Chipotle “just blew by a billion in digital sales,” noted Food On Demand News Editor Nick Upton. And so began his conversation with Nicole West, Chipotle’s VP of digital strategy and product management, who’s been with the brand for 14 years and helped form its ecommerce business unit in 2015. West was among the speakers August 11 during the third-annual Food On Demand Conference, presented for the first time this year in an all-virtual format.
Upton was referring to the 90 percent increase in digital sales from fiscal 2018 to 2019 that pushed sales from mobile app and online orders past $1 billion, a feat he called “incredible.”
Chipotle’s digital sales in 2020 could well exceed that figure as the COVID-19 pandemic continues to push restaurant consumers to contactless channels. Ongoing investments in technology, said West, enabled the brand to “scale overnight” to accommodate an influx of off-premises orders.
“The digital kitchen, it’s our superpower. It’s at the core of this entire digital busines,” said West. “It’s customer-facing apps and applications on web. It’s also restaurant-facing, with the actual digital make line, where our dedicated teams are taking care to execute each of these digital orders.”
“Going into COVID,” she continued, “we saw 80 percent year-over-year digital growth in Q1. Q2 was up over 216 percent growth.”
West, who began her career at Chipotle in field marketing when the company had about 400 locations, agreed with Upton that while the pandemic accelerated a digital shift across the restaurant industry, Chipotle was already moving in that direction. Back in 2017, she noted, was when “we really turned it up” by partnering with Deloitte to develop a mobile app.
“What we decided at that time was that a digital transformation for Chipotle was the right direction to go,” West said. “We really needed to kind of double down on digital efforts, on customer experience, on user experience and embracing technology to improve convenience, access, ease of use, not only for our paying customers but for our crew members in our restaurants.”
Chipotle made investments to support and enable its employees as they execute an increasing number of digital orders and also still handle orders from customers in the restaurants, noted West. “We did a number of POCs, ‘proof of concept,’ and some significant R&D before landing on the custom solution that is our digital kitchen,” she said. “At the heart of it, it’s a kitchen display system. It’s a fancy, custom KDS. We have phenomenal user experience and user interface designers who have made sure the screens our crew members are interacting with are just as engaging and just as beautifully designed as those our customers are interacting with.”
As Chipotle began seeing measurable results, including improved order accuracy, from its early tests, it went all in on retrofitting existing locations and building new restaurants with a digital make line and digital kitchen.
Life in the ‘Chipotlane’
Don’t call it a drive-thru.
“We like to do things differently at Chipotle, and our approach to drive-thru was no different,” said West. “As we started looking at a traditional drive-thru it just didn’t feel like the right thing for our brand at the time.”
What did feel right was the creation of “Chipotlanes,” where customers drive through to pick up their digital order, but, unlike a standard drive-thru, “this isn’t a place where customers will be placing orders,” said West. The 100th Chipotlane opened recently in Ohio, and the company plans to outfit 60 percent of the system with the new pickup option.
“So what we’ve seen so far in these first 100 locations is sales are higher. It’s a very strong performance out of the Chipotlane locations,” said West. “Digital mix is substantially higher. I think overall we’re seeing 30 percent higher than non-Chipotlane locations, in those that have recently opened.”
Chipotle is also testing another new restaurant design, this one featuring a walk-up window for customers to pick up their digital orders. Its restaurants also have mobile order pickup shelves.
“It’s making that sort of last 20 feet as seamless and easy for our customer as possible,” said West.
As Chipotle looks to continue innovating across the business, West called out the brand’s rewards program as an area with plenty of potential thanks to its 15 million-plus members. Rewards members visit Chipotle more frequently than non-members, and improved CRM capabilities will allow the company to better tailor messaging and offers. Menu innovation, too, could benefit.
There’s opportunity, said West, “to do digital-only offers, menu items. Or maybe digital-first or loyalty member exclusive items that maybe give people a sneak peek of what’s to come.”
What’s to come for Chipotle is almost certainly more digital sales growth, as West pointed out the company has plenty of momentum “to continue to engage all the new customers that we’ve attracted over the past four months.”
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