It seems that Chipotle Mexican Grill, Inc. CMG is following the steps of Starbucks Corporation SBUX. With an intention to improve customer experience through the strategic use of technology, Chipotle recently appointed Curt Garner as its first chief information officer (CIO) who held the same position at Starbucks. This move comes close on the heels of Starbucks’ appointment of Gerri Martin-Flickinger to the position of its first ever chief technology officer (CTO), as the world’s biggest coffee chain is fast expanding its digital retailing and marketing initiatives to drive business. (Read: Starbucks Appoints Former Adobe Executive as First Ever CTO). Both the moves reflect restaurant operators’ focus on technology.
Shares of Chipotle were up 2% in yesterday’s trading session in response to the announcement. Garner will join Chipotle from Nov 23, 2015 and will report to Jack Hartung, chief financial officer of the company.
Chipotle currently has approximately 1,850 restaurants and reportedly its app is not very user-friendly. Starbucks, on the other hand, has secured a leading position in leveraging its mobile and digital assets and loyalty and e-commerce platforms to create more revenue streams. Starbucks’ loyalty cards are gaining popularity and at present, more than one-third of all the U.S. and Canada transactions take place through Starbucks cards.
Moreover, Starbucks’ mobile app is undoubtedly one of the most widely used mobile payment apps in the U.S. Nearly 20% of all its U.S. transactions take place through mobile, more than double the figure from just a couple of years ago. In Dec 2014, Starbucks launched the Mobile Order & Pay service, which is now available in all U.S. company-operated outlets that is more than 7,400 locations.
Given these facts, the creation of the CIO position and the hiring of Garner is a crucial step toward improving its app experience.
Garner has held a variety of positions in Starbucks’ information technology group throughout his 18 years in the company. Meanwhile, the fact that Starbucks has one of the most successful apps in the retail industry makes this hiring all the more important for Chipotle.
The digital wave has hit the U.S. fast casual restaurant sector as more and more restaurants are deploying technology to enhance guest experience. Chipotle too is prioritizing its e-commerce program and is looking to extend its online ordering platform by adding the delivery option. Besides re-launching chipotle.com for its mobile users, the company has begun delivery of online and mobile orders in 67 cities using the Postmates delivery app.
The company has also launched an app for Apple Watch to allow guests to order before they step into restaurants. The chain is also testing new mobile payment methods, including the use of Apple Pay at restaurants and through the iOS app as well as the Google Wallet. The company also looks to introduce payment via smartphones at its restaurants before 2015-end, and further plans to offer payment features through the mobile app. The company has also re-launched its website to make it more mobile friendly.
Other restaurants that are cashing in on the benefits of technology include Red Robin Gourmet Burgers Inc. RRGB and Panera Bread Company PNRA.
Chipotle presently has a Zacks Rank #2 (Buy).
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