Online food delivery has experienced rapid growth in recent years as many consumers prioritise convenience over price. According to a report by ResearchAndMarkets.com, the global online takeaway food market is estimated to be valued at US$230 billion in the year 2027, growing at a CAGR of 9.9 per cent in the years from 2020 to 2027. US restaurants are already taking advantage of the surge in demand for home delivery and are investing in better digital offerings to streamline the experience
rience. In recent weeks, fast food chain Chipotle revealed a new type of restaurant, designed purely to facilitate its online orders. The Chipotle Digital Kitchen caters only to online orders for pick-up and delivery and despite having all the smells and sounds of a real restaurant, it offers no dine-in facility or service line. Surge in digital sales Chipotle said the new prototype stems from rapid growth in its online business. Digital sales tripled year over year in the third quarter which ended September 30, and consumers are demanding more digital access than ever before. “Digital sales grew 202.5 per cent year over year to US$776.4 million and represented 48.8 per cent of sales last quarter,” Tabassum Zalotrawala, chief development officer at Chipotle, told Inside Retail. “About half of the digital sales were via delivery, benefiting from our expanded partnerships, with the remainder coming from order ahead transactions.” As part of the Digital Kitchen process, all customers are required to pre-order through the Chipotle website or app, or through third-party delivery partners to ensure a “convenient and frictionless experience”. Catering to larger orders Beyond the typical online orders, Chipotle’s digital store will also facilitate larger orders for groups and catering. The fast food chain has offered a catering service since 2013, but these orders will now have a separate lobby with its own dedicated entry in the Digital Kitchens. In September, Chipotle launched a Group Ordering feature on its app, allowing up to 20 people to customise an all-inclusive pick-up or delivery order though a shareable link. So far, customers have been pleased with the experience of the Digital Kitchen. “The customer response has been overwhelmingly positive, and we’re starting to see digital orders and catering orders roll in,” Zalotrawala said. Flexible expansion Chipotle said the new concept will allow the chain to expand into more urban areas that wouldn’t support a full-size restaurant. “We are planning to open more Digital Kitchens and are carefully evaluating the best trade areas for Chipotle in which to expand this test. These will be areas where Chipotle has a higher volume of sales through digital business,” Zalotrawala shared. Cultivate centre Innovation is front of mind at Chipotle and the need for bigger and better digital offerings has prompted the opening of a Cultivate Center in Irvine, California, minutes from Chipotle’s corporate headquarters. This new innovation hub features Chipotle’s official test kitchen where recipes are tested and menu items crafted. A consumer research centre on site allows the company to gain critical insights from focus groups. “We leverage our stage-gate [project management technique] process to test, listen and learn from customer feedback, and iterate before deciding on a national menu launch,” Zalotrawala said. “The Cultivate Center’s test kitchen will kick-start this process for future menu innovation.” The 22,000 square foot facility features the same eco-friendly materials and designs found in Chipotle restaurants and is also home to a fully equipped development lab, metal cutting and woodworking machinery to test prototypes before they are rolled out in a restaurant environment. There’s even a production studio for filming commercials and developing creative for marketing purposes.