Interview: Peter Dickson, Global CEO, ShakeAway
In the first in a series of interviews with the great and the good of global retail, ThisIsRetail talks to Peter Dickson, CEO of ShakeAway, the world’s largest milkshake bar company. Since opening their first bar in Bournemouth in 1999, ShakeAway has expanded across the UK, and more recently, the Middle East, India, and the Americas. We discuss internationalisation, their future plans, and what lies behind their success…
What was your first job in retail?
My first job in retail was in a family store so that’s where I got the retail bug.
Which retailer do you most admire, and why?
The list is many although perhaps my favourite is Restoration Hardware in the USA who sell a wide range of product with not that many SKUs as they are brilliant at product marketing. They sell a corkscrew at twice the price of anyone else but they describe it as similar to the cork screw that may have been used by Napoleon etc. etc. and therefore by reference they add value to mundane product.
They do this throughout the store even with products such as a sofa and a bed, they only have a very few ranges but the shape is a classic basic shape but you can change it by ordering different arms or head rests mattresses and the like so the product becomes bespoke and on that basis they can and do drive a higher purchase price. Making product special is the key.
What excites you most about retailing at the moment?
As we all know, globalisation is real and therefore more retailers are arriving on our shores all the time in every sector and of course the opportunity works both ways so we all have to think about how we globalise our businesses. That’s exciting.
What differentiates the ShakeAway brand from your competitors?
Shakeaway, whilst still small, created a marketplace by re-inventing an age old product, the milkshake. We are now the largest milkshake bar company in the world with 50 stores trading in 7 countries/states including the USA. This will soon rise to 15 countries as we head in to 2015.
We are a franchise company that has developed the concept to work in almost any marketplace as we make sure that our menus and marketing are country right. In short, we do not sell a franchise in a box, we sell a concept that can be adapted to local tastes. We have also re-invented fries, yoghurt and smoothies. It has helped us to develop the business by ensuring that we never do anything if it is not honest, fair and reasonable at all times. Not easy but it works.
Making a milkshake seems easy to do but in fact it is very difficult for competitors to copy - not just in the art of knowing how to blend 180 different flavours/ingredients (much harder than you would think!), but how to engage the customer in such a way that every visit is entertaining. It’s not enough anymore to just be in stock with efficient, pleasant staff.
We have developed an almost cult-like customer base as the product is bespoke and you can quite literally live forever and never have the shake twice. We operate the brand through social media and every store has its own Facebook account in order to connect the staff to the customer and we ensure that the product/menus and marketing constantly changes on a weekly basis backed up by our own Shakeaway DJ radio and TV stations which can be changed to be relevant to one store at a time, at low cost, and in any language.
You've recently opened ShakeAway in the United States - how do you select new markets?
We started our international expansion two years ago and have learned to look at a number of factors to review such as economic, evidence of international brands, weather, ingredients availability and costs, language, retail market size etc. Obviously the more stable and developed the country is then the easier it is for us to seek the right Master Franchisee.
What are the major challenges international brands face when entering a market such as the US?
Depending on the product area the US market is sophisticated with huge competition so unless you have a truly unique offer the sheer size and capital investment can be daunting. The USA may seem as though it is a good fit culturally with UK brands, but don’t be fooled as it really is quite different in almost every way so engaging USA partners/staff who can relate what those differences will be (almost by state) is paramount, as is understanding the many, many rules created within the legal system which is quite different to the UK. In short, unless you are willing to adapt your offer to the market it is not an easy country to make money in.
Do cultural differences influence the way you operate ShakeAway in international locations?
We do not sell, as I have said, a concept in a box. We do not want the customer to think it is a brand from another country so we work hard to ensure that the brand is presented to suit the local market and in some countries this means that whilst the basic concept is the same, we change the menu, the language, the marketing, the radio and TV, and even some of the store design. By doing this we develop the concept to be market right and that’s reflected in profitable sales.
What are your current expansion strategies? Where will ShakeAway’s growth be directed in the short to medium term?
We expect to grow our home market with more company-owned and franchise stores already identified in the UK during 2015, whilst at the same time developing the territories we have already signed-up to develop more stores in San Diego, Oman, Texas, Pakistan, Mexico, Malaysia, UAE, Qatar, Miami, Arizona, Orlando, NYC, Saudi Arabia, Bahrain, Lebanon, Georgia and Panama.
We further expect to develop in more countries as we currently receive hundreds of requests for franchises from more than 50 countries around the world. Our biggest market opportunity is the USA where Milkshakes were invented - it would not be unreasonable to see circa 500 stores across the territory over time.
Lastly, we also have an opportunity to space-share with other brands. We developed a space share in the UK with subway which has been very successful and we have already received strong interest from in particular USA brands such as burger houses to share space.
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