Regardless of a consumer’s stance on bowl vs. burrito, Chipotle’s multi-billion dollar empire has captured their digital attention—and their wallets. By the end of the year, Chipotle’s fresh digital engagement strategies could drive digital sales to $2.4 billion.
Chipotle’s digital engagement strategy creates a virtuous cycle of customer engagement, loyalty and sales that’s responsible for more than doubling its revenue. In this post, we’ll uncover Chipotle’s digital engagement strategies, dissect how those strategies improve customer engagement and reflect on how the chain’s digital efforts reinforce real value for its customers and the product at the heart of it all.
The rundown: Chipotle’s digital engagement strategies more than doubled its revenue
Last year, Chipotle’s digital sales sat at a healthy $776.4 million. But as they’ve doubled down on in-app innovation, online order-only drive-thrus and human-centered marketing, they’ve also doubled their revenue—by 202.5 percent, to be exact.
Chipotle started to prioritize digital engagement in the wake of the crisis. New CMO Chris Brandt and CEO Brian Niccol came on board in 2018 to transform the chain’s digital presence. The two worked together under previous tenures at Taco Bell, and to them, digital innovation was the priority—especially as fuel to their comeback. “I think marketing’s role, recovering from any crisis, is helping to manage the narrative,” Brandt said in an interview with Forbes. And they managed the narrative with the help of digital.
The digital wheels started turning during Brandt’s first few weeks on the job. In the Forbes interview, Brandt described a human-centric and digitally driven approach to reinvigorate Chipotle’s brand. He said, “The inside of a Chipotle in the morning looks more like a farmer’s market than any other place I’d ever been,” adding, “I just thought, ‘Man, if we showed this to people, they would love it.’”
It was then that Chipotle used digital as an avenue to tell stories about their fresh ingredients, where they come from and the people that prep them. Those stories were just the tip of the iceberg of its digital transformation.
Three big-win examples of Chipotle’s digital transformation
In recent years, the fast-casual giant has innovated online as well as on the serving line—and it worked. In Q1 2019, digital sales were up 100 percent. Chipotle goes all in on ensuring a seamless digital experience, and it pays off.
The idea behind Chipotle’s digital-first experience is this: “We offer simple, easy-to-use experiences that give customers the ability to order exactly what they want, when they want it, to be delivered to them in the way that they choose,” said Nicole West, Chipotle’s VP of digital strategy, in an interview with Digital Magazine. “It’s all about beautiful, seamless simple experiences.”
Take a look at three examples of Chipotle’s commitment to digital and customer-first experiences:
1. Chipotle was one of the first to offer mobile ordering—but this year’s mobile innovation allows it to soar.
Chipotle introduced an “order on mobile/pick-up in store” model in 2008, about a decade ahead of the competition. Their mobile model remained fairly untouched until 2019 when, according to Wired, “Chipotle evolved its entire approach to managing digital products, shifting from a launch-and-support model to one of ongoing innovation.” As a result, they doubled mobile revenue between 2019 and 2020.
Mobile ordering goes hand-in-hand with Chipotle’s new drive-thru windows reserved for online order pickup, dubbed “Chipotlanes.” Of the 44 new locations they opened in Q3 2020, 26 of them included a Chipotlane.
2. Chipotle didn’t reinvent its digital marketing wheel—it just used technology to expand it.
Chipotle’s differentiator has always been its authentic ingredients. But by the early 2000s, other brands got up to snuff with the fresh food angle. So, Chipotle extended its authenticity past its food and onto its people.
Chipotle’s Behind the Foil campaign tells employee stories in “documentary-style digital and TV spots.” According to Chipotle, Behind the Foil features “unfiltered and emotional testimonials” meant to shine a light on the people behind the ingredients, including both farmers and employees. Behind the Foil is proof that a human-centered approach pays off ... literally.
3. Young consumers care about the environment, and so does Chipotle—so it launched a cutting-edge sustainability tracker.
At the heart of Chipotle’s digital transformation strategy is the adoption of marketing techniques that appeal to younger consumers. Those young consumers want brands to take real social responsibility, especially when it comes to environmental practices.
Chipotle tapped into the younger market and further into their existing mission for environmental responsibility with the debut of Real Foodprint. Real Foodprint is a first-of-its-kind sustainability tracker built within Chipotle’s mobile app. When you place an order in-app, Foodprint will track and report how much water you’ve saved, antibiotics you’ve avoided, organic land you’ve supported and more. Even better: It’s backed by Bill Nye the Science Guy. The announcement of Foodprint starring Nye made a splash on TikTok with more than one million likes.
The reach: Chipotle’s loyalty program heightens digital and customer engagement
During a talk at Advertising Week in 2019, Brandt said that about half of its customers are millennials or Generation Z. “They really want to access the brand via digital,” he said. So digital they went, creating one of the fastest-growing loyalty programs in the restaurant industry today, according to the Forbes article.
In an interview with CNBC, Niccol said a loyalty program was “the most-requested initiative among its consumer base.” Today, the points-based program has 17 million members—and counting.
For the program’s launch, Chipotle partnered with digital wallet company Venmo, an app that’s beloved by millennials and Gen Zers. In the CNBC interview, Niccol said, “We think it’s great for Chipotle to show up in unexpected places, but in really relevant places for people and how they want to communicate with each other.”
The revenue: Chipotle’s digital-first customer engagement strategies yield billions
Chipotle’s digital sales hit record highs this year. According to their digital sales report from Q3 2020, Chipotle’s “revenue increased 14.1 percent to $1.6 billion,” and “comparable restaurant sales increased 8.3 percent.”
Simply put, Chipotle’s digital-physical and customer-centric approach pays off. Asad Khosa, EMEA digital lead at NCR, says companies who place a “purposeful and deliberate focus on transformation to customer and digital-first” will set themselves apart in today’s market. “Businesses who are doing this really well are crushing it in the marketplace,” he said.
What’s more: Online sales have the potential to account for as much as 50 percent of the chain’s revenues by the end of the year. According to The Motley Fool, the impressive increase is due to “the rollout of digital pickup shelves, the digitization of its make line and the expansion of its online delivery capabilities to more than 98 percent of its store base.” These efforts alone accounted for $282 million in digital revenue last year, and Chipotle’s stock is sitting pretty as the 11th best performer on the S&P 500 Index.
Simple food + seamless experience = skyrocketed sales
Backed by more-than-doubled revenue numbers, Chipotle’s CEO Brian Niccol said, “Our digital business is going to stay around as dining room business comes back,” in an interview with Bloomberg. Even as COVID-19 threw a wrench in overall growth, Chipotle’s “digital enhancements to the restaurants” yielded “improved labor efficiency,” successfully offsetting the cost of lost business. That offset further makes the case that increased digital adoption will boost efficiency for businesses across the board.
Although not all businesses can manage Chipotle’s level of digital innovation, brands of all sizes can still take the fast-casual chain’s story as inspiration for their digital transformation. Khosa says to start by identifying customer needs. (Two of his suggestions apply to any business: Offer more delivery options and streamline your order process.) From there, work back into the digital solutions you need to put in place to achieve those customer experiences.
Khosa states that businesses that engage with their customers through a tech-led omnichannel ecosystem will succeed in today’s digital landscape. “The priority needs to be on the digital experience in whatever way that is.” All you have to do is start.
