Chipotle teams with Venmo as it takes its rewards program national

Chipotle Mexican Grill is expanding its loyalty program nationwide as its digital platform continues to see major growth.

The company began testing Chipotle Rewards, a points-based loyalty program, across several markets last fall in a move to make the brand more accessible and digitally innovative.

CEO Brian Niccol told CNBC a rewards program has been the most-requested initiative among its consumer base. With digital ramping up in recent quarters — growing some 66 percent in the fourth quarter of 2018, accounting for nearly 13 percent of sales — Niccol said loyalty is another way to get users engaged online, and he expects it will have a “multiplier effect” on the company’s digital business.

“In our test markets we’ve seen people get more engaged and more committed in our digital system with the loyalty program,” Niccol said. “We see people participating even more with delivery, mobile ordering and ordering within the app.”

Users can enroll via the Chipotle website or app, receiving 10 points for each dollar spent, earning a free entree with 1,250 points. First-time users will also receive free chips and guacamole and can accrue rewards online, in store or on the app.

The company also announced it teaming up with digital wallet company Venmo for launch week, depositing surprise amounts of $1 to $500 in fan’s accounts through March 15. Chipotle will become the first restaurant to have its own branded emoji — the Chipotle pepper — on Venmo, used for splitting and sharing payments. Those who want a chance to receive a reward can enter the phone number associated with his or her Venmo account on ChipotleRewardMe.com, and approximately 25,000 people a day will be paid during the partnership.

“We think it’s great for Chipotle to show up in unexpected places, but in really relevant places for people and how they want to communicate with each other,” Niccol said of the partnership with Venmo.

The company has made digital innovation a priority under Niccol’s tenure, which began last March. It has installed second lines in stores to handle orders that come in via app or web and pickup shelves in stores for digital orders. It is also testing “Chipotlanes,” drive-thru windows dedicated to pickup for digital orders. Wall Street has responded well to the changes — the stock in 2018 had its best year since 2013 and is up more than 40 percent this year.

Chief Digital and Information Officer Curt Garner said it’s important to develop experiences that are digital through and through — having an app alone isn’t enough.

“Chipotle has a significant advantage in that we’ve built dedicated kitchens to serve digital orders, and we’ve integrated those kitchens both with our app and with delivery drivers, so that the orders come in a way that’s seamless. They don’t interrupt the flow of the line in the restaurant and we can promise that those orders will be delivered to customers, or will be available for pickup, in some of the fastest times in the industry,” Garner said.

Analysts say a smart digital presence is felt across platforms including apps and social media. Brands that are getting it right view social media as a part of a larger technology infrastructure that extends from screen to store.

“Where the growth is happening right now in the restaurant space is primarily on the digital side,” said Peter Saleh, managing director and restaurants analyst at BTIG. “If you are good at all of these things — digital, delivery, take out, social — you are generally taking share in the space, and growing faster than the rest.”