“Respect for customers & quality, because WE CARE”
The ambition of OXXO is crystal clear. Within 5 years OXXO should grow into the Starbucks of the drycleaning industry. Focal points in the concept are customer care and quality. In 2000 the European boutique style open air cleaning concept was brought to the US market by OXXO by opening the first store in 2002. Right from the start the business concept has a clear focus on environmental responsibility, convenience and automation, consistently implemented throughout its growth. Meanwhile OXXO has 60 franchises in the US and 10 abroad. The US operation is spread through the North-East part of the US, going from Texas all the way to New Jersey and Connecticut. We spoke to Mr. Salomon Mishaan, President and owner of International Cleaners Corporation (owner of the global OXXO Care Cleaners concept), about market position, trends, the OXXO business model and strategy.
‘WE CARE’ philosophy
As the name already explains OXXO Care Cleaners is an environmental conscious brand. Salomon is very passionate about this part, a franchisee really has to believe in the branding of OXXO, including the biodegradable solvent (Greenearth) and bags, recyclable hangers and best practices applied. Luckily, motivating franchisees to embrace this message worked out quite well for OXXO and proved to be one of the key success factors of the franchise system. OXXO is recognized repeatedly among the top US franchises in Entrepreneur magazine’s Franchise 500.
USP: store space
One of the interesting USP’s of OXXO is store space needed. ’An OXXO store needs less space because of the 24/7 distribution system of the garments. OXXO customers know this and hence come at any time’, says Salomon. A typical store size in the US is 250m2, an OXXO store is just 150m2, ensuring lower operational cost. The process is automated as much as possible using the latest technologies. After finishing there is no manual action needed anymore. A simple one-click on the button will bring the garment(s) to the counter or the 24/7 system.
Through automation OXXO stores just need a 150 m2 operating space
USP: embracing digitization & millennials
Another important unique selling point in the dry cleaning industry is OXXO’s position towards digitization and millennials. ‘We offer a convenient app for customers that facilitates communication with the customer and online orders. The UBER model and Airbnb are happening but the dry cleaning industry is not embracing these developments’ says Salomon. OXXO follows new tech and market developments (especially on millennials) and subsequently creates new concepts that meet the market demand of millennials. The result was the store model with 24/7 system with strict requirements for franchisees on environmental and social aspects. OXXO offers at home pick-up and delivery as well but it’s getting harder because customers seem to be less at home and leaving garments on the doorstep is increasingly not safe. Besides this, it is harder to provide a good quality service in the route model. As quality is one of OXXO’s major drivers as stated above, jeopardizing its brand image in this way is not the obvious choice. Therefore online orders with the routes model are being explored at OXXO. However this is not the pre-dominant channel. The same accounts for the locker model in apartments and offices.
Quality keeps customer coming back
In 2017 OXXO signed a partnership with NexoFranquicia for growth in Latin America. Salomon doesn’t see competitors so much in other franchisees. Convenience and reliability (the ‘we care’ philosophy) is the part which is important to drive these markets and this fits better in the model of OXXO. Quality keeps customers coming back, for instance with hand ironing that results in the best quality instead of using machines that have a lower standard. Furthermore OXXO expanded most successfully to Indonesia after a very specific inquiry of a likeminded entrepreneur in Surabaya, Indonesia. Other countries which are currently explored are Chile, Ecuador and the Middle-East. In the US OXXO is doing well, achieving growth where others are having hard times. The professional branding efforts of OXXO are one of the major contributors besides the USP’s described above.
‘We care’ philosophy for customers and quality
The future of dry cleaning industry will be changing. Salomon doesn’t foresee too much growth in the total US industry but the number of mom&pop shops will go down. Most of the Asian dry cleaners in the US have trouble to get their children to follow up in the business. New people that take over that want a franchise like OXXO because of its social and environmental profile, highly automated operations and modern service levels with consistent high quality. Acting upon these opportunities is a focal point for growth of the OXXO family.
The innovation pace in the industry is closely followed by OXXO and their model is on the front end of implementing new technologies. When visiting trade shows on professional textile care Salomon sees examples of innovations which they already have. Increasing the level of automation in the current situation would be difficult but OXXO keeps following the market closely.
For further growth more market share from the domestic washing machine will have to be taken, focusing on new textiles and changing dressing habits. The know-how on new type of textiles will need to be improved to make this happen successfully. It is important to notice in this respect that the US cleaners on average get some 700 garments per day (compared to European stores where 100 garments per day is quite normal). Salomon notes that the development of wet cleaning as an alternative to dry cleaning endangers this development as he believes it will result in more complaints and less trust in the professional industry. In terms of trends in textiles and fashion OXXO sees fast fashion is still around but slowly more high quality garments are coming back on the market. That for sure will bring the industry on track again.
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