As eCommerce continues to inflect, it’s not just happening around traditional online orders that are shipped to your home. The opportunity is broader and includes any digital or mobile ordering. We’re talking about things that are fulfilled offline/locally — everything from summoning an Uber to curbside pickup at Target.
One such area of local eCommerce we’ve been tracking is mobile order-ahead. This subcategory has been steadily rising for years but has found more fertile soil in the Covid era. So just like eCommerce in general, it’s growing with the broader movement towards tools that reduce consumers’ time in crowded spaces.
Starbucks is leading this charge as we’ve examined, including closing several traditional locations and ramping up mobile order-only stores. Then there are upstarts such as Joe Coffee, built solely around the mobile order-only principle. We’ll continue to see this category gain speed, especially in the QSR vertical.
The latest company to get on the order-only train is Chipotle. In fairness, it’s been offering mobile ordering for years and was one of the first multi-location QSR brands to do so. But its latest move — like Starbucks’ push — is a mobile order-only location. Based in Highland Falls, NY it’s likely the first of many to come.
Specifically, the prototype location won’t include a dining room or front-service line. It also won’t take orders from walk-ins. All orders will be received and expedited digitally through Chipotle.com, the Chipotle mobile app, or its third-party delivery partners who will offer this new functionality on their own apps.
The extent of the physical location is a small waiting area where customers pick up orders. This footprint could bring some practical advantages in terms of location scouting (more on that in a bit). These locations will also handle large catering orders, which integrates some of the economic advantages of cloud kitchens.
In addition to the dynamics and drivers outlined above, Chipotle points to the growth in its own digital sales as driving this move. Specifically, it saw last quarter’s digital sales triple on a year-over-year basis. Chipotle CTO Curt Garner tells USA Today this is the latest of many moves that will follow customer demand signals.
The order-only push is fitting for Chipotle, a company known for streamlining food ordering and logistics. Mainstreaming genuine Mexican cuisine has been a feat for the company, and it’s done this with lots of operational innovations. Getting setback by well-publicized health hazards has motivated further innovation.
Logistically speaking, benefits of a digital-only model for Chipotle include lowered overhead and a physical footprint that can bring it to more places, especially in urban areas. The speed and efficiency in order expediting — compared to a more casual dining setting — can also make these locations high-yield properties.
Panning back, we project more mobile-order only models across the QSR sector. This will happen as consumers get the taste in their mouths (excuse the pun) for a streamlined ordering process. Just like it saves businesses money/overhead, as noted, it can save consumers time which is always valuable.
As we discussed with RevLocal’s Aaron Boggs on a recent episode of Localogy Leaders (episode details to come), both sides of the supply/demand equation will push this digital transformation. For consumers and local businesses alike, the long-term benefits of covid-accelerated fulfillment models are crystallizing.