Shake Shack continues to invest in its digital business after consumer habits changed dramatically during the Covid pandemic, and is launching its own nationwide in-app delivery service as part of an exclusive partnership with Uber Eats.
The move expands the Shack Track service, which allows guests to pre-order groceries for collection from the walk-in windows, on the curb, or on store shelves. The nationwide launch follows tests in Miami and New York.
Customers who order in the Shake Shack app can track their order in real time and pay either a flat delivery fee of 99 cents or free delivery on orders over $ 35 – competitive prices in a part of the industry that favors high fees is known.
“We found that they are incredibly good at this this year, especially in the places where we are strongest,” said CEO Randy Garutti of the decision to partner with Uber Eats.
Shake Shack is testing a 5% surcharge on third party delivery, making in-app orders the best price for customers. Free fries will be offered on orders over $ 15 in the Shack app through the end of this month.
Shake Shack’s digital sales have grown over the past year, accounting for nearly 60% of total sales in the fourth quarter. In the third week of February, sales via app and website have increased by more than 300% year-on-year since the beginning of the year. From March 2020 through January, Shake Shack added 2 million first-time customers to its digital channels, the company said.
This growth helps Shake Shack improve its performance. According to the latest earnings report, stocks rose as sales rose to $ 157.5 million. While sales in the same store continued to struggle with a 17.4% decline, the decline wasn’t as sharp as it was in the third quarter.
Shake Shack stock is up more than 277% over the past year, increasing its market value to $ 5.2 billion as of Tuesday’s close.
Garutti said the company has invested heavily in digital investments to reduce friction. He believes that in-app delivery will help customers break into Shake Shack’s infrastructure, help the company better understand their preferences, and make it easier to market directly. As part of its investment, Shake Shack is partnering with Uber Eats to expand its technology development team.
“A year ago we were 20% digital and 80% personal. Overnight we switched to 80% digital and 20% in person,” said Garutti. “We then really tried to ramp up the digital toolbox and accelerate it. … We want to bring people into our ecosystem.”
Although Shake Shack is preparing for a more personal business with the introduction of vaccines, the company wants to be prepared to fulfill its customers’ orders in a variety of ways, and digital will continue to be part of the personal experience, Garutti said.
The game book is similar in other restaurants that have seen strong digital growth, including Domino’s, Papa John’s, Chipotle, and Cava, as consumer preferences are likely to change permanently due to the pandemic.
Shake Shack has a smaller footprint than many of these competitors, with fewer than 200 locations in the US. In 2021, the company plans to open 35 to 40 company-operated shake shacks and 15 to 20 licensed restaurants.
Shake Shack’s suburban locations fared better than urban restaurants late last year, but the company will develop new locations in both areas, Garutti said.
“I want to do anything. Our headline is” Driving Development Everywhere. “We’re going to be opening a restaurant in Bryant Park next week, and that’s the heart of Midtown – the hardest hit place,” he said. In the meantime, work is also underway to open drive-thrus in the suburbs in the coming years to increase presence.
“I firmly believe that the world’s big cities will return,” said Garutti.