Dive Brief:
- Chipotle is courting Gen Z consumers with a new college-focused rewards program, called Chipotle U Rewards, according to a press release.
- Participating college students will receive 1,000 Chipotle rewards points and their accumulation rate will change from 10 points per dollar to 12 points per dollar.
- The rewards program could help drive spending and visits by younger consumers as the brand looks to regain its footing after two quarters of shrinking same-store sales.
Dive Insight:
The program is designed specifically to appeal to college students, and requires enlisting consumers to validate their enrollment through ID.me or through Chipotle’s site. The burrito brand teased that the program could have other features, like “surprise drop[s] during finals, game days or graduation giveaways,” according to the press release.
“Chipotle has long been a go-to destination for students' celebratory meals, and now members will be given special offers that tie to specific milestones throughout their college journey,” Curt Garner, Chipotle’s president, chief strategy and technology officer, said in a statement.
Chipotle also worked with Urban Outfitters to launch a series of consumer items, including water bottles, throw blankets and bean bag chairs, available at Urban Outfitters starting on Wednesday.
The chain has in the past run promotions aimed specifically at Gen Z consumers, like its Halloween late-night hours and ads featuring athletes from Ohio State University. But the addition to its core rewards program is a more significant play, combining targeted offers with an overall value play.
CEO Scott Boatwright teased the launch of the rewards program on the brand’s earnings call several weeks ago, saying the chain was looking to “get a little favorability on consumer confidence,” and that the rewards move would “drive increased engagement with the college students across the country, which are big fans of our brand.”
Chipotle’s same-store sales fell by 4% in Q2, according to the earnings call, a significant shortfall. Boatwright told analysts that Chipotle had several initiatives planned, following its Summer of Extras program, to increase enrollment in and engagement with its loyalty program.
Competition between restaurant brands over consumer spending has intensified as diners pull back on spending occasions. Much of the menu innovation over the last year and a half, like refreshers and snacking items, has been intended to court younger consumers. Chipotle’s college rewards program is one of the first times that a restaurant company has embedded a Gen Z-heavy strategy directly in the architecture of its rewards program.
