The food and beverage industry has faced numerous challenges recently, driving many restaurants to adapt rapidly. Chipotle, like many others, had to pivot to stay competitive. As dining habits evolved, Chipotle saw a decline in sales but leveraged several key strategies to maintain its market position.
Chipotle’s Adaptation and Strategies
Chipotle’s resilience can be attributed to strategies implemented before recent disruptions. The company had already bolstered its food safety initiatives, including employee wellness checks and enhanced health protocols. They introduced advanced air purification systems, provided hand sanitizer, and mandated gloves for all tasks. Their commitment to digital sales has been crucial in navigating industry challenges.
Chipotle’s Marketing Strategy
Chipotle has always prioritized non-traditional advertising and word-of-mouth marketing. Here are some notable strategies they’ve employed:
1. Encouraging Customer Engagement
In early 2015, Chipotle launched a social media contest where customers submitted burrito-themed haikus. Winners, chosen based on retweets and likes, received dinner for two. This approach succeeded because it:
- Showcased customers’ creativity and encouraged sharing.
- Increased engagement by involving friends and family.
- Produced shareable, entertaining content.
2. Creating Compelling Branded Content
Chipotle collaborated with Tim Piper to create the web series “Farmed and Dangerous.” The series critiqued industrial farming practices without directly promoting Chipotle and used high-quality production values to engage viewers. This approach highlighted Chipotle’s commitment to sustainable agriculture and resonated with audiences.
3. Enhancing Customer Convenience
Chipotle developed a user-friendly app with features like pre-payment and store locator designed by Blue Rocket. The app quickly became the highest-rated app in ApplApple’sApp Store, reflecting its success in improving customer experience and convenience.
4. Generating National Buzz
Chipotle’s campaign, which included screening in 6,000 movie theaters and during the Grammy Awards, achieved significant PR impressions. The ad effectively told the story of Chipotle’s commitment to sustainable farming practices, resonating with viewers and industry critics alike.
5. Innovating with Influencer Marketing
Chipotle’s influencer marketing strategy involved sending free burrito cards to enthusiastic customers. Recipients shared their excitement on social media, creating authentic endorsements that boosted ChipChipotle’snd image without traditional celebrity endorsements.
6. Hosting Community Events
Chipotle has hosted “Cultivate,” a series of free festivals featuring live music, celebrity chef demonstrations, and sustainable agriculture awareness. These events provided a platform for community engagement and indirectly promoted Chipotle’s brand.
7. Running a Thought-Leadership Column
Chipotle’s “Food For Thought” column on the Huffington Post educated readers about food production and its impact. It strengthened its connection with its audience and supported its brand message.
8. Launching a Provocative Ad Campaign
The “Scarecrow” campaign, depicting sustainable food versus industrial farming, generated over 6 million views and 614 million PR impressions. Despite some backlash from critics, the campaign successfully sparked discussions about sustainable food practices.
9. Engaging Online
Chipotle engages with its audience on social media platforms, fostering food sourcing and sustainability discussions. With over 1.3M X (Formerly Twitter) followers and over 3.3M million Facebook likes, Chipotle leverages social media to connect personally with customers.
Chipotle’s SWOT Analysis
Since we are trying to examine Chipotle’s digital sales, let us examine its SWOT analysis. Hopefully, we can gain some insight into the competitive advantages that have allowed the company to dominate the industry.
Chipotle’s Strengths
- ProvChipotle’sasty food: Chipotle is well-known for providing customers with a simple, regular menu that began with oversized burritos and bowls and later grew to include salads, tacos, and tortilla chips with guacamole.
- Classic cooking methods: They use classic methods to cook their food with fresh ingredients and quality knives, pots and pans, and stoves and grills.
- High-quality food: Chipotle uses fresh ingredients guided by the philosophy of “Food with Integrity.”
- Fresh food: The company prides itself in not having microwaves or freezers in its restaurants. Instead, they have walk-in fridges with fresh ingredients, herbs, spices, rice, etc. They hand-make fresh food, such as guacamole, lime rice, and salsa.
- Reasonable prices: To satisfy their customers, they provide high-quality food and ensure it is reasonably priced—the prices range from $1.40 to $8.00.
- Responsibly-sourced meat: Leveraging the public’s focus on sustainability and animal welfare
- Ethical publicists insist on using animals that are “Responsibly Raised” without the use of hormones and other chemicals.
- Maintaining” close relationships with suppliers: They insist on having close relationships with reliable suppliers. This way, they constantly supply high-quality fresh ingredients and ensure high safety and quality at their restaurants.
- Digital-friendly: To tie it all together, they are very digital-friendly and have introduced an ordering app to help customers get their food faster during peak lunch or dinner hours. You can order food on their app minutes before coming to the restaurant. Additionally, you can cut the line and pay for your food in seconds.
Chipotle’s Opportunities
- Expansion into International Markets: They can try to expand their brand internationally because Chipotle operates over 3,500 restaurants in the US, they only have 37 in the global market.
- Digital orders: While Chipotle has done some digital marketing, there is a huge opportunity to expand its online orders (mobile, delivery, and catering). This is because only 35.3% of Chipotle’s annual revenue comes from digital orders.
- Upgrade due to intense competition: The restaurant industry is constantly upgrading, especially Chipotle’s catering casual dining and quick and fast-casual service. This gives Chipotle the chance to upgrade its ambiance, condition, brand reputation, location, service, quality, and taste of the food it offers, among other things that go into successful company branding.
- Training and retaining top-performing employees: Chipotle can gain a competitive advantage by maintaining its top-performing employees. It can also ensure that its employees keep performing well by investing in training new employees and providing a competitive salary.
- Drive-through options—While some stores already have a drive-through option, adding this to all restaurants will provide convenience and ensure easy access for customers; customer ac and customer-accessing delivery service in partnership with DoorDash. Creating a delivery program with delivery apps will allow them to retain more customers. For example, they can provide free delivery for orders over $10.
Chipotle’s Threats
- Loss of customer trust due to food-borne illness: Chipotle’s sales declined due to health-related incidents. As a result, many customers stopped dining at Chipotle and are only now returning. This slowed down Chipotle’s sales compared to their previous sales percentages.
- Legal proceedings against Chipotle: False claims are never good, but regarding Chipotle, their false claim that their food has a low-calorie count affected the brand’s reputation.
- Challenges attracting and retaining employees: The labor market has been identified as competitive because of the growing demand for restaurant dining and the general strengthening of the economy. So, Chipotle implemented a one-day hiring binge and got brand new workers.
- Supply chain problems: Given the strict animal feeding and raising policies, several storefronts had difficulties supplying certain ingredients.
- Growing competition: There has been increasing competition for the Tex-Mex business. This has put pressure on Chipotle and adversely affected the company’s share of the market.
Chipotle’s Weaknesses
- Dependence on the limited number of suppliers: Since Chipotle only uses a small amount of core ingredients, they rely heavily on their limited number of suppliers. While this supports the philosophy of quality and integrity, it has also led to significant controversy.
- High sodium content: Chipotle’s food is known to have high sodium content, which can lead to health issues like high blood pressure.
- Limited food items on the menu: For die-hard Chipotle fans who know what they are getting, this is not a problem because they go to Chipotle for their burritos/burrito bowls and tacos. However, people who want more variety would go to Chipotle’s competitors instead.
Conclusion
Chipotle has managed to survive mainly by improving on the efforts that it had implemented years before the pandemic hit. Their ability to understand what their consumers want is also equally important. They know that there are issues that they need to address so that they can remain relevant in the market through sustainable resources and their digital marketing strategy. Even with these gaps, what they have done physically at the storefronts and online has helped them become a major powerhouse in stocks, among other things.
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