Chai, Nah, Wu, Zhang

Table of contents 1. Introduction2. Methodology3. The Consumer and the Category4. Trends Affecting the Category5. Key Findings About Shake Shack6. Shake Shack

a. Web Pressb. Social Mediac. Voices From Consumersd. Major Competitors

7. Perceptual Map8. Opportunities and Challenges9. Brand Vision Statement

10. Creative Brief11. Bibliography12. Appendix

Introduction

Shake Shack, beginning as chicago-style hot dog stand in Madison Square Park in New York in 2001, opened its first permanent store in 2004. It made its initial public offering on Wall Street in January 2015. As a fast-casual restaurant that sells higher quality food at higher prices, the burger chain is famous for its ShackBurger, with 100% all-natural Angus beef patty, as well as frozen custard, and crinkle-cut fries.1

MethodologyPrimary Secondary

In-store observations● Saturday, November 21, 2015. 11am-12pm● Thursday, December 3, 2015. 3:30pm-6:30pm

Focus group discussions (All conducted on Friday, December 4, 2015)● Users - 4 females and 2 males● Non-users - 3 females and 1 male

1-on-1 interview● Friday, December 4, 2015● Male, 23, BU SMG student

Brand Audit● Shake Shack website● Shake Shack Facebook, Twitter, Instagram● Web Press● Mintel● MRI+● Competitive analysis

Trends research● Mintel● Adweek● AdAge● JWT Trendwatching

➢ Fast casual restaurants○ A hybrid section of fast food and casual dining restaurants.○ Emerged during the last 20 years.○ Upgraded services and nicer dining environments along with better quality foods.2

○ Originally only bigger and better quality burgers in this category, but now bakery cafes and delis, Mexican and

Asian cuisines, and pizzas have joined.3

○ Offers the promise of fresher food that is prepared more on-site, that is sourced more sustainably.4

○ The fast casual model is particularly appealing to Millennials who tend to care less about price than about

ethics.5

➢ Located in urban and suburban settings within certain geographic area○ Many fast casuals do not participate in nationwide advertising except some fast casual giants.6

➢ Fast casuals are growing in popularity

○ Better quality foods and environments have made fast casuals the only segment of the restaurant industry

that has a steady year-by-year growth since 2009, with a peak up to 8 percent in 2013.7

The Consumer and the Category

Target Audience of the Category● Fast casuals tend to attract more millennials than other demographics.8

○ More than half of fast casual consumers are millennials ranging from financially dependent teens to married homeowners with children.

● Value freshness and nutritional ingredients 9

● Increased fast casual usage and on-the-go snacking 10

● Most of them are in middle-class, who value variety, speed, and customization 11

● LTOs (Limited-Time Offers) , and group deals 12

● Mobile and online tools 13

● Value corporate social responsibility (CSR) of fast casuals 14

○ “Restaurant’s responsibility to make ethical choices, even if it will not make as much money doing so.”○ Appeal to restaurants that focus on charities, causes, and other initiatives.○ Fast casuals should also promote these initiatives in easy-to-access places that young consumers frequent,

such as their website, mobile application, and social media sites.

➢ Fast-Laning○ Focus group respondents indicated their impatience in waiting in lines. They prefer to stay away from crowded restaurants.15

➢ 95% of people find food safety the most important factor to dine at fast casuals.16

➢ As consumers are more aware of their health, 72% of people are now demanding the nutritional information, especially gluten free option in fast casuals’ menus.17

➢ Consumers increasingly appreciate local sourcing○ It indicates that restaurants are not only providing fresher and nutritious ingredients, but also supporting local farmers and

community.18

➢ While the higher quality of foods meet consumers’ expectations, consumers are more likely to accept relatively higher price in fast casuals compared to other types of restaurants.19

➢ BOGO (Buy One Get One Free) deals, printed coupons, and daily special pricing ○ These deals will be more likely to attract consumers to fast casual restaurants when they decide where to eat.20

○ 7 out of 9 focus group respondents indicated that they are more likely to go to fast casuals with coupons.21

➢ Foodie Movement○ The food photography on social media is on the rise, especially with Millennials who are interested in the taste and aesthetics

of the food they eat.22

➢ Currencies of Change○ People want to be a part of a positive social movement but would also like to be rewarded for their good deeds.23

Trends Affecting the Category

➢ Consumers value the variety and freshness of the food and the convenience of ordering.24

○ Finding the balance between cost and quality, fast casual consumers also consider affordability.○ 77% of them do not mind waiting in a long line for high quality food, and 47% are willing to pay for premium toppings○ 67% would order healthier yet cheaper food.22

○ 71% are interested in healthier substitutes for sides at no additional cost, such as healthier fries and smoothies.

➢ Natural and minimally processed foods 25

○ Many limited service restaurants begin to offer food that is raised and prepared naturally.

➢ Customization through selections of toppings, sauce and combo items suffices the need for variety.26

○ 78% agree that the freedom to customize their food encourages them to try new menu items.○ 82% like to choose their own toppings and 55% their own sauces.

➢ 54% of the consumers want the restaurants to make traditional or signature items with ethnic or regional twist.27

➢ An enjoyable experience in the restaurant is desired.28

○ 56% of people who visit limited service restaurants like to consume orders in the restaurant. Many restaurants offer pleasing atmosphere, theater, and even interaction to create a better in-store experience.28

➢ Technology-driven ordering 29

○ While only a few of fast casual restaurants are experimenting this service, a number of them have already incorporated technology to help customers order in store.

○ Some have begun to add in-store tablets as well as mobile apps not only to help customers place orders more efficiently, but also to collect market data.

Trends Affecting the Category

Internal intelligence 30

“Great company that acknowledges your work ethics, they pay attention to their employees and want to see them succeed and be better.” By former supervisor/trainer from Manhattan, NY

“This was definitely a fun environment. My co-workers became my family, and our guests were our priority. The benefits were also great. I would love to work here again.”

By former employee from New York, NY

“Great customers great staff, long hours, 60% off on the food which is great because they have great burgers. I enjoy working here the atmosphere is a positive one and not all jobs are like that.” By current employee from Cambridge, MA

Mostly mentioned pros – 60% off food, great employee benefits, cool atmosphereMostly mentioned cons – long shifts, short breaks, poor management

Community Efforts - “Stand For Something Good”

No Kid Hungry Organization Support 31

Local Charities. E.g. The Youth Link 32

Sustainability: Recyclable packaging keeping it eco-friendly 33

Focus group discussion 34

”The atmosphere is laid-back and makes me comfortable”“The quality of the food is better than other restaurants”“I care about eco-friendliness and sustainability, and so does Shake Shack”

Key Findings about Shake Shack

“Shack, Born in a Park, Is Going Public With Big Dreams” by Michael Merced and Kim Severson, January 29, 2015

● Highlighting the financial success of Shake Shack

● Will begin trading on the New York Stock Exchange with a valuation of about $745 million

● Will increase Danny Meyer’s, the CEO, net worth by about $155 million

Shake Shack: Web Press

“Shake Shack invites NYC’s top-chefs for five days of gourmet-burgers” June 3, 2014

● Shake Shack’s effort in executing creative events

● To celebrate Shake Shack’s 10 year anniversary, Shake Shack recruited five chefs to create five special edition burgers at Madison Park Avenue location.

“I tried Shake Shack and In-N-Out side by side, - and it’s clear which one is better” By Dennis Green, September 2, 2015

● Shake Shack being a tourists must-go spot in east coast

● An endless debate between East and West

● East coast won

“Shake Shack is shaking up wages for US fast food workers” by Kim Gittleson, January 30, 2015

● Spotlighting Shake Shack’s better treatment of employees

● Shake Shack pays significantly higher wages than the New York State minimum wage to its employees

● Shake Shack believes that better services come from better-qualified employees

● Frequent posts everyday (3 posts at most)

● Not much interaction● Many likes on the page (158,831

people liked Shake Shack) but not on each post (10-400 likes)

● Frequent posts (almost everyday, more posts than Facebook per day)

● Less interaction than Facebook (very low)

● 48.8k followers

● Most Frequent posts everyday (similar frequency with Twitter but every day)

● Most interaction than any other social media

● At least over 1k likes (range between 1k and 5k)

● 222k followers● Hashtags: #shakeshack,

#shakeshackburger, #shackshack/city, #shakeshacklove, #shackmeetup, #shakeshacking, #shakeshackisbetter, #shackfan

Shake Shack: Social Media

Positive

Voices From Consumers Negative

Major Competitors

Y-Axis: Quality encompasses the taste, freshness, and ingredients of the food.

X-Axis: Price denotes an average cost of a meal in each restaurant, which includes a main item (e.g. burger, burrito, and sandwich), a side (e.g. fries), and a drink.

* This map is based on relative values.

Perceptual Map

High PriceLow Price

High Quality

Low Quality

Challenges➢ Low brand awareness among non-users

○ Non-user respondents associated Shake Shack with “seafood,” “California,” and “beach,” instead of a burger restaurant.35

➢ A blurred borderline between fast food and fast casual food○ Both users and non-users claimed that “burgers are burgers” even though fast casual have better quality. 36

○ It has become harder to distinguish fast casual food and fast food as more fast food restaurants are making their ambience more similar to fast casuals.37

➢ Proximity○ Customers are less likely to go to Shake Shack for the sole purpose of in-store dining, since Shake Shack does not own as many

sites as other fast casual restaurants.38

○ Shake Shack has not capitalized on its mobile app, which does not offer an ordering feature.39

➢ Price increase starting in January 2016 40

○ Since Shake Shack’s current price is higher than the average price of the fast casual restaurants, it may lose customers.

➢ Low recognition in Shake Shack’s sustainability and community efforts 41

○ As many fast casuals participate in sustainable movement, such as using recyclable packages, Shake Shack does not stand out as a distinct eco-friendly restaurant chain.

○ Except heavy users of Shake Shack, consumers do not know that Shake Shack participates in community supporting activities. e.g. No Kid Hungry Movement

➢ Incorporate technology reflecting “fast-laning“ trend, as it inspires many of its competitors.○ Installing tablets in stores

■ Ordering from tablets considerably shortens long lines ■ For health-conscious consumers, nutritional value listed on the tablet will provide a better experience.

○ Shake Shack mobile app■ Much developed than the current app, an updated version will feature rapid pick-ups, ordering from a table, and delivery

options. ■ A majority of focus group respondents indicated that takeouts are their go-to option.

➢ As a reflection of both the “foodie movement” and “currencies of change” trends, where consumers post pictures of what they eat and start a movement (i.e Ice Bucket Challenge), Shake Shack should:○ Increase consumers’ awareness of its eco-friendly and CSR activities by starting a social media campaign with

#ShacktheWorld, along with a short description of how they stand for something good by:■ Inviting consumers to post pictures of themselves eating Shake Shack.■ Offering consumers BOGO as rewards.

➢ Following the trend of “customization,” Shake Shack should offer more customizablechoices that cater to the different needs of people.○ Vegetarian options: lettuce wraps, salad-style burgers○ Gluten-free, non-GMO options

Opportunities

Core Identity● Brand Soul: Fine casual dining chain offering premium fast-food that sponsors local charities.● Brand Values: Natural ingredients, excellent taste, humanitarian.● Point of Difference: Giving back to the community. This is very important in the consumer’s mind because they want to take part of a

bigger movement that leads to positive change while simply enjoying a burger.

Extended Identity● Personality: Shake Shack is the cool friend who is up-to-date with current trends. He is a recent college graduate. He values

efficiency. He pays attention to what he eats, and where the ingredients are from. During the weekends, he isinvolved in community service.

● Brand Positioning: Engaged fast casual restaurant.

Consumer Relationship● Functional Benefits: Consumers get tastier and healthier burgers than other fast casual restaurants.● Emotional Benefits: Consumers feel good about themselves because the food they purchase contribute to the local community. ● Consumer/Brand Relationship: The friend who will always make you feel good.

Rationale Shake Shack sets itself apart from other fast casual restaurants not only by its superior taste and quality, but also by its commitment in all of their locations to contribute to the local community. These two differentiating factors of Shake Shack resonated with the focus group respondents.

Brand Vision Statement

Creative Brief Business challenge A blurred borderline between fast food and fast-casual food. Communications objectives To combat the perception that “burgers are burgers.”

To emphasize Shake Shack’s CSR activities.

Brand essence Fine casual dining chain offering premium fast-food that sponsors local charities. Target audience Urban health-conscious Millennials who have active lifestyles, interested in food, and have

at least three social media accounts.

Key insight The idea that Shake Shack offers better burgers is not a decisive purchase motivating factor; by emphasizing the social engagement of Shake Shack, people will have more incentive to visit the store.

The Big Idea Make Your Cheat Day Worthwhile Motivating support Consumers focus more on nutrition facts rather than really enjoying the food; everyone

needs a break from calculating calories.Consumers want to take part of a social movement that leads to good actions.

High quality ingredients + active community service engagement = better lifestyle

Current and desired responses From : “Burgers are burgers” To: “Not all burgers are the same. Shake Shack burgers are more than just burgers.”

Execution considerations Out of Home (OOH), Social media campaign, Youtube Ad

THANK YOU

1. CNN Money2. Restaurant Business3. Mintel4. BBC 5. Ibid6. Tribune Business News7. Ibid8. Restaurant Development + Design9. Mintel10. Ibid11. Ibid12. Ibid13. Ibid14. Ibid15. Focus Group16. Mintel17. Ibid18. Ibid19. Tribune Business New20. Mintel

Index21. Focus group22. Mintel23. JWT24. Mintel25. Mintel26. Ibid27. Ibid 28. Ibid29. Ibid 30. Indeed 31. No Kid Hungry32. Shake Shack 33. Focus Group34. Ibid35. Ibid36. Ibid37. Mintel38. Focus Group39. Shake Shack40. Eater41. Focus Group

Bryant, Caleb. “Innovation on the Menu.” Mintel Oxygen. October, 2015. Accessed December 5, 2015.Casper, Carol. “Fast-Casual.” Restaurant Business. December 1, 1997. Accessed December 5, 2015.De La Merced, Michael J. and Kim Severson. “Shake Shack, Born in a Park, Is Going Public With Big Dreams.” New York Times. January 29, 2015. Accessed December 5, 2015.Deven. “Boloco vs. Chipotle.” Uncommon Discussion. July 2, 2012. Accessed December 5, 2015.Dwyer, Lexi, and Alessandra Bulow. “The end of tipping? What Danny Meyer's no-tipping policy really means.” Today Food. October 14, 2015. Accessed December 5, 2015.Facebook. Accessed December 5, 2015.Fast Food Menu Prices. Accessed December 5, 2015.Filloon, Whitney. “Shake Shack Is Hiking Menu Prices to Support Higher Wages.” Eater. November 12, 2015. Accessed December 5, 2015.Fox Sports. “The Audible: Let's settle this once and for all: In-N-Out or Shake Shack?.” September 3, 2015. Accessed December 5, 2015.Gallo-Torres, Julia. “Healthy Dining Trends.” Mintel Oxygen. July, 2015. Accessed December 5, 2015.Galarza, Daniela. “Shake Shack Has Never Been Hotter; The Fashion Police Found Mario Batali.” Eater. November 6, 2015. Accessed December 5, 2015.Garman, Valerie. “Fast Growth in ‘Fast-Casual’ Food.” Tribune Business News. January 08, 2014. Accessed December 5, 2015.Gittleson, Kim. “Shake Shack is shaking up wages for US fast-food workers.” BBC News. January 30, 2015. Accessed December 5, 2015.Goldberg, Elyssa. “This Cheeseburger Is Made With Vegetable Scraps.” Bon Appetit. May 28, 2015. Accessed December 5, 2015.Green, Dennis. “I tried Shake Shack and In-N-Out side by side — and it's clear which one is better.” Business Insider. September 2, 2015. Accessed December 5. 2015.Greenhouse, Steven and Stephanie Storm. “Paying Employees to Stay, Not to Go.” New York Times. July 4. 2015. Accessed December 5, 2015.Indeed. Accessed December 5. 2015.

Bibliography

Instagram. Accessed December 5, 2015.JWT Trend Watching. “10 TRENDS FOR 2015." Accessed December 5, 2015.Kowalski, Tom. “Millennials and the Fast-Casual Experience.” Restaurant Development + Design. May/June, 2015. Accessed December 5, 2015.La Monica, Paul R. “Burger mania: Shake Shack stock up 120%.” CNN Money. January 30, 2015. Accessed December 5, 2015.Lutz, Ashley. “How much it costs to eat at every major fast food chain.” Business Insider. September. 4, 2015. Accessed December 5, 2015.Malone, Ian Thomas. “Boloco vs. Chipotle: Which Wins the Battle of Cleveland Circle?” The Rock at Boston College. November 8, 2011. Accessed December 5, 2015.Metro US. “Shake Shack invites NYC's top chefs for five days of gourmet burgers.” June 3, 2014. Accessed December 5, 2015.Morrison, Maureen. “Fast-casual chains gobble up catering biz.” Advertising Age. April 22, 2013. Accessed December 5, 2015.Myers, Dan. “This Is the Secret to Shake Shack’s Success.” The Daily Meal. November 19, 2015. Accessed December 5, 2015.Narain, Tarika. “5 Reasons Why Chipotle Can’t Compete with Boloco.” Spoon University. February 26, 2015. Accessed December 5, 2015.Restaurant Business. “Fast-Casual.” October 1, 2005. Accessed December 5, 2015.TMZ. “MILKSHAKE SQUIRREL.” September 23, 2015. Accessed December 5, 2015.Topper, Amanda. “The Millennial Impact: Food Shopping Decisions.” September, 2015. Accessed December 5, 2015.Trefis Team. “How The Fast Casual Segment Is Gaining Market Share In The Restaurant Industry.” Forbes. June 24, 2014. Accessed December 5, 2015.Twitter. Accessed December 5, 2015.Wall, Bethany. “Fast Casual Restaurants.” Mintel Oxygen. October, 2013. Accessed December 5, 2015.Wall, Bethany. “LSR: Burger, Chicken and Seafood Concepts.” Mintel Oxygen. August, 2014. Accessed December 5, 2015.Wong, Venessa. “With Fast Food Wages Rising, Shake Shack Will Raise Prices Again.” Buzz Feed News. November. 10, 2015. Accessed December 5, 2015.

Bibliography

Appendix A: Exploratory in-store observationSeasonal interior design consistent throughout the store

The attention to detail, even on buzzers

Seasonal menu Christmas tree on the counter

Appendix A: Exploratory in-store observation

Every table is engraved with the inscription: “Handcrafted in Brooklyn, NY. This surface was once part of a

bowling lane.”

“Recycle” signs visible near the trash

Shake Shack’s eco-friendly effort Welcoming interior design: Signage

Ambient lighting, four televisions installed

User experience:➢ What do you like about this store? The menus?

○ The interior design? ○ The mood? ○ The background music? ○ The technology (the buzzer)? Order online, in-store pickup option? Tablets? Ability to order through mobile apps?○ What do you think about Shake Shack’s involvement in social causes? (ex: Bay)

Projective techniques:➢ Persona: What type of a person / Who do you think will come here?➢ Words: What adjectives come to your mind when thinking about Shake Shack?

What other places would you have considered when deciding to come to Shake Shack?

Did you intentionally come to Shake Shack or did you just come in because it was nearby?

Appendix B: 1-on-1 Interview Guideline

Introduction➢ Thank you for participating in this focus group. All the information gathered during this focus group discussion will only be used for academic purposes. Our goal is to do a brand

analysis of a fast-casual restaurant, Shake Shack. We will first talk about the broader category, then do two little creative exercises about the brand and brand category, and finish up with specific questions related to Shake Shack.

Broad questions about the product category➢ What is important for you choose self-service restaurants (taste, speed, healthy ingredient, variety of menu, sit-down option)➢ When do you dine in self-service restaurants? Why?➢ What do you like/dislike about self-service restaurant? Why?➢ What’s your favorite self-service restaurant? Why?

Sticky notes➢ Adjectives that come to your mind when thinking about Shake Shack➢ What qualities do you look for in a fast casual restaurant?

Grouping Exercise➢ Let’s come up with names of self-service restaurants you could think of. Group them and provide us reasons why you grouped them like you did.

Personifying Exercise➢ What kind of person reminds you of Shake Shack? If Shake Shack is a person, can you imagine this person’s gender, age, job, hobbies, outfits, where would you expect to see this

person, etc. Please individualize this person. You can also draw a picture of a person Shake Shack!

Questions specifically relating to Shake Shack➢ How often do you eat at Shake Shack?➢ Do you prefer Shake Shack over the others? Why?➢ Why do you go to Shake Shack?➢ How do you think Shake Shack can improve from what they are doing now?➢ What do you think about Shake Shack’s eco-friendly containers/packages? Does this positively affect the brand image of Shake Shack? ➢ Are you aware of Shake Shack’s community support? like “Stand for Something Good” and #nokidhungry campaign. ➢ Does Shake Shack’s community effort make you want to go there more?

Appendix C: Focus Group Interviews Guideline

Appendix C: Focus Group FindingsUsers

Prompt: List all fast restaurants that come to your mind (unaided recall). Then, please group them according to what you think make them similar to each other.

Group 1 (healthier menu, tasty menu): Chipotle, Qdoba, CanesGroup 2 (quick grab-n-go, lower quality): Panda Express, KFC, BurgerKing, McDonald’sGroup 3 (not really good, variety of meny): GSU, Warren TowersGroup 4 (desserts place): Dunkin DonutsGroup 5 (healthy sandwich): SubwayGroup 6 (burger and fries, higher quality): UBurger, BurgerFi, Five Guys, In & Out

Appendix C: Focus Group Findings

Words that first come to mind thinking about Shake Shack

Non-usersPrompt: List all fast restaurants that come to your mind (unaided recall). Then, please group them according to what you think make them similar to each other.

Group 1 (healthier menu, more expensive): B.good, Sweetgreens, Uburger, BurgerFiGroup 2 (sit-down places, more meal-like menu): Zest, PaneraGroup 3 (Mexican, healthy ingredients): Chipotle, BolocoGroup 4 (most known, cheap and fast, average quality): Dicos, McDonald’s, Popeyes, Canes

Grouping exercise