In the year ahead, Shake Shack is turning its focus to boosting in-restaurant ordering options, investing in self-service kiosks and its new drive-thru concept, even as own-device digital purchasing dips from its quarantine highs.
In announcing its fourth quarter 2021 earnings on Thursday (Feb. 17), the New York City-based fast-casual chain shared that, even as overall sales rose, digital sales were down 20% in December 2021 from their January 2021 high. Still, own-device digital sales made up 42% of total sales, and digital sales including self-service kiosks accounted for 60%.
“We’re really excited about kiosk, and about half of our Shacks today have kiosks,” the brand’s CFO, Katie Fogertey, told analysts on a call.
Given that, per the digital mix numbers, kiosks apparently accounted for 18% of sales, it seems these devices bring in about 36% of all sales in the restaurants that have them, and the company plans to drive that figure up going forward.
“We don’t really view kiosks at this point in time as being just a cost savings initiative,” said Fogertey. “It’s more about the sales lift that we see on the back of it and the opportunity to drive deeper our digital strategy… We see higher attach rates with our LTOs through this channel. We can see that guests really understand the menu items and really kind of engage with us in a really exciting way.”
The majority of restaurants either have self-service kiosks or plan to invest in them in the future, according to data from PYMNTS’ new Restaurant Friction Index, created in collaboration with Paytronix. The study, which drew from a survey of more than 500 managers of quick-service and full-service restaurants, found that 30% of restaurants have self-service kiosks and 34% do not yet have them but plan to invest in them in the future.
Read more: New Data Show Digital Loyalty Programs Are Key Differentiator For Top-Performing Restaurants
Additionally, the company now has three drive-thrus up and running, and plans to have 10 by the end of the year. The concept is a significant investment as the company figures out how to make the channel work best for its business.
“We’re…going to keep building restaurants to optimize for learning, specifically with drive-thrus, that will cost us more for a while as we build those,” the chain’s CEO Randy Garutti said on the call. “So, we’re not trying to cut anything out of that learning. We’re trying to spend money to learn to open up the addressable market.”
The Restaurant Friction Index found that about half of restaurants offer the ability to pick up orders at the drive-thru. The study also drew from the results of a survey of a census-balanced panel of more than 2,100 U.S. consumers, where 35% of these consumers said they would be more inclined to shop with restaurants that offer drive-thru pickup. Additionally, the study found that 18% of the restaurants that do not offer drive-thru pickup intend to add the feature in the future.
Similarly, research from the most recent edition of PYMNTS’ Digital Divide study, The Digital Divide Report: Technology As A Catalyst For Restaurant Purchases, also created in collaboration with Paytronix, revealed that 38% of restaurant customers say that rewards programs would encourage them to make more purchases.
Moreover, the study, which drew from a census-balanced survey of more than 2,400 United States adults conducted in early December, found that one in four restaurant customers said the same of self-service kiosk ordering.
See also: PYMNTS Intelligence: How Eateries Can Tap Order Throttling Tools as Delivery Demand Grows
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