Club Wingstop officially launched in late May, and executives have high expectations that the loyalty program — the chain’s first ever — will be a catalyst for its long-term growth.
Though it’s early days, they shared during the company’s earnings call Wednesday morning that enrollments have exceeded expectations by 22% so far and that loyalty sales now represent nearly half of its first-party digital sales, “significantly outperforming pilot market results,” according to CEO Michael Skipworth.
That momentum will very likely continue through the end of July as the company leverages the new program for its Wing Week promotion this week, a five-day campaign offering exclusive rewards like concert tickets and $500 Wingstop gift cards. The company also plans to leverage the program to more effectively communicate its value offerings and, ideally, convert higher awareness into consideration as it works to re-gain traffic and turn around five straight quarters of negative same-store sales.
“Competing more effectively for today's consumer requires us to win more occasions and strengthen the emotional connection with our guests over time,” Skipworth said. “Perhaps the most significant milestone in advancing that strategy this quarter, and one we've been working towards for several years, was the national launch of Club Wingstop.”
Wingstop’s objective with the program is to build more personalized messaging for its loyal customers and “engage with them in more meaningful ways,” such as offering exclusive access to menu items or VIP experiences.
The ultimate goal, Skipworth said, is to build frequency over time by delivering the right message and offer to the right guest at the right time. Judging by that earnings call, it’s clear that executives are bullish about such an opportunity, and they’re betting a small farm that the program will help solve some of the company’s current challenges.
As CFO Alex Kaleida explained, the company is now able to “hyper personalize” value messages to core customers who are feeling more pressure, or who may be seeking new flavors, or who simply want to accumulate more points.
There is no doubt an opportunity for any brand to jump into loyalty for the first time. That said, there is also no doubt that loyalty has evolved to where more brands are offering similarly personalized messaging and/or exclusivity and experiences. Indeed, we’ve seen a host of loyalty introductions and iterations in the past year or so that include such features, from Cava to Pizza Hut to Chipotle. More brands, like Taco Bell, El Pollo Loco, and Wendy’s, have also added drops to incentivize members, offering opportunities such as exclusive product releases or special access to events.
To put a finer point on it, the loyalty environment in the restaurant space has evolved, and quickly, and though there is upside for Wingstop to be a part of that space, it won’t likely be a silver bullet. The environment is noisy, and we’re starting to see data showing that consumers may be getting loyalty program fatigue from such a saturated landscape.
That said, early signs show that most of Wingstop’s enrollments so far have come from its core consumers and they’re showing high return rates. So, while Club Wingstop won’t likely be a silver bullet, it can at least help the brand be a bigger part of consumers’ consideration set and, in this environment, a win’s a win.
Contact Alicia Kelso at Alicia.Kelso@informa.com
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