Dive Brief:
- Shake Shack fans in seven states can now place pick-up orders online, without downloading the mobile app, reported Skift Table. Ten restaurants in New York, Pennsylvania, Ohio, Michigan, Illinois, Colorado and California will trial the online system.
- Unlike on the company's mobile app, launched at select locations for iPhone users in late 2016 and for Android phones in July 2017, customers won't need to create a profile.
- App sales account for almost 5% of total sales and boast higher check averages than in-store transactions, a perk Shake Shack also anticipates from online ordering. Customers can choose a preferred pick-up time, but stores limited the number of mobile orders per hour to maintain freshness, staff efficiency and in-house experience, according to PYMNTS.com.
Dive Insight:
Given Shake Shack's notorious long lines during peak lunch and dinner hours, online ordering adds another way to speed up customer experience and will likely encourage first-timers and those who feel inundated by apps. Not everyone wants to create a user profile, so the chance to quickly check-out as a guest holds potential to further boost digital sales, especially since CEO Randy Garutti told investors in May that digital orders were 15% higher than in-store tickets.
By launching online ordering in 10 specific locations, Shake Shack appears to be following a similar strategy that helped it successfully, but slowly roll out its app. With the app, the New York-based chain hired a software development consulting firm to test it before opening it up to the general public, which gave the cult burger chain time to work out potential kinks in the technology and ease pick-up before it affects a larger customer base.
Alleviating pick-up is a critical area for chains to solve since mobile ordering has been cited in slowing down the in-store experience for everyone else and cause a glut of customers at the hand-off point. Plus, a packed restaurant of idling patrons might turn off walk-ins who think service could be slow. Starbucks, for instance, watched mobile orders grow from 3% to 7% in one year, while the number of transactions per store dropped 2% in that same period. More than 1,000 stores now see 20% of their morning rush business solely through app orders. Chipotle encountered similar issues with its digital orders and eventually assigned its second assembly line to both catering and pick-up tickets — but it was no small task. Chipotle added video screens that run through a specific algorithm to help employees churn out a certain number of burritos in 15-minute intervals.
Shake Shack said app sales at new stores hit a higher percentage of sales right off the bat, a good sign for online ordering and the hope of early adoption. But whether new stores are prepared for that rush could be another story. The company opened its first Seattle restaurant less than three weeks ago, where lines have reached 45 minutes at peak hours. Perhaps that's why they launched mobile app ordering without fanfare on Monday, but local food media quickly noticed.
While more established chains including McDonald’s, Wendy’s and Burger King are unveiling delivery partnerships with third-party services, Shake Shack seems to be staking its digital sales goals on perfecting the system before expanding it across the board.
