Dive Brief:

• Chipotle grew digital sales by 100.7% and accounted for 15.7% of sales, or $206 million, during the first quarter, according to an earnings release.
• The company’s loyalty program, which launched March 12, has already enrolled 3 million members, and will allow the company to create more targeted marketing based on data collected from the program, CEO Brian Niccol said during an earnings conference call on Wednesday.
• Additional initiatives to increase the company's digital sales include the completion of self-service pickup shelves in relevant restaurants and digital make lines, which have been rolled out to 1,300 restaurants and will be in all applicable restaurants by the end of 2019, Niccol said.

Dive Insight:

Chipotle is proving that digital ordering is a lucrative revenue stream. In 2018, it grew digital sales 42.4% for the entire year, so its staggering first quarter momentum will likely continue to build throughout 2019. It helped grow comp sales to 9.9% during the first quarter, and the company expects year end comps to be in the mid to high single-digit range, according to the earnings release.

The fast casual restaurant has been developing more ways to grow digital orders and to accommodate more pickup traffic. It launched a new website in February, and the company is now averaging more than 1 million digital transactions per week, Niccol told investors during the conference call.

Its digital system includes order ahead, delivery, catering, digitized second make lines, mobile order pickup shelves and now the Chipotle Rewards program, Niccol said. For those restaurants that are fully built out with mobile order capabilities, Niccol said digital orders can make up to 30% of sales.

Chipotle is also rolling out "Chipotlanes" to provide drive-thru windows for online order pickups, and the company expects the test to ramp up later this year, Niccol said. Its mobile pickup shelves also have been improving delivery times, which are now under 30 minutes, since drivers are given a time when the order will be ready for pickup.

The chain also added Lifestyle Bowls for mobile and online orders to make it easier for customers with dietary preferences to order bowls without having to individually customize them. Niccol said these bowls generated more than one billion media impressions during the first few days of the menu launch. Other promotions, such as its free delivery bowls during the college football bowl season, helped attract new and lapsed customers to its app and delivery capabilities, he said.

Chipotle isn't the only fast casual chain ramping up its digital sales capabilities. Cava is planning to roll out its own drive-thru pickup lanes and is already in the process of adding pickup shelves. Sweetgreen has also added pickup shelves, and eatsa has created a digital, interactive shelf for other restaurant operators. Given Chipotle's early successes with its digital sales, others will likely follow suit, especially since these initiatives helped the company drive a dramatic and rapid turnaround after a 2015 food safety scandal hurt sales.