A little over a year ago, Shake Shack opened its first-ever location powered by self-service kiosks in the East Village. At the restaurant, all ordering and payments were made through digital kiosks — no human intervention necessary.
Except human intervention actually was totally necessary. In a matter of months, customers practically declared mutiny and Shake Shack abandoned the concept. “The kiosks are also supposed to make things go quicker, but the wait is even longer,” one commenter noted.
But it seems the Danny Meyer-backed chain is giving the concept another go. This week Shake Shack announced it will expand its kiosk locations; but with some differences from the pilot.
Most notably, the selected stores will feature a more hybrid concept, offering both cashiers and kiosks. This combo is a wise move on Shake Shack’s part, since kiosks still cause a fair share of confusion and there are many who would benefit more from interacting with an actual person. Guests will also be able to use cash if they prefer, as the card-only payments were a point of grief with the original kiosk-concept location. Right now, Shake Shack currently has five locations that offer this hybrid kiosk-human structure, and plans to open more in areas like San Francisco and Seattle, where labor costs run especially high.
And labor costs will continue to be an issue. On its second-quarter earnings call, Shake Shack reported that those increased year over year by 26.3 percent, partially driven by increases to minimum wage.
That’s where the kiosks come in: “We are learning how the kiosk experience changes the flow in the front-house, the extent to which we are back to speed at service, kitchen throughput, how it best enhances the guest experience, its ability to deliver labor leverage in the future and how ordering behavior may be impacted,” said CEO Randy Garutti.
Automation in quick-service restaurants is becoming more and more commonplace, to make an understatement — and it’s not hard to see why. Analysts say that kiosks could help McDonald’s recoup $2.7 billion in sales. The fast food leader said it plans to add kiosks to 1,000 stores every quarter for the next two years.
And kiosks were all the rage at this year’s National Restaurant Association show, which had products from 365 Retail Markets, Adusa Inc., and Apex. And those are just the first three on the alphabetized list.
Shake Shack stands a somewhat better chance of succeeding with kiosks this time around. That’s partly because they’re still accepting cash and party because people’s perception towards automation has shifted since the first iteration. Consumers in general are more comfortable with kiosk interfaces in 2018 than ever before, whether at the airport or eating lunch.
However, it’s best not to paint too rosy a future at the moment. Shake Shack and others may be touting an ideal solution with these kiosk-cashier hybrid locations, but there are no significant numbers yet on how well the locations will perform. And with labor costs continuing to rise, the pressure to automate more and more restaurant operations will increase. Understanding when and where to do that — and when and where not to — will be key to any fast-casual chain’s success.
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