Chipotle outlined big plans for its digital business, which surpassed $1 billion in sales in 2019, according to the company’s Q4 earnings call this week.
The fast-casual chain saw digital sales in Q4 alone jump 78 percent to $282 million, and Company CEO Brian Niccol said on the call that digital orders made up one-fifth of Chipotle’s sales during the same quarter. He also recapped the company’s efforts around delivery, off-premises ordering, and other digital-focused initiatives, including the one everyone seems to be really excited about — the Chipotlane.
These are drive-thru lanes dedicated to customers ordering ahead via the Chipotle mobile app. Like digital drive-thru efforts from other chains, Chipotlanes are meant to speed up service for this particular order channel, which has seen wait times get progressively longer over the last several years. The tactic is clearly working: Niccol said on the call that Chipotle will more than double the number of Chipotlanes in 2020 “because our guests love the convenience and it strengthens our economic model by making our highest margin channel more accessible.”
The other big area of focus Niccol and Chipotle outlined on the call was the new store design, which the company unveiled in December and is trialing in a few different U.S. cities. This new design is Chipotle’s take on the express store format, which many QSRs and fast-casual chains are pursuing these days to cater more to the ongoing demand for delivery and takeout orders. These restaurants have fewer seats, and, in the case of Chipotle, digital pickup shelves where customers can simply grab their order and go. The company is currently monitoring the performance of the new store design’s initial locations.
Niccol hinted at personalization on the call when talking about the company’s loyalty program, which it has grown to 8.5 million members over the last few years. While he didn’t dive into much detail, saying only that “personalization and engagement are cornerstones of our evolving loyalty strategy.” But we’ve already seen what more personalization can look like in the restaurant world, from McDonald’s installing Dynamic Yield’s AI tech in drive-thru lanes last year to Taco Bell’s recent push to make recommendations via its app more personalized to each customer.
Niccol said he expects it “to become a bigger driver in the future as we gain more experience gathering customer insight, while continuing to expand our digital ecosystem.”