- Chipotle is testing digital pick-up windows called "Chipotlanes" in 10 locations with plans to bring it to a few dozen additional locations this year, executives told investors during an earnings conference call Thursday.
- These express windows allow customers to order online ahead of time and pick up their order at a specified time without getting out of their cars. Executives called it the fastest way customers can get Chipotle.
- Chipotle's digital sales, which included delivery and take-out orders, increased 42.4% last year, making up nearly 11% of 2018 sales, or more than $500 million, according to its earnings report.
With digital ordering expected to triple by 2020, many brands are scrambling to enhance digital ordering capabilities to allow for easier access to take-out and delivery. Chipotle is well on its way to meeting demand for digital orders, but it is certainly not alone.
Starbucks has plans to renovate a third of its stores to integrate more technology and formats, such as express pickup for mobile orders. McDonald's has been rolling out remodels across its franchise system that allow for more digital ordering. It previously said it would invest $6 billion through 2020 in these remodels, which include self-ordering kiosks and curbside pick-up lanes for mobile orders. Eatsa also is adding digital smart shelves that will display a customer’s name and show that their order is ready. Dunkin's on-the-go mobile ordering now makes up 3% of transactions, according to the brand's 2018 earnings report. It also opened 130 next generation stores in the U.S. that have dedicated mobile order pick-up areas.
Chipotle is also expanding its digital pick-up shelves, which are available in 1,000 stores. It plans to roll out to the rest of the stores by the middle of the year. Make lanes for digital orders, which allow staff to complete online orders without impacting the dine-in customer line, are in 1,000 stores as well and are on track to be in the rest of restaurants by the end of the year, executives said during the conference call.
Executives said the company's efforts were in part driven by making Chipotle more convenient to customers, and given the rise in digital sales, this has been paying off. During the weeks following a rollout of pickup shelves in Denver during the first half of the year, digital sales increased in the double-digits, for example.
During the fourth quarter, when it offered free bowls via delivery during the football college playoff season, transactions increased 2% and comparable sales increased 6.1%, according to the earnings call. Its push into delivery resulted in an 13 fold increase in delivery sales during the quarter compared to the year-ago quarter. Revenue overall increased to $4.9 billion last year.
Given the potential for significant same-store sales growth, digital ordering for both take-out and delivery will be key for restaurants to keep growing or be left behind.