And they’re also a direct answer to Chipotle’s changing guest. Digital sales represented 41.6 percent of the business last quarter, which amounts to $811 million, of which 20 percent owes to delivery. Chipotle’s full-year 2021 digital sales of $3.4 billion was nearly three-and-half times what it was pre-COVID.
Lastly, the brand has found success opening in “small” markets of about 40,000 or so people. These lend themselves to Chipotlanes, too, and the ability to deliver unit economics at or better than traditional stores, Niccol said. Given lower lease costs, as well as a higher success rate in staffing, the fact there’s no trade-off in volume has opened up the map for Chipotle. Niccol said North America offers “hundreds of these” Chipotle can find and build in, including even smaller areas near or off expressways. Essentially, restaurants not in major metros.
Zalotrawala says Chipotle is taking a “really keen look” at its real estate portfolio as all these dynamics unfold. One, it’s identifying existing locations that can support a Chipotlane and create that access point. Secondly, it’s working to find existing stores that could use a relocation where the brand can tack a Chipotlane on. And thirdly, there’s an overarching new restaurant strategy around ways the company can add a Chipotlane. The fast casual will do about 12 conversions this year.
But to Zalotrawala’s latter outline, the Chipotlane’s success has begun to cascade into other development blueprints. In June, the brand opened a walk-up window at its Gainesville, Florida, University Avenue location. Chipotle tested a walk-up window late 2019 in Chicago.
Zalotrawala says Chipotle viewed the opportunity not unlike how it’s tracking Chipotlanes. “I think the whole idea is conceived from creating more access and convenience for customers,” she says.
Here, the chain began to run into more urban areas where “you absolutely cannot have a vehicular lane,” Zalotrawala says. Or jurisdictions where local authorities won’t green light a drive-thru.
And so, Chipotle devised a Chipotlane for foot traffic. As Zalotrawala calls it, “the human lane.”
Akin to Chipotlanes, customers order ahead. They walk up and show a receipt. There’s even a bell in case an employee is not present at the window. Zalotrawala explains that’s seldom the case.
The Chicago store proved effective, she adds, since guests appreciate the convenience and the in-store queue became less congested.
With the Gainesville store, Chipotle soft-opened its window add-on. There’s a sign inside consumers can see and employees will suggest the option. But, generally, it’s a pretty intuitive feature that doesn’t take a lot to sell, she says. One guest uses it and tells another. Somebody walking in and grabbing off a shelf notices the window and asks about it.
Chipotle does, however, plan to boost awareness by firing off a blast to customers within a 3-mile radius of the restaurant. Those who have the app will receive a notification that it’s live. There will be other “freebies” or marketing-related actions to “create the buzz and have people take note that something new has happened to their existing Chipotle,” Zalotrawala says.
Walk-up windows are, for all intents and purposes, subsets of Chipotlanes. The brand was able to add the Gainesville one without closing the store as well, which Zalotrawala says is a critical driver when looking at this model on a go-forward basis.
The inside feels just like a Chipotlane would. There’s the digital makeline in addition to the front, situated near the walk-up window/Chipotlane area. So crew members can prepare digital orders and hand them out. There’s no cash collected. No point-of-sale. Beverages are set up.
“We’ll really be looking at what happens with the sales, what happens with the transactions, and, honestly, what happens with customer satisfaction,” Zalotrawala says.
Like traditional Chipotlanes (there is a Chipotlane-only unit that opened in Cuyahoga Falls, Ohio), the walk-up window isn’t a swap. There’s still a dining room. Customers can get in line as usual. If they want, they can also go inside and grab from pickup shelves. One reason Chipotle kept those, Zalotrawala says, is for larger orders and catering pickup. “It’s a better place to fit those boxes in,” she says.