Retail Tech: How In-N-Out Could Expand Nationally
Started in 1948 by Harry and Esther Snyder, In-N-Out Burger is nothing less than a cult-sensation. The burger joint enjoys a loyal customer-base that is the envy of the fast-food industry, delivering the most consistent customer experience of any large burger chain in the US. And with per store revenue that exceeds the likes of Burger King, Wendy’s, and Jack In the Box, In-N-Out is hard not to admire.
While their business has been undeniably successful at the store-level, maintaining quality and delivering a consistent experience has come at the expense of one important business metric: growth.
In this post, we’ll first look at why consistency matters and how In-N-Out maintains consistency. We’ll then explore some of the difficulties a disciplined chain like In-N-Out faces when expanding. Finally, we’ll share how ZINIER’s platform (full disclosure: I am the co-founder) could enable In-N-Out or any other retail chain to not only maintain consistency, but do so while expanding rapidly.
Why consistency matters
Retail expansion hinges on a brand’s ability to consistently replicate its secret sauce — its products, finely-tuned marketing messages and in-store experiences that, when combined, represent its recipe for success. If the brand can deliver, it usually gains happy, loyal customers, while brands that fail to deliver consistency, usually fail as they grow.
In-N-Out has undoubtedly hit upon a recipe for success and goes to great length to ensure this recipe is replicated precisely at each location.
Insuring quality at In-N-Out
Simply put, In-N-Out will not open a new location unless it can ensure flawless and consistent execution. It’s why all locations are company owned and not franchised. The food at each location is made-to-order to exacting standard. They always have chilled ketchup and lemon slices at the condiments area and the store layouts are nearly identical.
Additionally, because they make everything fresh (they don’t own freezing units), they don’t open new locations beyond the 500 mile radius of a patty-making facility and distribution center. They are the very definition of micro-managers.
Employee happiness and retention
To maintain such high-standards, In-N-Out attracts and retains talent by paying more than the competition. In-N-Out associates make at least $2–3 above minimum wage, while in 2012, store managers made more than $120,000 on average, compared to a median food service manager salary of $48,000 per year. In-N-Out also offers substantial benefits for employees, including retirement savings plans, paid vacations and luxurious vacations for their best-performing managers. Additionally, In-N-Out will not expand unless they feel they can hire strong management in the area.
Quality at the expense of growth
In-N-Out’s growth strategy has long been one of patience and discipline. It takes time to hire and train managers and to such hire standards. It takes time to ensure such consistency. And it’s taken time for In-N-Out to get to where they are today.
According to a QSR Report, of the top 50 brands in the quick service and fast casual category, In-N-Out has the 10th highest revenue per store at with $1,975,000 per store. But with only 301 locations relegated to the West Coast, In-N-Out has opened just 4.5 new locations a year since it started in 1948.
Compare this snail like expansion rate to the meteoric rise of newcomers like Five Guys Burgers. Five Guys boasts nearly 1200 locations in the US alone, averaging over 40 new locations per year since it started in 1986. Interestingly, per-store revenue of Five Guys is only about half that of In-N-Out ($1,081,000 per store), begging the question: Does quality always come at the expense of speed?
A better way: tech that ensures consistency
What if you could maintain the same disciplined and high-quality standards as In-N-Out but scale like Five Guys? What if there wasn’t a trade-off between consistency and growth?
At ZINIER, we’ve built a platform that we believe can help any restaurant or retail chain ensure consistency and quality at scale. Using mobile and cloud technology, clients first import their locations and staff to our web app. Headquarters can then create and send checklists, guidelines, surveys and audits to their on-the-ground staff who view and send back results from the ZINIER mobile app.
Because store staff and managers don’t always have access to a desktop, a mobile-first approach to bridging the communication divide is critical. And with Geo-fencing technology and the ability to request images and videos from store staff to validate marketing initiatives, visual merchandizing and pricing, the ZINIER platform is both powerful and versatile.
Below are a few of the more specific ways In-N-Out could use the ZINIER platform to overcome some of the expansion challenges they face.
How do you ensure that each location manager is following strict quality and food safety guidelines? One ways is to only hire the best and train them extensively. It’s what In-N-Out strives for. But this strategy takes time.
Using ZINIER’s platform, In-N-Out could create daily, weekly and monthly checklists sent to managers or employees via the ZINIER mobile app.
For example, at the end of the day, managers usually perform a series of checks— the deep fryer must be cleaned, the floors washed, the register closed etc. A ZINIER checklist would not only remind the manager of what needs to be done, but also provide a means of notifying Headquarters when and if tasks have been completed. Results are immediately sent to the web app dashboard, allowing In-N-Out to gain a real-time view of how locations compares to one another.
With the ability to request mobile photo uploads and GPS tagging, Headquarters can feel confident that the tasks are being completed, essentially automating the micro-management of essential operational tasks.
For more extensive site audits — something all fast-food chains do in some capacity — In-N-Out could again use ZINIER’s platform. Instead of hiring an outside audit agency or relying on pen-and-paper audits from upper-management, In-N-Out could deploy the audits themselves via the mobile app to collect location-based results quickly. In addition to being faster and more cost-effective than traditional solutions, ZINIER frees up managers so they can spend time on other tasks.
Employee sentiment and feedback
Employee satisfaction is critical to In-N-Out's strategy. Happy employees make better employees which, in turn, improve the customer experience.
Using ZINIER, In-N-Out could easily deploy surveys to and collect feedback from staff to improve the workplace. It's a simple use-case, but one that In-N-Out already does using other survey methods.
At ZINIER, we’ve built a platform that helps retailers efficiently track and manage store operations, communicate effectively with store staff and improve the customer experience. What other tech are companies out there using to ensure consistency at scale? If you know of other solutions that solves the same problem, we would love to hear from you and invite any and all comments.