Chipotle Mexican Grill, Inc. CMG recently partnered with Shopify Inc. SHOP to launch improved versions of e-commerce sites for its farmers. The move will help farmers in selling meat, dairy and grain products, and other items directly to consumers across the country.
This initiative will be of great help during the coronavirus pandemic as farmers are facing declining demand due to closure of restaurants, hotels and schools. The Chipotle Virtual Farmers' Market will provide Chipotle's suppliers a new stream of revenues.
Chris Brandt, chief marketing officer said “It can be intimidating for many family farms to change the way they do business, so we're giving our suppliers the right tools and resources to successfully launch improved eCommerce platforms.”
Chipotle is helping suppliers in developing their own websites by providing hosting fees on Shopify for two years. Chipotle suppliers like Niman Ranch, Petaluma Creamery, McKaskle Family Farm, and Meister Cheese, which has been working with the company for more than a decade will sell through their own individual digital storefronts.
Digitalization to Drive Growth
Chipotle is prioritizing its e-commerce program to gain customer confidence. The company is aggressively trying to make digital ordering more appealing to customers and more efficient for restaurants, in order to drive digital sales and retain customers during the coronavirus crisis. In the regard, Chipotle has redesigned and simplified its online ordering site, enabled online payment for catering, online meal customizations and collaborated with several well-known third-party providers for delivery. During the first quarter, it also announced a national delivery partnership with Uber Eats.
Another initiative that has been benefiting the company is its rewards program. It has more than 11.5 million enrolled members. Over the past month, daily sign-ups spiked nearly four-fold, which is another sign that the company’s digital platform is gaining traction. Clearly, 65% of newly-enrolled rewards members are new to the Chipotle brand, up from 51% during pre-COVID-19 period. In first-quarter 2020, digital sales grew 81% year over year to $372 million and accounted for 26.3% of sales.
Shares of the company have gained 25.7% year to date, against the industry’s decline of 9.6%.
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