Jack In The Box Gained New Customers During The Pandemic. Here’s How.

Food & Drink

Ryan Ostrom was named CMO of Jack in the Box

in late January 2021 when the dust was still settling from one of the most tumultuous years in the industry’s history. It also happened to be about two months after the 2,100-unit chain settled a lingering lawsuit with franchisees over its marketing fund and remodeling requirements.

Undeterred by either challenge, Ostrom stepped on the gas.

While chains paused their marketing and trimmed their menus to keep up with a sharp shift to off-premise operations and a massive labor shortage, Jack in the Box added even more options. Extensive variety–from burgers to tacos to egg rolls–is what the chain is known for after all, and a global pandemic wasn’t about to change that. In fact, the chain currently has 600 to 800 additional items in various stages of its testing process.

Products must pass several tests, however, including supply chain viability and consumer satisfaction. They also have to fit within Jack’s new CRAVED strategy introduced by Ostrom–cultural, relevant, authentic, visible, easy and distinctive.

“Everything we do is make the brand more ‘craved’ through our various touchpoints. That has kept us focused,” he said.

Notably, that intentional decision to expand its innovation pipeline has worked out well for the chain throughout unprecedented times. Jack in the Box’s same-store sales have increased by double digits on a two-year basis and are doing so in part due to increased traffic, whereas most of its competitors are simply raising prices or promoting higher-end products.

“This is a competitive field and when everyone zigs, sometimes you got to zag. While everyone was taking things off their menus, we were introducing new items and a lot of these opportunities allowed us to create wider solutions for families who were no longer getting what they all wanted at other places,” he said. “By not scaling back our menu, we resonated with our core customers and new guests who have since kept coming back. I think we became more culturally relevant during COVID just by giving people a variety, and that has brought us some new traffic. It’s something we’re very proud of.” 

Jack in the Box’s intensified focus on digital consumers has also resonated, as it has across the entire industry in the past year and a half. From March 2020 to March 2021, for example, restaurant digital orders grew by 124% according to the NPD Group.

Jack in the Box leveraged this trend by launching a new loyalty program in August called Jack Pack Rewards. The program is currently available through the brand’s app and the next phase is rolling it out to restaurants, ideally by the end of this year.

“We’re happy with where we are with loyalty and our downloads have significantly increased,” Ostrom said. “That should accelerate with our big push to roll it out in stores. Our goal is to create a one-to-one relationship with our guests and really change the way we engage with them.”

Jack in the Box has also introduced a new drive-thru-only restaurant prototype to support its off-premise business and is working with ghost kitchen company Reef Technologies to explore a delivery-only model. The first Reef location is set to go live “in the next week or two” in Houston with a few more on the horizon. Other brands, including Wendy’s and TGI Fridays, are also leveraging Reef’s kitchens to expand into new markets in a more cost-effective way and Ostrom expects to do the same with Jack in the Box.

“Right now, we’re in test phase and currently looking at what this opportunity could be. We do know there is a lot of demand for Jack across the U.S. The number one question we get on social is ‘how can I get Jack in my market?’ Reef will allow us to test new markets and opportunities with a lower investment and get our feet wet before opening a brick and mortar location,” Ostrom said.

These initiatives should further accelerate the chain’s digital business, which has nearly doubled in the last eight or nine months. Ostrom’s goal is for its digital sales to surpass 10% by early 2022 and, ultimately, “much higher than that.”

“There is a lot of runway for us to catch up and pass other brands in digital,” Ostrom said.

That’s not to say the company is abandoning its traditional restaurant model, however. Jack in the Box this week announced seven development agreements for Q4 to open 47 new units. In total, the chain has awarded 23 development agreements in fiscal year 2021 to build 111 stores throughout the next several years.

“The interest in growing our brand shows this is a new Jack and there is a new energy. There is a lot of positive vibes going through the system right now,” Ostrom said. “For the first time in a long time, we’re firing on all cylinders in one direction with the goal of making Jack the best brand in the U.S.”

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