When Chipotle’s first digital-only restaurant opened last week in Highland Falls, New York, it became the first of what will certainly be many. In a lot of ways, the restaurant is the culmination of a huge amount of work to reformat the restaurant with a focus on convenience.
“A lot of thought went into designing this restaurant—a tremendous amount of thought from branding and marketing, the tech and IT team. So, we feel pretty good about this test,” said Chipotle’s Chief Development Officer Tabassum Zalotrawala.
She said given the incredible surge in digital sales the company has already seen this year, they know the digital ordering infrastructure is all there. In fact, the pandemic surge in digital utilization has primed customers for going fully digital exceptionally well. Digital sales grew by more than 200 percent and reached just shy of 50 percent of sales in the last quarter.
This new location has no physical Chipotle tablets or kiosks either, instead relying on consumers to use their smartphone and the Chipotle app. That will also spur the last remaining Chipotle non-digital customers in Highland Falls to get on the app, too.
“All of us walk around with tablets in our pockets. That’s why we didn’t even want to invest in that technology, truly everyone has a smartphone and our app is so amazingly easy to use,” said Zalotrawala. “If you haven’t ordered ahead, you can come in and scan, place the order and it’ll be ready in a matter of minutes.”
Apart from a new steward position to help people navigate the digital process, the new format tackles a lot of core restaurant costs. With no traditional point of sale and only a few seats, there’s labor savings on front-of house staff and cleaning. The new format requires fewer cooking and assembling staff, as well. In all, it means “super efficiency gains” across the operation.
“This is efficient because we have a crew that is managing one line that is managing 100 percent digital orders versus a crew that is managing a front line and a digital line. We expect to see high margins,” said Zalotrawala.
Removing that customer-facing traditional assembly line was a key piece of the nearly two-year process to get the digital format dialed in. Reformatting what Chipotle calls the work triangle was a deep study of how staff flows through the burrito- and bowl-making process. Creating two distinct pick-up areas, one for delivery drivers and catering orders and another for individual guests, complicated the well-engineered process.
“We really had to work on a work triangle where the digital makeline is the central prep line. And the adjacency to the grill and the cookline and adjacency to both pick-up shelves was important,” said Zalotrawala.
In the new format, staff can make either order and get it to the right pick-up area without crossing the line or disrupting the flow. That’s one of the key things she and the operations team will be watching “with a microscope” as the location gets up to speed.
There will certainly be a lot of learnings coming out of the new format, which will help Chipotle grow into tricky markets with a footprint that can slim down to just 1,300 square feet.
“I think it’s opening up a whole new window for us for us. We have about 2,700 stores now, and I do see that our overall potential for restaurants is way above 6,000 restaurants. To get there, these digital kitchens will help us get into areas we may have been precluded from just by lack of relate sate and occupancy costs,” said Zalotrawala. “I see a tremendous amount of potential.”
Watch for more urban locations like this, but also a handful of digital-only formats that include a drive-thru (Chipotlanes) or just a customer-facing pickup window. Right now, the company is focused on high-volume markets.
“In 2021 and 2022, I can tell you we’ll keep testing a handful of variables. These will go in our proven and established markets where we have really strong digital sales already and, frankly, will need the help of digital kitchens as secondary stores to take pressure off high-volume stores,” said Zalotrawala.
