Chipotle's Store Closure A Marketing Stunt

In the aftermath of Chipotle's E. coli and norovirus outbreaks, Chipotle said sales at stores open at least a year dropped 30% in December.

As a response, Chipotle Mexican Grill recently announced several moves to“to reassure our customers that this can’t happen again”, including:

• DNA-based testing on many ingredients to ensure quality and safety

• Making changes to improve food safely by moving the chopping of tomatoes/lettuce and shredding of cheese to a central location, blanching onion/avocados/limes to remove any potential germs before they're chopped, and updating meat marinating protocols

• New food safety training protocols

• Closing its ~1,900 restaurants for a few hours on February 8 to host an all company meeting via video conference with its ~60,000 employees nationwide to talk about food safety changes, thank its employees for their hard work during the crisis, and restore employee morale. Stores are expected to reopen at 3 p.m. local time that day, meaning the chain will sacrifice sales during lunch. "We're going to let all of our folks know about how this happened, and, in detail, all the steps that we're taking to ensure that it won't happen again . . . It's going to be a great rally" explained Chipotle founder and co-CEO Steve Ells.

• Paid sick leave for employee to help reduce spread of germs

• Launching a multifaceted marketing and PR campaign that includes direct mail and traditional advertising in early February after it expects the CDC to wrap up its multi-state investigation into the food-borne outbreak, with the goal “to tell our story about what happened,” according 
  to Mark Crumpacker, chief creative and development officer 

• Offering a $50 discount and a limited-edition gift from the maker of Tabasco on the first 1,500 catering or "Burritos by the Box" orders for 20 or more people for Feb. 7

• Rolling out a store-by-store grass roots marketing effort that empowers each store manager to create his/her own local reactivation campaign by doubling the amount of free food each store is authorized to give-away

With these moves, the company has finally decided to move from defense to offense in their response. But what took so long? Why hasn't the company moved quicker to own the conversation?

So far, the store closures have made the biggest headlines. But the jury is still out whether this is a smart strategic decision or not.

A restaurant chain temporarily closing its doors is not unprecedented. In 2008, after returning as the CEO, Howard Schulz famously closed all Starbucks to improve the consumer experience at the beginning of his effort to reignite sales growth.

But for Chipotle, this peace offering again seems like its too little, too late. If they were going to do this, shouldn't this have occurred weeks ago?  February 8th is still relatively far away, and several more weeks removed from the actual outbreaks. So in effect, the company is prolonging the news cycle.  

And, besides, is it even the right strategy and message for what the brand needs at this stage? The vast majority of consumers aren't reading the company's press releases or watching the news, so the store closures are likely to lead to some element of confusion and re-raise awareness of the outbreaks.  Was "my" store impacted by the outbreak?  Are they closing the store to clean it?  

From a symbolic standpoint, closing its doors to consumers may alos actually be sending the wrong symbolic message. In fact, the very act of shutting the doors, physically blocks the consumer out and reduces transparency verses inviting consumers back in to give the brand another shot. The notion of transparency in a crisis is critical, even more important when your brand's foundation is built on transparency as is Chipotle's. To this end, the store closures feel like the wrong action for this event and more of a PR stunt to grab headlines.  

I'd argue the brand's response should have been based on four pillars: responsibility, transparency, even higher standards, and community.

1) The brand, as it did, should quickly come out to take responsibility for the outbreak and ensure the risk of future outbreaks will be minimized. The brand needed to quickly present a clear action plan. Part of quickly taking responsibility means transitioning from defense to offense by owning the conversation and minimizing the spreading of any false information. To achieve this, in addition to actively pushing out information, the brand needs to be present in the places consumers are going to find information. To this end, I would have recommended activating a search engine campaign (both SEO and SEM) on a variety of potential terms consumers are likely to search (e.g., Chipotle outbreak, Chipotle food safety, etc.) to learn more to help funnel them to your website vs. third party websites.

2) The brand needs to maintain full transparency with its consumers. The company still has not broadly announced the cause of the outbreak incidents. This feels like a major mistake. Could it be that the either still do not know the cause or it's multiple products lack of transparency flies in the face of the company's stated values. Lack of knowledge escalates the fear. As opposed to consumer just avoiding the salsa or lettuce, they avoid everything. I was disappointed to notice that is was very difficult to find any information of the outbreaks or the action plan on Chipotle's direct website. As best as I could tell you either had to type in specific terms into Chipotle's search tool or run a google search to to find https://www.chipotle.com/update. I'd also argue the company meeting on February 8th should be open to the press and broadcast over the internet for consumers to view as well in an effort to continue promoting transparency.

3) Chipotle's brand is all about holding fast food to a higher standard in terms of food quality, and in many ways their response as outlined above does just this. Most of these measure far exceed industry standards and Chipotle should rally the cry for other restaurants to match them. The action item of offering employees sick leave is enormous and I do not believe the company has done a good enough job of promoting to ensure it receives more media attention. This should resonate very broadly not only as a food safety measure, but also as a workers rights/benefit.  By pivoting the media discussion to groundbreaking steps like these, Chipotle has the opportunity to regain its pedestal as a champion for fair and humane business practices. 

4) Finally, and most importantly, the brand needs to get people eating their food again, even if its free food. The best way to do this is through community engagement. This means not just open the doors to its community, but also actively going out and engaging in new ways with them. It's easy for consumers to distrust a national brand, but much harder a restaurant that's ingrained into their community. So investing in supporting local schools, holding community gatherings, offering free giveaways, or bring a friend in campaigns. The $50 off catering orders for the Superbowl is a good start, but why limit it to 1,500 customers? Eating the food at group gatherings reduces the stigma and judgement of coming back to the brand.

Apple iPhone 7 Headphones - When Simple Isn't So Simple

Reports recently surfaced that when Apple releases its new iPhone 7 later this year it will no longer include an industry standard 3.5 mm headphone jack. 

Instead, rumor has it, the phone manufacturer will design a new set of headphones that fit into the lightning cable port, which is the port that iPhones have historically used for power and data transfer. Consumers will also be able to use wireless headphones.

Apple will likely argue that this move allows the company to simplify the phone design and make the phone thinner. The notion of minimalism is at the heart of Apple's design principles - so this move is consistent with the brand's equity. From its products to its stores, Apple's simple design is as much about making the products beautiful as it is about making the usage experience as simple and easy as possible for the consumer.

However, in this case, Apple's quest for simple isn't so simple.

That's because the news, while seemingly minor, has unleashed a wave of consumer frustration with nearly 250,000 consumers signing a petition in a matter of a few days protesting the potential move. 

Many of these consumers are outraged that their existing headphones would be obsolete and they'd have to spend money to replace them. In this case, the simplest solution for consumers is continuing to allow them to use whatever headphones they want.  Other consumers, along with environmentalists, are also concerned about the environmental impact of the electronic waste from the disposal of obsolete headphones.

Simply put, while this move is inevitable in the long-term.  Apple may have to rethink the short-term impact of this design move or at consider including a free adapter.