Shake Shack ends cashless experiment
Shake Shack said last week it was ending its test of a cashless location in lower Manhattan following customer complaints.
“In the first rollout at Astor Place, we did not accept cash at all, and there are people who have told us very clearly, ‘We want to pay with cash,’” Shake Shack CEO Randy Garutti said Friday in response to an analyst’s question on the company’s first-quarter conference call. “So in this next phase, we’re going to go ahead and have cashiers as well as kiosks.”
Reviews of the kiosk-only location on Yelp and Google show annoyance by some at not having a cash option or a human to take an order. One Yelp reviewer wrote, “You can barely customize your food the way you can when you order with an actual human being.”
Added another, “I understand it’s 2018 but that doesn’t mean at all that everything has to be computerized and automated.”
Some felt the cashless system discriminated against younger and older individuals who aren’t able to qualify for a debit or credit card. Security and privacy issues are also a concern with card-only payments.
When the location opened last October, the system promised to “eliminate friction time,” allowing orders to go straight to an optimized kitchen where staff can focus solely on the food. Customers were promised “fewer lines, less wait time and quicker speed of service at every channel,” including digital orders.
Experimentation with cashless stores is continuing in the industry. Starbucks opened a cashless location in its Seattle hometown in January and is making more expansive efforts internationally. For retailers, such systems promise labor savings, theft reduction and time savings as cashiers avoid fumbling with money. Using kiosks as well as digital ordering can also offer a higher degree of personalization not readily available through cash payments.
Said Mr. Garutti, “We’ll continue to gather learnings around kiosk-based ordering, with the goals of enhancing our guest experience, improving speed of service, and providing an opportunity to offset some degree of the increasing labor costs we have.”
- Shake Shack Announces First Quarter 2018 Financial Results – Shake Shack
- Shake Shack’s (SHAK) CEO Randy Garutti on Q1 2018 Results – Earnings Call Transcript – Seeking Alpha
- Shake Shack Evolves The In-Shack Experience At Astor Place, NYC – Shake Shack
- Shake Shack Is Ditching Its Cashless Store Format After Customer Complaints – Eater
- Shake Shack Is Ditching Its Cashless Store Format After Customer Complaints – Grub Street
- Shake Shack is abandoning its plan to go cashless after customer backlash – Business Insider
- More restaurants go cashless, accept only cards and other forms of payment – USA Today
DISCUSSION QUESTIONS: Was being cash-only or kiosk-only likely the bigger drawback for customers at Shake Shack’s Astor Place location? How do you see the cashless movement impacting retail in the near and long term?