From Summer Camp Kits To Homemade Burgers, Shake Shack’s CMO Is Getting Innovative With E-Commerce

Shake Shack

By Marty Swant, Published on Jul 23, 2020

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“While summer camps are closed because of the Covid-19 pandemic, Shake Shack is sending some of the traditions home.

The New York-based burger chain has created a six-week program for kids and adults alike called Shack Camp, a box of activities and food that recreates rituals of the hot summer months like lemonade stands, ice cream sundaes, crafts, campfire materials, water balloons and, of course, burger discounts. There are also materials to help kids to become more socially conscious in light of recent discussions around racial injustice by becoming a “Shacktivist.”

According to Chief Marketing Officer Jay Livingston, the idea for the $79 boxes came about in just five weeks and was created with the agency Circus Maximus, which Shake Shack recently began working with on another project. As a part of the program, Shake Shack and its partners including Uber Eats and Oreo Cookies are also pledging $75,000 to the virtual summer program of the Fresh Air Fund, a nonprofit that helps send kids from low-income communities to summer camps.

“We’ve always had an interesting relationship with kids,” Livingston says. “Kids love Shake Shack, but we don’t pander to them in any way. We don’t do toys or happy meals or have a kids’ menu, but we like to treat kids almost like adults, like adult food and introduce them to culinary experience an adult would have. The box sort of takes that same approach: There aren’t toys in the box. It really is about kind of elevating the things you can do in the summer.”

To promote the boxes, Shake Shack has been releasing videos on Facebook and Instagram, along with promoting the company’s related summer S’More milkshake. Livingston wouldn’t disclose box sales since the program first began, but he says he’s seen interest in Shake Shack’s strongest markets like New York, Washington, D.C., southern Florida, Texas and Chicago.

Shake Shack has launched a number of new e-commerce initiatives during the pandemic. In March, for example, it began selling boxed kits of burgers to cook at home through a partnership with Goldbelly, an online marketplace that sells foods from restaurants, bakeries and delis around the U.S.

“We had discussed it in the past, but the moment hadn’t felt right,” Livingston says. “But we definitely got that moment and said, 'How are we going to do this?’”

Like many restaurants in the U.S., Shake Shack has seen a major shift since March, going from a place known for its big crowds and long lines to something that’s more digital through app-based based ordering for pick-up and delivery. On March 16, the company closed all dining rooms and switched to to-go only. By April 29, Shake Shack had temporarily closed 17 domestic locations along with 61 of the 120 licensed locations, according to the company’s second-quarter results. However, it entered into new partnerships with delivery platforms, including Uber Eats, while expanding work with Postmates, DoorDash, Caviar and GrubHub. Shake Shack has also increased some of its digital spending, not to mention its activity on platforms such as TikTok and other organic channels. For example, a new video series shot on an iPhone feature Shake Shack’s top chefs showing how to make recipes from home.

Working remotely has prompted Shake Shack's marketing and innovation teams to get creative with how they taste-test new products. While they are now doing some small, in-person tests at an innovation kitchen in Manhattan, the company is sending prototype products to executives to try or even make themselves at home. The company also managed to open four new locations in the second quarter in Sacramento, Los Angeles, Charlotte and St. Louis.

Business has picked up in recent months. According to a filing with the Securities and Exchange Commission from early July, the company reported an average of $32,000 in weekly sales by late April, $50,000 by late May, $52,000 by late June and $58,000 by early July. And while weekly sales were down 56% year-over-year in April, that gap had closed to 22% by July. Total revenue for the second quarter that ended on June 24 totaled $91.8 million, according to corporate filings, which also mentioned nationwide protests and curfews “negatively impacted” sales of around $3.2 million. The company had also initially accepted a $10 million Paycheck Protection Program (PPP) loan under the CARES Act on April 10, but returned it by April 27.

Shake Shack was also briefly swept into controversy during the June protests in New York when several NYPD officers accused the company’s employees of putting bleach in their milkshakes. However, an internal investigation by the NYPD and Shake Shack quickly found that there were no cleaning products or other harmful substances found in the shakes. “We’re really proud of our practices about safety and sanitation in the shacks, so we take it really seriously when there is an incident like that,” Livingston says.

“That is something that we’re still talking with them about,” he adds. “It’s one of those things where you want to react quickly and want to get the truth out there be very fast and be very transparent and open and honest about everything that’s happening.”

The past several months have been “a tale of constant ups and downs, two steps forward, one step back,” according to Livingston. After enhancing digital capabilities and delivery, sales perked up. But when protests hit, sales dropped in some locations with affected shacks. Now, as restaurants reopen their outdoor and, in certain cases, indoor seating some parts of the country are forcing Shake Shack to close dining rooms yet again.

“We’re moving in the right direction,” he says. “But it’s just been a constant series of ways to innovate. We’re really trying to treat it as an opportunity to do things we know we need to do anyway for the long term.”