OXXO normalising the unthinkable: deliveries in less than 30 minutes
of deliveries in less than 30 minutes
of on time orders
The challenge
Over-delivering on the promise of ultra-fast on-demand deliveries.
For more than four decades, Oxxo has cemented itself as an ideal alternative for Mexican households, offering convenience, fair prices and a wide assortment at its nearly 19,000 locations. With the look and feel of a classic convenience store and a value promise rooted in the community, Oxxo has achieved a 12.5% market share of retail sales in the country.
But don’t be fooled by appearances. This traditional player has been betting on its online channels for years, first making inroads in 2012 with the aim of removing barriers to ecommerce for Mexican consumers. Today Oxxo accounts for around 35% of the revenues of its parent company, FEMSA, and its innovative spirit is more alive than ever.
After years of operating home delivery services without achieving the desired efficiency, the Oxxo team set itself a new ambitious challenge: to redefine express delivery and break the barrier of deliveries in less than 35 minutes, impossible until then. Achieving this goal meant finding a partner as ambitious and innovative as they were, after countless failures with previous suppliers.
“After years of resistance and scepticism when approaching a supplier with our mission to achieve 30-minute turnaround, we thought it was really going to be an impossible task. Three months after we started working with Instaleap we had not only achieved that goal, we had far surpassed it.”
The solution
Total synchrony for delivery without delays
Agile approach specialising in supermarkets
Oxxo found, in Instaleap, the formula to meet one of the most ambitious goals in the market: guarantee deliveries in less than 30 minutes. The secret is to comprehensively operate the entire value chain considering 3 key critical points: pick-up times, responsiveness to peaks in demand and actionable control of order delays. After years of real-world experience and countless industry insights, InstaLeap helped address challenges that seemed impossible for Oxxo to conquer.
Efficient order picking:
The optimal execution of the picking process is crucial to reduce delivery times. To achieve this, our automated allocation algorithm assigns orders to the shop closest to the customer, which has the available resource capacity to complete the tasks. In addition, the picking app allows the picker to perform his tasks in a simple and efficient way and to have a direct and real-time communication channel with the consumer. In this way, immediate action can be taken to coordinate replacements for out-of-stock products or other adjustments to the order.
In order to further optimise the process, Oxxo has implemented, together with Instaleap, a model of grey shops with no end-consumer entrance, configured exclusively to optimise picking times. The same allocation algorithms are integrated into this model to guarantee critical mass of orders at the different points, thus ensuring the profitability of the operation. All of this, taken together, has allowed picking and delivery times to be optimised to the point of maximum operational efficiency.
Guaranteeing supply to respond to peaks in demand
In order to ensure near-instant delivery, it is imperative to have the dispatch resource capacity to meet demand, even at peak times. Having the fixed resources to be able to respond to these peaks, and to quickly open new service areas to be closer to the end consumer, implies cost overruns due to underutilisation at off-peak times.
The Instaleap platform supports different operating models. Among these is the full service model, in which the same resource is responsible for the picking and delivery process. This model can be integrated with 3PL companies that offer a home delivery crowdsourcing service, thanks to our API-first, flexible and modular architecture. This guarantees a robust fleet offering to respond to peaks in demand and facilitate the opening of new areas, without having to deal with the overhead of fixed resources.
For Oxxo, Instaleap’s flexibility in its integration with 3PL companies has been key to guaranteeing delivery times of less than 30 minutes in a cost-effective manner. The seamlessness of the operation offered by our platform has ensured that the operation flows efficiently and interconnectedly without the end customer noticing the use of two different providers.
Immediate and reactive delay alerts
It is inevitable that unforeseen events will occur with an order that will affect the delivery times set at the outset. This is where Instaleap’s control tower comes into play. This has an immediate flags activation algorithm in case of any delay in an order, allowing Oxxo operators to act in real time and proactively to prevent failures in the delivery promise.
Our control tower allows the operation to be managed in an organised manner and has a user-friendly interface that provides traceability of the problems that are solved on the fly. In addition, it allows the operation of the entire logistics network to be centrally controlled. This has facilitated the expansion process with Oxxo and its complex logistics network.
“We have managed to build a highly efficient logistics operation by attacking the critical points that prevented us from meeting the delivery times we were looking for. Today we can say that we are the fastest player in the market”.
The
result
Redefining expectations for speed and delivery
The joint effort of Oxxo, and the dedicated Instaleap team, allowed in just three weeks to be on air with the robust technology needed to operate. Since implementing Instaleap, Oxxo has exceeded its delivery promise expectations, achieving 80% of its orders delivered in less than 30 minutes, a metric unthinkable just a few months ago. Through an orchestrated operation down to the last step and an optimised enlistment process, Oxxo has managed to keep the promise of convenience, speed and confidence to its customers with over 90% of orders delivered on time .
But the journey does not end here. Together with Oxxo, we continue to identify new challenges to conquer with the ambition and innovation that has characterised our partnership from the start. In an industry that does not stand still, continually reinventing ourselves is key, which is why in the future we expect expansions, both geographically and in terms of grey shops, and the exploration of different operating models and new concepts that will ensure competitiveness for the future.
