Chipotle Upgrades Geo-Tracking to Blend Digital and Physical Experience

Chipotle is souping up its mobile app with better geo-tracking features to improve customers’ mobile experience and drive the adoption of digital pickup.

On a call with analysts Tuesday (Oct. 25) discussing the brand’s third-quarter 2022 financial results, CEO Brian Niccol shared that the company is looking to integrate these capabilities to power hybrid digital-physical experiences.

“We are piloting advanced location-based technology to enhance our app functionality and provide a seamless, convenient experience for guests who opt in,” Niccol said. “The program can engage with Chipotle app users upon arrival to our restaurants and utilize real time data to enhance their experience with our order readiness messaging, wrong pickup location detection, reminders to scan the Chipotle Rewards QR code at checkout and much more.”

With this move, the fast-casual giant, which spans more than 3,000 stores across five countries, is leaning into one of its main competitive advantages: its mobile app. Chipotle CFO Jack Hartung noted that the brand’s 30 million rewards members present a “tremendous database” for targeted communications to drive ongoing engagement.

Indeed, Chipotle has one of the stronger mobile ordering apps on the market, according to PYMNTS’ Provider Ranking of Mobile Order-Ahead Apps, which draws from a proprietary combination of publicly available information and app usage data to which PYMNTS has access. Chipotle’s is tied for sixth place with quick-service restaurant (QSR) giant McDonald’s and major pizza chain Pizza Hut.

By integrating the app experience with the brand’s physical stores, Chipotle incentivizes the adoption of pickup options. By thus shifting the mix away from delivery, the chain has the opportunity to boost the margins for its digital business and to drive omnichannel engagement.

Winning over the omnichannel customer is especially key for restaurant brands today, considering that the majority of consumers are now placing restaurant orders online for pickup or delivery, as PYMNTS research indicates.

Findings from the study “Super Apps for the Super Connected,” created in collaboration with PayPal, which drew from a survey of more than 9,900 consumers across the United States, the United Kingdom, Australia and Germany, reveal that 70% of millennials in these four countries had made such a purchase in the prior 30 days. Similarly, 61% of Gen Z consumers, 68% of bridge millennials, 64% of Gen X consumers and 49% of baby boomers and seniors said the same.

Get the study: Super Apps for the Super Connected

Yet, Chipotle’s digital mix is actually falling. In the quarter, digital sales represented 37.2% of food and beverage revenue. A year earlier, these channels made up 42.8% of all sales. Hartung observed that the brand is seeing a “return to more normal habits,” which includes “less digital, more in-restaurant.” By integrating location-based digital technologies into the in-restaurant experience, the brand has the opportunity to attract in-person customers to its mobile platform, shifting the mix back and growing its loyalty ecosystem.

Additionally, by encouraging in-store pick up as opposed to third-party delivery, the brand can retain customer data and avoid paying aggregators’ fees.