Chipotle
- In 2021 alone, Chipotle has reached $2 billion in digital sales.
- Chipotle's VP of Digital Marketing credits the chain's mobile app and loyalty program for the success.
- Digital sales account for 48.5% of Chipotle's total sales, up from 19.6% in 2019.
- See more stories on Insider's business page.
Chipotle has logged a record $2 billion in digital sales so far this year, driven by a wildly popular fan loyalty program that has more than doubled to 24 million members since the start of the pandemic.
The fast-casual chain, which has nearly 2,900 restaurants, is looking to build on that success. Last week, Chipotle launched new ways for its rewards members to unlock extra points so they get "free Chipotle faster," Tressie Lieberman, Chipotle's vice president of digital marketing and off-premise, told Insider in a phone interview last week.
The move comes as chains like McDonald's, Popeyes, Taco Bell, and Burger King have taken steps to beef up their rewards programs in order to establish better relationships with customers who have fled to delivery services like Grubhub and DoorDash to order food.
Earlier this summer, McDonald's debuted My McDonald's Rewards after testing the revamped free-food-for-points program over several months. Last week, Burger King rolled out its new Royal Perks loyalty program after national testing.
Chipotle's expanded app features more gamification aspects, wherein customers are given personal challenges to earn more points. For example, customers can get bonus points for adding guacamole to an order. Chipotle is also awarding badges to customers to point out what makes them special. For example, you can earn a badge for exploring the menu or for ordering Chipotle three ways: in the restaurant, mobile order pickup, and delivery.
"It's just a way to show that you're a super-fan of the brand," Lieberman told Insider.
Getting customers to become members of the Chipotle app is also important for the chain's profitability.
While third-party delivery apps provided a lifeline to restaurants during the pandemic, most of them charge hefty delivery fees - as high as 30% per order. Some delivery apps also don't share consumer data with restaurants.
Carlo Allegri/Reuters
For Chipotle, the app has been a key weapon to reclaim their digital business, and therefore, boost profits.
The loyalty program, which debuted in 2019, offers dozens of ways for customers to earn free food - from free guacamole and chips to free entrees. It also allows customers to donate to a special charity when ordering food through the app.
Chipotle also uses its app to offer digital-only food specials. For example, the chain's Lifestyle Bowls, which cater to diets such as keto and Whole30, are only offered through the brand's app or website. More recently, Chipotle has been selling its new quesadilla entree only on the app or online.
None of these online-only food specials are available on third-party delivery apps like DoorDash.
"It's a way we can create a relationship that keeps the digital sales flowing," Lieberman said. "When we can get people into the digital channels, not only do they spend more, but they come more often."
Prior to the pandemic, digital sales accounted for 19.6% of Chipotle's total sales. Now, that number has ballooned to 48.5%, according to the chain's latest quarterly report.
source https://www.businessinsider.com/chipotles-reaches-two-billion-digital-sales-record-2021-9