Shake Shack has seen constructive same-store gross sales development for a number of quarters, however its underinvestment in promoting in comparison with bigger fast-food and fast-casual friends prevented the burger chain from realizing its “true potential,” in keeping with CEO Rob Lynch.
“This model has by no means had top-of-funnel paid media launched at scale,” Lynch stated on the corporate’s most up-to-date earnings name. “It’s laborious to imagine, however all of the advertising and marketing has at all times been phrase of mouth, earned media and bottom-funnel … promo activations, and so we leaned in on making a few of these investments and so we’re ecstatic with the outcomes.”
Serving to to supercharge the paid media funding is a partnership with Google. By utilizing the tech big’s Net To App Join providing, synthetic intelligence-powered search optimization and Efficiency Max advert merchandise, Shake Shack has pushed a sixfold enhance in app conversions and a 2.5x enchancment in return on advert spend. The improved efficiency speaks to how the chain is taking advantage of its app and turning it right into a driver of long-term development.
“We had been investing much more in media to drive app downloads, to drive customers again into the app,” stated Lisa Whittaker, Shake Shack’s senior director of digital advertising and marketing. “As we proceed to speculate extra, how will we make sure that we’re spending cash on high quality site visitors? How will we ensure that we’re not simply losing cash, that we’re dropping them into one of the best expertise attainable inside our app?”
Push to the app
Shake Shack, which was formally based in 2004 after a number of years as a scorching canine cart in New York, launched its cellular app nationally in 2017. Such choices have change into more and more essential instruments for eating places as a result of pandemic-accelerated shift towards digital and cellular channels and as first-party buyer knowledge turns into extra priceless to entrepreneurs.
For Shake Shack, including worth and advantages to the app is an extension of its strategy to on-premise hospitality. App customers get entry to limited-time presents 4 days forward of most people, amongst different options. To showcase the funding within the app expertise, the chain wished to take away the friction between cellular internet site visitors and app conversion.
“We’ve seen the habits when company obtain our app and open it up, that conversion habits is fairly important for us. We all know that [when] company are downloading our app, they’re anticipating further worth advantages,” Whittaker stated.
Google’s Net to App Join software made “excellent sense” for Shake Shack. Cell customers who have already got the Shake Shack app downloaded and click on on paid adverts are linked to related app pages, comparable to presents and in-app challenges, giving them entry to a extra customized expertise.
“We’ve got seen the extra worth of when someone is an app person versus once they simply go to our web site. The app gives us a further communication contact level to actually make sure that we’re driving consciousness round among the key options or presents that that we’re doing inside the app,” Whittaker stated.
Shake Shack has used particular presents to drive each app downloads and same-store gross sales. In Might, the chain ran a month-long promotion round Nationwide Burger Month that, coupled with a $1 soda promotion, helped drive a 20% app set up enhance. Equally, Shake Shack has seen a 16% month-over-month enhance in month-to-month lively customers when executing such presents via the app, Whittaker stated.
“All of the actually essential life cycle advertising and marketing metrics we have a look at, all the info, has been extraordinarily constructive,” she stated.
Shifting ahead
Shake Shack says its efforts to show internet customers into app customers has been boosted not simply by Google’s Net To App Join software but in addition by the tech big’s AI-powered search optimization and Efficiency Max advert merchandise. Whereas the chain has seen constructive outcomes from its experiments, different entrepreneurs have expressed concern with the black field nature of those instruments.
“It’s a journey to get snug with the ‘uncomfortableness’ and have a few of that lack of management and fewer visibility. As digital entrepreneurs, we’re going to need to determine it out,” Whittaker stated. “Everyone is scrambling proper now as a result of the know-how is shifting so quick.”
For Whittaker, that discomfort is eased by an excellent relationship with Google’s advert group, which she feels is invested of their enterprise, in addition to the flexibility to leverage plenty of knowledge rapidly due to AI. That stated, utilizing the instruments is a continuing studying course of.
“The leads to the info don’t lie, so if there’s one thing funky occurring with AI, it’s going to point out up sooner or later,” she stated.
The usage of these instruments comes as Shake Shack executives have made a dedication to ramping up advert spend, particularly from an upper-funnel perspective. Digital advert spend permits the chain to raised service a retailer footprint that extends past high-traffic areas like New York and Los Angeles into 51 different markets across the U.S. Early funding is already yielding positive aspects.
“We’re getting plenty of totally different halo advantages from the media itself, exterior of driving site visitors and gross sales, which is the primary objective,” Whittaker stated. “I’m so excited for all of the learnings that we’re getting, as a result of that is actually going to tell our mannequin going into 2026.”
