Niccol added COVID-19 gave its rewards program a jolt. The platform turned a year old in March and already has 13 million members.
For perspective, Starbucks’ industry-fronting Rewards platform, which attributed 48 percent of total U.S. corporate tender in the last week of May, grew to 19.4 million active users in Q2.
If you rewind the tape on Chipotle, though, one of Niccol’s biggest concerns when he left Taco Bell about two years ago was awareness. He called Chipotle “invisible.”
Beyond the marketing and cultural conversation shortcomings, Chipotle’s digital footprint was essentially nonexistent.
And as that latter element built up, through second make-lines, delivery, mobile app, rewards, pickup shelves, etc., customer education proved a stark gap, since it wasn’t embedded in the brand’s history. In October 2018, Niccol said Chipotle’s was at “less than 50 percent awareness” with regards to customers and its digital platforms.
That was changing pre-pandemic, and it’s only picked up since. Delivery is perhaps the best trigger. Stay-at-home directives encouraged new off-premises customers since they had to replace dine-in occasions.
Chipotle has flipped free service on and off throughout. Niccol said absorbing the cost is worth it because it’s surged first-time delivery users. It provides incentive to those new, browsing guests. And once they make the leap, they stick, he said.
As long as that’s the case, Niccol said, free delivery supports the investment.
There’s room to grow, too. He said Chipotle recently discovered it’s “one of only a few” restaurants that have the same menu prices in restaurants as they do for delivery.
“And most customers don't realize that but if you go through and do a side-by-side comparison, some of the restaurants are out there charging 20 percent, 25 percent, 30 percent higher menu prices, including some of the other fees,” Niccol said. “So, there's a lot of levers that we can pull. And we're confident that we can pull a few levers to make sure we can offset some of these acquisition costs and still have the attractive margins …”
He said Chipotle is already asking itself how it can take this boosted delivery business into a post-COVID-19 world. From different ways to pay for the service, fees to menu prices, and so forth. The “levers” Niccol mentioned. In other terms, Chipotle can start focusing less on customer acquisition for delivery and more on profitability.
Either way, Chipotle plans to exit the pandemic with a more robust digital ecosystem. Between delivery and rewards growth, learnings will unlock CRM opportunities from a marketing standpoint that simply weren’t there a few years ago.
It’s something Niccol and Chipotle are calling “journeys,”—ways the brand can incentivize behavior and impact frequency off scale once it collects customer data. He credited Domino’s as being one of the best in the business at this.
“Hopefully, in a year or two, you’ll be asking people to compare themselves to us,” Niccol said.