{"id":13231,"date":"2020-05-01T23:46:41","date_gmt":"2020-05-02T03:46:41","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/chipotle-are-burritos-meant-to-be-digital\/"},"modified":"2020-05-01T23:46:41","modified_gmt":"2020-05-02T03:46:41","slug":"chipotle-are-burritos-meant-to-be-digital","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/chipotle-are-burritos-meant-to-be-digital\/","title":{"rendered":"Chipotle: Are Burritos Meant to Be Digital?"},"content":{"rendered":"

COVID-19 Impact on Restaurants and Chipotle<\/strong><\/p>\n

Most restaurants have suffered significantly during the COVID-19 pandemic due to their inability to serve customers in person and have had to quickly shift their business models in order to provide meals in different ways. The National Restaurant Association expects a $225B economic impact over the next three months, with 5 to 7 million jobs lost [1]. It is currently considered successful for restaurants to just break even and some have survived by creating limited menus with socially distanced pick-up, while others have developed meal kits for customers to cook at home.<\/p>\n

Like its competitors, Chipotle has been forced to quickly evolve in order to serve customers in a coronavirus world. After Chipotle shut down its dining rooms to contain the spread of COVID-19, the company acted quickly to increase its investments in digital and delivery services. Chipotle announced free delivery for orders made through the Chipotle app from March 15 through May, shifted marketing from live sports to online and streaming platforms (including TikTok), signed a national delivery partnership with Uber Eats, and even partnered with YouGov to study how Americans\u2019 lifestyles have shifted during the time social distancing in order to develop new menus [2]. While many restaurants are struggling to survive, Chipotle\u2019s digital investments have paid off as it reported net sales increases of 7.8% in Q1 2020, same-store sales increases of 3.3%, and digital sales growth of 81% (representing 26% of sales) [3]. In March alone, digital sales grew a shocking 103% year over year and represented 38% of sales.<\/p>\n

Chipotle\u2019s Pre-COVID Digital Business Investment<\/strong><\/p>\n

After suffering from multiple outbreaks of foodborne illness in 2015 and 2017, Chipotle brought on former Taco Bell CEO Brian Niccol in March 2018. Brian Niccol expanded investment in Chipotle\u2019s digital business, including enhancements to the Chipotle app and Chipotle.com, a digital rewards program, and new restaurant designs to better support digital business. Chipotle partnered with DoorDash and Postmates and fully embraced the digital food delivery model. Chipotle introduced walk-up windows (see image below) and pick-up portals for delivery drivers and customers ordering on the Chipotle app to simplify the pick-up process and even introduced \u201cChipotlanes\u201d, which are drive-thru lanes for customers to quickly pick up their online orders without getting out of the car (see image below) [4]. These investments paid off, as Chipotle announced digital sales growth of 78% (accounting for 20% of sales) in Q4 2019 [5].\"\"<\/a>
\nChipotle\u2019s COVID-19 Digital Response<\/strong><\/p>\n

Chipotle continued to build on its successful digital strategy and immediately responded to COVID-19 by increasing investment in digital. This move to increase investment was unique given the crunch on the restaurant industry but paid off in Chipotle\u2019s Q1 2020 results. Chipotle\u2019s response to COVID-19 included the following:<\/p>\n