Chick-fil-A’s mobile sales are skyrocketing as execs say the chicken chain is entering a new tech-obsessed era

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Chick-fil-A’s mobile sales are skyrocketing, with digital orders accounting for almost 20% of the chain’s business.
The chicken chain is thriving, with same-store sales up an average of more than 16% from early April to early May, compared to the same period a year prior.
Chick-fil-A executives say the chain is entering a new era in which mobile sales, delivery, and nontraditional formats like food trucks fuel growth.
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ATLANTA, Georgia — Chick-fil-A’s mobile sales are skyrocketing as the chain looks for new ways to drive growth.

Digital now makes up almost 20% of Chick-fil-A’s sales, the company recently told Business Insider. That is a significant increase from 6% at the beginning of 2018 and 16% at the end of the year.

"Ultimately our customers are all about convenience. … We’re increasingly demanding things be more and more convenient. And that pace is being set by the Amazons, the Netflixes, the Ubers of the world," said Kevin Purcer, Chick-fil-A’s director of customer digital experience.

The chain’s digital growth has been fueled by its revamped app and new loyalty program, which launched in August 2018. In particular, a month-long nugget giveaway helped drive app downloads.

Mobile sales are just one piece of Chick-fil-A’s quest to continue growing its industry-best same-store sales figures. Despite negative headlines and backlash sparked by Chick-fil-A’s 2017 donations to the Salvation Army and Fellowship of Christian Athletes, business has never been better at the chain.

According to figures shared with Business Insider, same-store sales at stand-alone locations increased by an average of more than 16% in the 30 days from early April to early May. Same-store sales at mall locations were up more than 18% on average in the same period.

Chick-fil-A’s new era

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Chick-fil-A’s uncommon status as a privately held company makes it difficult to directly compare its sales figures to other chains. However, based on research and consulting firm Technomic’s sales estimates, Kalinowski Equity Research says Chick-fil-A is poised to become the third largest chain in the industry in terms of sales by the end of 2019.

"If you go back like 20, 25 years ago, it was more of a regional chain and KFC was still the dominant No. 1 in the quick-service chicken category. Today, that’s very different," Kalinowski Equity Research founder Mark Kalinowski said.

Chick-fil-A is determined to continue driving same-store sales growth by evolving its busines model.

David Farmer, the vice president of menu strategy and development at Chick-fil-A, says the chain is entering a new era. In this innovation-centric new age, options like delivery, mobile payment, food trucks, and dark kitchens designed exclusively for takeout orders are set to drive massive growth.

"We’re not even quite sure what label to put on this yet. … Instead of being defined by a type of restaurant, what we now see emerging is sort of the whole ecosystem," Farmer said.

Purcer said that Chick-fil-A is preparing for a future in which digital orders in one form or another could represent at least half of the chain’s business. That necessitates investments in technology, changes in restaurant design, and new training for employees to couple accuracy with warmth.

"I think the biggest opportunity is continuing to figure out how to evolve our restaurants as mobile continues to grow," Khalilah Cooper, Chick-fil-A’s director of service and hospitality, said.

"We’re trying to predict: What does care look like as our customers’ experiences continue to evolve," Cooper said. "Will they be okay being served by a robot? I don’t know. They might be."

‘Organizations don’t last’

Hollis Johnson

The growing demand for convenience and the tech investments associated with that are common trends in the restaurant industry.

While digital ordering provides new channels to boost sales, it also demands reorganization of the day-to-day of business — especially for a chain like Chick-fil-A, which is known for employees’ hospitality and speed of service.

"The service is unfailingly at least good, but usually great or better than great," Kalinowski said. "Little things like being told ‘please’ and ‘thank you’ — it feels like you’re appreciated as a customer and a human being at Chick-fil-A. And especially in today’s very complex world, it’s just very nice to be able to go to a place where you feel appreciated."

Purcer says that Chick-fil-A is working to bring its service and sense of appreciation to the digital experience. The chain’s app has hidden Easter eggs that allow customers to do things such as gift rewards to friends.

L.J. Yankosky, the senior director of innovation and new ventures at Chick-fil-A, says the chain is trying to do the same thing in terms of delivery. Customers’ standards are still low, he says, but Chick-fil-A is working on new ways to exceed expectations and boost sales. That includes thinking about unconventional solutions such as autonomous vehicles or drones.

Farmer says that CEO Dan Cathy led Chick-fil-A in shifting its culture towards one that promotes innovation over the last decade. According to Farmer, Cathy mentioned in a recent meeting that one day Chick-fil-A will no longer exist. The company’s mission is, in part, to prevent that day from coming.

"If you look at history, organizations don’t last," Farmer said. The key is convincing customers that they need the organization, and that the death of the company would be an actual loss.

He added: "You have to evolve."

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Source: Business Insider – ktaylor@businessinsider.com (Kate Taylor)