The Femsa-owned convenience store chain is using AI tools to improve the personalization of its customers’ experience and is exploring using agents to provide suggestions directly in its stores.

Convenience store chain Oxxo, owned by multinational Femsa, has begun using artificial intelligence tools to better understand its users and thus increase its sales in Mexico, according to Patricia Vidaurri, Loyalty and CRM manager within the company's Consumer Strategy department.

With 23,000 stores in Latin America, of which more than 21,000 are in Mexico, Oxxo uses technology provided by Salesforce to interact more closely and efficiently with its customers as part of its loyalty strategy.

In an interview during Dreamforce 2024, the event that Salesforce organizes every year in San Francisco, California, Vidaurri said that artificial intelligence (AI) and Salesforce's marketing and data analysis tools have allowed Oxxo not only to better understand its customers but also to offer them a more personalized shopping experience.

Loyalty program

The first major step in this direction began with the launch of Oxxo’s loyalty program, which allowed the company to collect data on its customers’ purchasing habits.

“We had a huge opportunity to better engage with our customers,” Vidaurri explained. “When we implemented our loyalty program, we said: OK, we can now gain more insight into our customers, now how do we take the next step?”

The answer was clear: using artificial intelligence and advanced marketing technologies. Through platforms like Salesforce Marketing Cloud, Oxxo began building personalized “journeys” for its customers, interacting with them through channels like emails and push notifications.

"We use tools like dynamic content to increase conversion in our campaigns and automation to optimize reach on social media," he said.

But the real value lies in Oxxo’s ability to offer personalized product recommendations in real time, right at the point of sale. “One of my favorite cases is what we’re doing with personalization,” Vidaurri adds. “When the customer identifies themselves in the store with their loyalty program, we can offer them a personalized product as part of our recommendations.”

This personalization system in physical stores is already being tested in 2,000 stores and aims to expand nationwide by the end of 2024. According to Vidaurri, the initial results have been positive, and although Oxxo seeks to streamline operations in stores, it is also focused on offering value to the customer through these recommendations.

Artificial intelligence

Personalization is just one part of OXXO's strategic plan. Another key aspect is advanced analytics and the use of artificial intelligence models that allow them to predict customer behavior.

According to Vidaurri, the company is developing increasingly sophisticated models that not only identify purchasing patterns, but also predict churn or suggest specific products based on a customer's history.

“Today we are developing super interesting models with the help of artificial intelligence. From recommendation models and customer segmentation, to more complex models for preventing churn,” says Vidaurri.

"What we do is take advantage of this intelligence to connect it with our communication channels and create personalized campaigns," he said.

These models allow Oxxo to fine-tune its marketing strategy based on data and results obtained in real time. Each campaign they launch is thoroughly evaluated to identify what worked and what didn't, with the goal of constantly improving the conversion rate.

“It’s not like you create a model and then you get the results the first time. We do a lot of testing to see what works best and we fine-tune the models,” he said.

From the digital to the physical world

Oxxo's strategy is not limited to its physical stores. They have also been exploring ways to bring customers from the digital world to the in-store experience and vice versa.

This has been possible thanks to the use of communication channels such as WhatsApp and the creation of a super app that integrates multiple services, including the loyalty program and the option to make payments and recharges.

“We are taking advantage of the WhatsApp channel to invite our customers to follow a digital journey. For example, we take them to our app, where they can check their loyalty, make top-ups and more,” Vidaurri said.

“But we also take great care to ensure that customers return to the store, as that is our biggest muscle. The triangulation between digital and physical is crucial for us,” he said.

This omnichannel approach not only facilitates customer interaction, but also allows Oxxo to offer loyalty promotions that invite consumers to complete their experience in the physical store. From checking their progress on promotions to redeeming coupons, the goal is to create a seamless experience between both worlds.

Generative AI

One of the most innovative topics that Oxxo has begun to explore is the use of generative artificial intelligence to improve the effectiveness of its marketing campaigns. According to Vidaurri, they are testing this technology to optimize their emails and targeted messages, helping to determine what type of communication is most attractive to their customers.

“What is helping us is seeing which emails are opened the most and which words attract the attention of our customers the most,” he says.

The future for Oxxo could also include the implementation of AI-powered conversational agents, which could assist customers in their purchasing decisions directly in stores.

“We are looking at case studies on how artificial intelligence could be applied in retail. For example, a customer could say, ‘I’m craving something sweet,’ and we could recommend a product based on their purchase history and preferences,” Vidaurri explained.

Challenges and risks

Despite the progress, Vidaurri is clear in pointing out that the implementation of new technologies is not without challenges. One of the main ones is ensuring the security and protection of customer data.

“All the projects we have done in relation to the loyalty program have involved the IT team and a specific area of security,” he said. “The security of our customers is super important and all the data we use is anonymized.”

Another challenge has been training store staff to correctly use these personalization tools.

"We have to make sure that everything is working properly and that we are not interfering with other projects in the stores," she said.