of Shake Shack have risen more than 277% over the past year, raising their market value to $ 5 billion, at the close of the market on Tuesday.
Garutti said the company has increased investments in digital to facilitate friction. He hopes the in-app delivery will help customers in the Shake Shack infrastructure, helping the company better understand their preferences and facilitating marketing directly to them. As part of its investment, Shake Shack is building its technology development team in collaboration with Uber Eats compliance.
“A year ago, we were a 20% digital company and 80% in person, and overnight we went to 80% digital, 20% in person,” Garutti said. “What we rebuilt then was really trying to grow and accelerate the digital toolbox … We want to get people into our ecosystem.”
While Shake Shack is gearing up for a more face-to-face business as vaccines are rolled out, the company wants to be prepared to fill customer orders in a variety of ways and digital will continue to be part of the face-to-face experience as well, Garutti said. .
The playbook is similar in other restaurants experiencing strong digital growth, including Domino’s, Papa John’s, Chipotle and Cava, as consumer preferences change, probably permanently, as a result of the pandemic.
Shake Shack has a smaller footprint than many of these competitors, with just over 200 locations in the United States. In 2021, the company plans to open 35 to 40 Shake Shacks and 15 to 20 licensed restaurants managed by the company.
Late last year, Shake Shack’s suburban locations worked better than its urban restaurants, but the company will develop new locations in both areas, Garutti said.
“I want to do it all. Our headline is ‘increasing development everywhere.’ affected, “he said. Meanwhile, it is also working to open drive-thrus to the suburbs in the coming years as it expands its footprint.
“I firmly believe that the great cities of the world will return,” Garutti said.