He added sign-ups have come across all frequency bands and Chipotle is just starting to use customer data to more effectively target and engage the incidence of lower frequency and lapsed users. Niccol said early results show members up their frequency after joining. It’s giving Chipotle currency it can use to incentivize behaviors moving forward, and it’s also a key enabler of the company’s entire digital ecosystem.
“We’re not done adding members to the rewards program,” Niccol said simply.
Chipotle, like many other chains, has broken the base into cohorts and is experimenting with those groups to understand behavior. For instance, if it incentivizes them with points on certain days of the week and specific add-ons, what type of behavior changes does Chipotle see? “The good news is we’ve done a couple,” Niccol said. “We’ve not done a whole lot. And the thing to keep in mind is, last quarter, where were we? I think 2 million, 3 million people. This quarter now, we're closing in on 5 million. So we're still refining the cohorts and then we're also experimenting with each of these cohorts to understand how that impacts their behavior.”
What this all means is that Chiptole’s rewards program will get bigger, the company will fine-tune its cohorts (like light users, for example), and then further drive behaviors that make sense for the customer and also for the Chipotle proposition.
Also, as Saleh points out, Chipotle’s increase in digital sales could allow it to offer features like easy reorder and order profiles to complement the current program. Chipotle could eventually introduce digital order profiles to enable easy reorder, similar to Domino’s. The pizza chain’s platform removes friction from the ordering process and generates loyalty members in response.
Talking about this “digital ecosystem,” Chipotle’s growth is far from a mature business in reality. It’s come a long way, quickly, however. Delivery is now live in more than 95 percent of units. Niccol said the brand continues to see a residual lift in delivery sales that last beyond any promotion. And there’s been “very little” guest overlap between its own in-app delivery and third-party partner apps. It’s been incremental in the 70 percent range, he added.
The brand runs most of its delivery business through DoorDash, although its not exclusive (Postmates and Tapingo are also involved). “The other thing that I'm also really excited about is, there are a lot of people on these third-party platforms that still have not gotten to try Chipotle delivery,” Niccol said. “Even though Chipotle is one of their top delivery partners, there is lots of runway with people that are using these aggregator sites to still have an opportunity to experience the Chipotle delivery experience.”