Chipotle has skilled wild success with its loyalty program all through the pandemic. Based on executives on the model’s most up-to-date earnings call in July, Chipotle Rewards has created deeper ranges of engagement and has pushed larger checks and frequency.
This system now contains practically 24 million members, representing about 25% of the model’s clients. These members helped the model generate a file yr up to now in digital gross sales, which surpassed the $2 billion mark as introduced right this moment.
Regardless of this milestone, the chain isn’t easing off the fuel pedal. The corporate additionally introduced a brand new characteristic for its loyalty program right this moment, known as “Extras,” which permits members to obtain further factors and gather “achievement badges.” It builds on the chain’s current announcement of its Rewards Exchange, which added a gamification ingredient to this system and permits members to trade factors for greater than 15 totally different rewards like meals and merchandise.
“Providing new methods to interact with Chipotle is important to the continuing evolution of our digital enterprise,” CMO Chris Brandt stated in a press launch. “The brand new Extras characteristic gamifies Chipotle Rewards by means of particular challenges and permits Rewards members to have a good time their achievements with particular badges.”
The corporate claims to be the primary nationwide restaurant model to launch badges as a part of its loyalty program. By gamifying its loyalty program, Chipotle is tapping a pattern accelerated by the pandemic and can doubtless enhance buyer engagement within the course of, as gamification has proven to do. There’s a cause the worldwide gamification market is projected to develop at a compound annual progress charge of over 27% through 2025.
There’s additionally a cause Chipotle isn’t resting on its laurels right here. Not solely has its loyalty program confirmed to be an efficient digital gross sales driver, however practically the entire industry has caught on to the benefits of getting such a program in place.
A recent report from Paytronix and PYMNTS finds that 47% of diners now use at the very least one loyalty program, for instance, and the share of customers utilizing a restaurant loyalty program elevated by 12% from January by means of April this yr.
Whereas different manufacturers bounce into the loyalty area, Chipotle’s Extras characteristic might present a major differentiator.
Maybe a much bigger headline from Chipotle, nonetheless, is its digital gross sales numbers and the tempo at which they proceed to develop regardless of the return of dine-in enterprise. In Q2, reported in late July, digital gross sales made up simply shy of fifty% of complete gross sales for the chain, or about $917 million.
Digital customers have a tendency to interact and spend extra with the model (in any respect manufacturers, in actual fact) and, as such, Chipotle has been intentional about sustaining and rising these gross sales. It has launched digital-only merchandise like its quesadilla, for instance, and is accelerating its Chipotlane mobile-order-ahead actual property mannequin. Consequently, the chain has skilled robust restaurant-level economics, pushing above $2.5 million common unit volumes. The chain is now aiming for $3 million AUVs and can proceed to depend on its digital enterprise and loyalty program to get there.
Throughout that July Q2 name, CEO Brian Niccol stated its loyalty program is a “key enabler” of its digital ecosystem.
“With this huge base of customers, Chipotle can distribute its personal content material, an increasing number of successfully, and drive deeper ranges of engagement inside this group than ever earlier than. We’re constantly capable of generate extra transactions from mild, medium and excessive frequency customers,” he stated. “… We’re optimistic we will proceed to construct upon our success [and] we’ll proceed to spend money on this system to take it to the following stage and produce other enhancements to this system which can be anticipated to be rolled out by year-end.”
Notably, a couple of yr in the past, Niccol stated digital gross sales on the firm might exceed $2.5 billion in 2021–a quantity that appeared formidable on the time provided that it will greater than double 2019 digital gross sales numbers. At its present tempo, nonetheless, and with 4 full months left within the yr, that quantity now appears attainable.
