There are a few areas to unpack. To start, Chipotle launched its long-awaited rewards platform on March 12. Niccol said the chain already enrolled 3 million members. And Chipotle is still in the early stages of gathering data that can be used to more efficiently target customers to engage and grow their loyalty. Currently, guests earn 10 points for every dollar spent and receive a free entrée after accruing 1,250 points, with periodic bonus offers. The real personalization is just beginning.
“The rewards program gives us a currency that we can use to incent behaviors and is a key part of our digital system flywheel,” Niccol said.
The program will provide topspin to Chipotle’s digital system, in time. In other terms, the direct impact won’t show for a bit. In Q1, in fact, the chain absorbed a 30-basis point negative hit as a result of deferred revenue from the platform in its same-store sales.
“We're just getting started with using that information to then smartly market to those individuals,” Niccol said of the data.
Over the next year, he added, Chipotle will keep building enrollment. As it does, it will have a bigger universe to create programs to incentivize behaviors and, in theory, change customer behaviors associated with it. Chipotle’s targeted marketing has ample room to grow.
What Chipotle could do through offers and other features specific to a guest’s behavior, Niccol said, is turn light users into medium ones, and non-users into light guests. “We haven’t had a chance to market with these folks on a couple-of-month basis yet,” he said. “It’s really early, but I think the positive is we’ve got a lot of evidence that consumers want to be a part of it and we’ve had evidence in our test markets that when we use the data smartly with them, we do see behavioral chances that result in a positive outcome for our sales growth.”