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Shake Shack Mobile App Downloaded 200K+ Times During Initial Rollout

During Shake Shack's fourth quarter earnings conference call on March 1, CEO Randy Garutti discussed the success of its mobile app. As guest expectations continue to change, Shake Shack said it is focused on removing constraints and friction points that previous generations accepted as a "way of life." Currently, the Shake Shack app is focused on mobile pre-ordering. It had a soft launch nationwide during the fourth quarter of 2016 but the company was "deliberately quiet" about it as it worked out some of the kinks within the technology and prepared for a larger launch. In mid-January, the company was ready to begin promoting the app. To get customers to download the app, the company offered a free Shack burger anytime the app was downloaded.
"Through February, the Shack App has been downloaded over 200,000 times and we've given away nearly 90,000 free Shack burgers which has translated into approximately 6% of our total orders nationwide," Garutti said.
The company expects that percentage to decline now that the free burger promotion has ended. But, according to Garutti, after excluding the free burger promotion, the company's average mobile app transaction during January and February has been approximately 15% higher than a normal Shake Shack transaction. Additionally, since the launch, more than 25% of app users have already come back for repeat visits.
The company also learned that when it launches the app at a brand-new Shake Shack, it sees some the highest rates of adoption across the system, increasing the company's confidence regarding what mobile will mean in the future.
"However, this new stream of orders does not come without challenges," Garutti added. "The influx of app orders can, at times, have a slowdown impact at our highest volume Shacks at peak. This is not a surprise to us, especially during this free burger promo in Q1 and we've experienced many days where we've given out over 5,000 free burgers."
To combat this, Garutti said Shake Shack is focused on evolving its operations, its kitchens and its app flow for the for the long term.
"In short, the Shack App is off to an incredible start," he added. "It is just one part of our long-term strategy to meet our guests whenever and wherever they are."
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