Jersey Mike’s Caters to a Changing Customer

    The way people gather is changing. And restaurants are ready to respond.

    Web Exclusives | September 9, 2020 | Danny Klein
    Jersey Mike's catering boxes of sandwiches.
    Jersey Mike's
    New catering packages from Jersey Mike's reflect updated branding as well.

    For some, the age of social distancing has advanced to the “age of comfortable gatherings.” Quarantine fatigue weighs heavy. Comfort with safety measures, personal and commercial, have become a way of life. And thus, more people are finding paths to reconnect, only with circles they trust, as opposed to large-scale events full of strangers.

    While this, naturally, is far from a universal change, it has opened opportunity for restaurants where it fits. Namely, in how shifting behavior continues to redefine catering on a more personal level.

    Jersey Mike’s recently launched a new platform designed to deliver a contactless experience.

    One option, called “Subs By The Box,” features individually wrapped and labeled products with fresh branding, soon to reach stores nationwide. Previously, Jersey Mike’s subs were open and visible. Nice from quality and cravings perspective, but not so much in today’s hyper-sensitive environment. Also, the option serves 12 people from four sub varieties.

    Another add, Individual Lunch Boxes, are ideal for grab and go and arrive with a choice of two sub sizes (regular or mini), bags of chips, and a fresh-baked cookie. Customers can tack on 20-ounce bottled drinks as well.

    READ MORE: A one-on-one with Jersey Mike's CEO Peter Cancro

    It’s clear these choices cater to family and friends as much as they do an office party. CMO Rich Hope says customers continued to demand two catering updates of Jersey Mike’s amid pandemic conditions: Options for small gatherings and individually wrapped meals.

    Beyond just ordering for personal use, customers wanted options to gift first responders and essential workers, teachers going back to school, returning office staff, and so on.

    “It’s easy,” Hope says. “They’re sharable this way. Before, it was more intended for family eating, but now it really extends out with the new level of food safety and service.”

    Hope believes demand will hold, especially as football season arrives, and, simply, more lockdown time passes. “People have been really creative on how they gather,” he says. “We’re humans and we love human interaction. And I think that’s always going to be there. Not that the fear has gone away in people, but I think the acceptance and the protocol and the idea that if you’re gathering outdoors and you need to go use the bathroom, you put a mask on. All those things. I think people, for the most part, have begun to accept.”

    The catering updates join what’s been an eventful stretch for Jersey Mike’s. If you look at the largest sandwich chains in America, Jersey Mike’s, far and away, produced the most alluring growth story in 2019.

    The chain expanded net 173 locations from 2018 to 2019 to 1,667 stores (1,595 franchised) on systemwide sales of $1.34 billion. Only Panera Bread—and it’s as much a café concept as a sandwich one, eclipsed the triple-digits. Firehouse expanded by 24 stores to 1,153. Inspire Brands-run Jimmy John’s declined 13 restaurants to 2,787, and Subway continues to trim its base, scaling back 996 units to 23,802 locations.

    Jersey Mike’s also bumped average-unit volumes from $769,000 to $824,000.

    Here’s a look at the recent growth journey:

    • 2019: 173
    • 2018: 151
    • 2017: 156
    • 2016: 139
    • 2015: 189
    • 2014: 144

     

    (CHECK OUT 10 YEARS OF INDUSTRY SALES DATA)

    Just 2019’s figure, for perspective, ranked fourth among the country’s top-50 grossing quick-service chains. Behind only Domino’s (253), Starbucks (216), and Taco Bell (181), and ahead of Panera (132), Popeyes (131), Chipotle (130), and Chick-fil-A (130).

    Put plainly, Jersey Mike’s defied a lot of industry trends in recent years. COVID-19 has been much of the same.

    By mid-June, the company’s year-over-year sales growth ran flat. Earlier in 2020, Jersey Mike’s pledged to pay for franchisees’ upcoming retrofits at $75,000 per store. The headline-grabbing call equated to a roughly $150 million investment and was the first store-level update since 2009–2011, a time when the expense measured to just $15 million.

    Jersey Mike’s has about 475 owners throughout the country, meaning most have just a handful of units.

    Hope says technology changes have really fueled much of Jersey Mike’s COVID journey. In August 2019, the chain launched a more streamlined app. Some key changes: Improved navigation and the ability to schedule an order for pickup.

    Fortunately, Jersey Mike’s worked out a lot of the bugs out before coronavirus. It also had just introduced white-label delivery so customers could order through the app. That latter feature was set to launch April 1, but Jersey Mike’s moved it up to March 16 as stay-at-home mandates raged coast-to-coast.

    The brand is experimenting with curbside delivery, too. Hope says Jersey Mike’s expects to roll it later in the fall. “That’s another way to serve our customers,” he says. “We’re just essentially trying to serve our customer in any way they want to be served.”

    To illustrate how disruptive the landscape has truly been, in the week before COVID hit, Jersey Mike’s pushed about 82 percent of its business from walk-in orders. The rest was online ordering and third-party delivery.

    Within a week, it shifted to 60 percent electronic ordering and 40 percent walk-in. Today, instead of 18 percent digital, it’s hovering around 30 percent. “It’s almost doubled,” Hope says. “And it probably will [stay that way]. I think once you create habits, people often stick with those habits.”

    It it will probably slide back—as it has already—but never to the scale it was, he adds.

    Hope doesn’t consider this a bad thing, however. The landscape has adjusted. People were exposed to online ordering as other options dropped out, especially among older demographics. “People weren’t even answering phones sometimes during the height of the crisis,” Hope says. “They figured out how to download apps and use them and when they started using them they realized this is not so hard. I can do this.”

    And in truth, it’s a difficult experience to shake, in a good way. “It’s so much easier,” he adds. “It really is. Why would I want to go and stand in line?”

    Jersey Mike’s has become more sophisticated along the way, too. As the app spread and usage lifted, the brand boosted sign-ups for notifications. Previously, Jersey Mike’s boasted text message and email programs. However, in just a couple of weeks during COVID, some 1.2 million people signed up for the app.

    Right away, Jersey Mike’s gained a channel to communicate with customers and measure the response. “You send out notifications and there is a reaction,” Hope says.

    Early on, he admits, Jersey Mike’s was a bit wary of sending out notifications and seeing how customers received it. So it staggered the alerts, say five times throughout a day, and observed how online orders responded.

    “And you could see it spike every time we sent a notification,” Hope says. “Orders would spike. And then they’d go back down. You’d just see that over the day. Notifications are just impactful.”

    The vast majority of people today carry a mobile device in their pocket. But do they check email regularly? With younger consumers in particular, notifications prove a more relevant and visible form of communication. “I turn mine off for the weekend,” Hope says of email. “But notifications, you’ve got to do something with it. You’ve at least go to dismiss them.”

    It helps Jersey Mike’s achieve what all brands are trying to in this arena—stay top-of-mind in a complicated conversation.

    Throughout all of this, the brand has continued to give back as well. It’s donated millions of subs to healthcare workers, seniors, children, and others throughout the pandemic. Also, this spring, it gave more than $2 million to Feeding America and $1 million to MLB star Aaron Judge’s ALL RISE Foundation.