What is O2O (Online-to-Offline) Commerce


This is Part 2 of a two part series. In Part 1, we talk about how retailers bring their offline businesses online through the lens of Starbucks. In Part 2 of this series, we outline the steps you.

Thanks to modern technologies such as mobile and in-app or location-based experiences, many businesses are now offering both options to their customers. Instead of going into the store, however, you pull up to a special pickup station and store employees bring your order out to you. Most of the time, customers make purchases at physical stores leave with no or little personal information gathered. Seventy million have downloaded the service that provides diagnosis and treatment support, appointment booking, and consultations with doctors through text, pictures and video.

QR codes as the natural link for online to offline interactions

o2o features can help: close the deal online thanks to instant messaging (WeChat is used by brands a lot for 1-to-1 communication) and mobile payments. Ensure the offline end of the business is % smooth and available.

Another industry is car retailers , who offer a private chat for leads in order to get closer to the deal than with a pure screen-based interaction. Where US banks and fintech startups have been rather slow to make mobile payments a reality through non user friendly processes and cuts on transactions , in China, the industry has been lead by e-commerce players.

Startups like Dmall offer an amazingly clever o2o service as they turn nearby supermarkets in inventory warehouses you can browse from your phone, order, and get delivered in 1h in a 2km radius. Leyou , the largest omnichannel retailer of baby products, also use the scan feature to allow mothers and parents to get additional information on products in store.

By scanning the barcode, they can see the traceability of the product to, again, purchase in confidence. Legacy brands also try their luck at o2o. One of them is Daimler , which experiments in Shenzhen, nearby the HQ of Tencent, a car rental and car sharing program.

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Walmart Grocery allows customers to shop online or via a mobile app and then visit a local store. Instead of going into the store, however, you pull up to a special pickup station and store employees bring your order out to you. They talk to you briefly and let you know if there were any item substitutions or problems, and then they load your groceries into your car for you. You can still buy items online and have them shipped directly to your home, or even to a local store for free.

Walmart Grocery is simply another service that allows customers an O2O-type experience. Publix and several grocery stores offer a similar service. Amazon even purchased Whole Foods with the intention of offering a fresh food delivery and local store option for its customers.

Rather than stick to physical or local opportunities exclusively, you can bridge the gap and offer both in a more convenient format. Start your free trial High-volume or established business? Call for a demo. Online to Offline O2O business is an indispensable strategy that saves the retail industry.

Recently, retailers all around the world have been bombarded with reports and predictions about global online sales growth. E-commerce is growing ten times faster than any other channels in the UK , for example, and its growth rate is reported to nearly triple that rate of the entire industry in the US in the first 3 quarters of E-retail sales are projected to account for However, the scenario of online channels wiping out offline ones seems to be impossible, since the retail industry has shifted into a new concept of Online to Offline O2O in which online and offline channels share the same importance in achieving success.

This is a new business model in which retailers using both online and offline channels as an intensive strategy. Using online marketing and advertising methods, retailers find potential customers online, raise their awareness of products and services, and draw them to make purchases in brick-and-mortar stores.

A popular example of this retail concepts is when a customer receiving an email offering a discount code, then visit the store to use this code and make a purchase. Starting an online sales channel , store owners gain a bigger customers pool.

With smaller budgets, retailers can reach more customers than those would ever come across their doors. Moreover, those customers are identified online based on their profile and favor, which helps generate more potential customers than traditional marketing. Other benefits of having a webstore have been recognized by store owners, which incentivizes them to start an O2O business.

This strategy also attracts digital-born retailers, resulting in a new revolution in retailing sector. Initially, the O2O revolution was led by Alibaba, the second worldwide e-commerce giant. That the two largest e-retailer on earth showed their interest in the O2O commerce is the strongest evidence for how powerful this retail model.

Based on this idea, retailers have improved the O2O strategy, making it more efficient and powerful. To seek for customers online, retailers use online advertising or marketing tactics such as promotion emails, social campaigns or blog posts. Those methods help identify the target customers and draw them to visit your physical stores. To encourage online shoppers to make purchases offline, retailers offer them benefits ranging from in-store pickup to in-store cash payment, testing, and fitting, free shipping, web-returned center, pick-up location or center for online sale in their actual retail stores.

The strategy can be varied depending on the product lines the retailers are selling. The first and most important benefit that O2O brings out to retailers is the brand reputation. Branding is much simpler and more efficient with online capabilities like advertising, social media, mobile wallet, SMS, mobile app, push messages, proximity services, combined with real-time data analytics, system integration, and AI.

Take advertising as an example. A man goes online and searches for a gift for his girlfriend on Christmas Eve, right in an article giving recommendations for Christmas gift, he can see a picture of a Christmas set from a cosmetics brand. If the man clicks on the picture, he is showing his interest in the products and consequently becomes a potential customer of that brand.