Shake Shack and The Rise of the Mass Premium Brand
September 27, 2013
There’s nothing worse for brand right now then being caught in the middle between the premium and the value segment, if you are in the middle you are neither offering a unique perspective, or a great deal.
The middle used to be the place where you could buy awareness, buy lots of real estate and automatically gain share just due to your critical mass. There’s no denying there are still a lot of powerful brands in the middle, but they have to work extra hard to remain relevant.
In the re-shuffle that’s taking place, a new brand hierarchy is emerging with the arrival of the brands that don’t conveniently fit into a conventional space. They have a strong point of view, offer premium prices, but are accessible to a broad group of the population. They might not be in 30,000 stores, or have 3,000 stores of their own, but they aren’t one-man bands, or mom and pops.
On prototypical example of this phenomenon is the Shake Shack, who in a time when the mass fast food empires find themselves challenged across the board, this slightly more upscale 9 year-old burger micro-chain is growing smartly.
In their corporate HQ hangs a sign that reads “The bigger we get, the smaller we have to act”
Shake Shack is a brand knows that its customers are looking for something different; the burgers are 100% all natural Angus beef, the food is free of trans fat, they serve wine and beer, the stores have unique architecture that reflect their neighborhoods and they use green and sustainable materials where possible.
There’s a lot of focus on the details that surround the experience and partnerships, like the one with Mast Brothers for chocolate that help to reinforce the brand’s difference. It’s how Shake Shack gets all these elements work together to create an experience that’s more human and connected than a chain.
As a result, the typical NY Shake Shack makes twice the annual revenue as the average McDonald’s.
Danny Meyer, the founder of Shake Shack, has seen the damage greedy investors can do to a brand and is taking a measured approach to expansion in order to protect and preserve the brand’s integrity. There are simply too many brands that have been touted as the next “Starbucks”, who’ve expanded with the single strategy of ubiquity and fallen flat on their faces. By the end of 2013, Shake Shack will operate a total of 33 stores worldwide.
This new Mass Premium space seems is set to grow because it attracts a nice mix of consumers; those who want to trade up from mass because the brand offers something special that the mass brands don’t and those who could trade up, but find the mass premium meets their needs.
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