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With Delivery and Drive-Thru, Chipotle Is Aiming to Make Digital a $1 Billion Business

by Jennifer Marston
October 23, 2019October 23, 2019Filed under:
  • Business of Food
  • Delivery & Commerce
  • Restaurant Tech
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Chipotle’s is “knocking on the door of digital becoming $1 billion business,” CEO Brian Niccol said on a the company’s Q3 2019 earnings call today.

Digital sales for the fast-casual chain grew 88 percent year-over-year during the quarter, to $257 million, representing 18.3% of sales for the quarter, he said.

As expected, Niccol noted that delivery remains a major driver for digital growth for the company. Since 2018, Chipotle has had a partnership with DoorDash that includes integrated delivery — where orders made on the DoorDash platform go directly to Chipotle’s in-house POS system — to speed up service. The company was also one of the early adopters of the increasingly popular hybrid delivery strategy, where restaurants can use a combination of in-house and third-party functionality to built out a delivery operation that best suits their individual businesses.

Delivery may have been front and center for Chipotle this past quarter, but the company’s efforts around the drive-thru are also becoming a major part of its digital strategy. Once known as a chain that rejected the idea of the drive-thru, Chipotle has since begun adding these so-called “Chipotlanes,” which are drive-thru lanes dedicated to mobile orders. On the earnings call today, Chipotle CFO Jack Hartung said that “based on the early success of Chipotlanes, we shifted our real estate strategy to seek more sites that can accommodate a Chipotlane.” Chipotle currently has more than 80 restaurants under construction, he said, and about half of those will have a Chipotlane, bringing the company’s total of them to 60 by the end of 2019.

Drive-thru lanes across the QSR industry have gotten slower over the last decade as menus get more complicated and restaurants struggle to keep up with changing consumer expectations around technology and digital capabilities. Adding more dedicated lanes for mobile orders will help, but the real technology to keep an eye on in the drive-thru will be AI. On that front, Chipotle isn’t completely silent. The company has been “quietly” introducing AI into stores over the last several months in the form of AI-powered voice assistants for phone orders. If Chipotle wants to realize its ambitions of digital becoming a billion-dollar business, it will need to double-down on these efforts and others in the AI realm in the coming months.


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Tagged:
  • Chipotle
  • delivery
  • DoorDash
  • drive-thru

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