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Taco Bell's ex-CEO used these 6 strategies to spark Chipotle's incredible turnaround

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Taco Bell's ex-CEO used these 6 strategies to spark Chipotle's incredible turnaround

Massive mobile push

Massive mobile push

Digital sales grew 100.7% at Chipotle, totaling $206 million and making up 15.7% of the company's sales in the quarter.

"Consumers love the app experience. They love the new website experience," Niccol said. "And that's resulting in them committing ... more and more to this easier access approach through the digital channel."

Delivery

Delivery

From mid-December to early-January, Chipotle made a massive delivery push, including offering free delivery to customers. The deal drew in many people who had ditched or never eaten at the chain. Niccol said on Wednesday that nearly half of those who took advantage of the deal were new or lapsed customers.

Together, delivery and mobile order-ahead highlight the rise of Chipotle's second-make line for orders that are not placed on the chain's assembly line. This second-make line, which will also be utilized for drive-thru orders, has the potential to continue to boost sales.

"We expect digital sales mix to continue to improve for the foreseeable future as the company increases the number of locations with a digitized second make line (currently ~1,300, all units by year-end), adoption of loyalty grows, and delivery expands," BTIG's Peter Saleh said in a note on Thursday. "As we have stated, we believe digital transactions will help drive margin expansion for Chipotle as all digital transactions are executed on the more labor-efficient second-make line."

A new rewards program

A new rewards program

Mobile growth goes hand-in-hand with Chipotle's new rewards program, which launched in mid-March with the promise of free guac and the possibility of free money. It reached one million members in just 10 days.

On Wednesday, Chipotle reported that the program already had three million members.

Revamped marketing

Revamped marketing

Chipotle — known for its quirky, nontraditional advertising strategy — has gone more mainstream with its marketing under Niccol's control. In the most recent quarter, the chain ran ads during March Madness and used social media to highlight the chain's ingredients and its free delivery deal.

"Collectively, these marketing efforts help drive culture, drive the difference and ultimately drive the Chipotle purchase," Niccol said.

Making it more enjoyable to visit Chipotle

Making it more enjoyable to visit Chipotle

Chipotle has revamped its internal training and leadership programs, in an effort to improve operations that Niccol says is already paying off.

"If you had a chance to be in Chipotle lately, I think they have really improved versus where we were three months ago, six months ago or even nine months ago," Niccol said. "Our crews are staffed — they know about how to make great food, they're doing line testings, the restaurants look great."


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