O2O - A Disruption between Online to Offline Business

Posted by pixelphant on December 22nd, 2020

Just imagine that you are living in 2022, and the experience of entering a real store will be an abrupt contrast to how things are right now! It will act as you will be enumerating items to a visual cart from an extreme advertisement board. For example, if you love the music quality of your pioneering headphones, then you will probably search in the nearby stores for those headphones. Thus such transactional points are of the customers in the online era are fully tracked in the current world. Let’s move back to the present world, where the main question is “How to trail the expenditure done in the offline world and valve into the Customer Behavior and the purchasing partners? The exact answer is O2O.

What is meant by O2O?

Online to offline business trick has been developed to bring the online customers to slab and mortar locations with it build a seamless digital involvement before, during, and after. In simple language, it brings potential customers from online platforms to generate a purchase in real stores. With the help of online marketing and advertising methods, it became easy for the retailers to find the customers online, creates awareness among them, and convinces them to complete the purchase in brick and mortar stores. In this strategy, both the online and offline channels act as complementary in the line of increasing sales rather than taking care of the eCommerce Competition. 

How did the O2O strategy work?

It became a problem for the retailers and once they even got bothered about they would not be able to compete with the retailers who their goods online mainly in terms of pricing and selection. Various employees and high cost (rent) are essential for physical stores to run their business and due to limited space, they are not able to offer a good variety of selection of goods. In the contrast, online retailers can offer a vast variety of products for selection without having an obligation to pay to a heavy strength of employees and only needs access to shipping companies for selling their products:-

• Products are being selected and purchased from the online channel and get picked out from the stores. 

• Being at the store, you can purchase the product online. Just for say, if you like a pair of shoes in the offline store but you are not getting the appropriate size, then you can place an order online of the same product with the desired size with the color and you will get the exact product at your doorstep. 

• The facility of returning is available. You can return the product purchased from the online channel at the physical location of the same. Techniques used in online marketing is also being incorporated in the O2O strategy with that used in the brick and mortar marketing and thus satisfies the above questions. 

The main advantage of e-commerce over the traditional method of business is that it is easy to track the customer’s behavior, payment method, and easy targeting. 

O2O Commerce trends

It is estimated that still, 80% of the retail sales will take place at physical locations till 2020. With the best efforts of many e-commerce websites, only 8% of the retail sales are taking place online. Let’s take the example of Amazon, with a .7 billion purchase of whole food in 2017, and on the other hand, it is noticed that the leader in the space of online commerce is placing its bets- in physical locations. Amazon also offers its consumers to pay with the amazon prime credit card and can earn 5% rewards. 

Except for Amazon, the top 10 retailers perform the brick and mortar operation. Walmart has spent high to overcome the gap between online users and retail locations with the major purchase of the company Jet.com in the year 2017. 

Research by McKinsey found that about 23% of the customers are comfortable paying high for the same day delivery. 

Future of this strategy

Taking into consideration that 80% of the customers search the items online before making the purchase and thus the future lies in the merging between online and offline sales. In my view, the scenario of e-commerce in India will take a drastic change in the digitalization of offline retailers. With the rapid growth of the internet in India, consumers are becoming more digital-savvy. Retailers now understood the fact that the internet has its significant importance for sales and boosts productivity. We highly recommended reading this article 8 promising trend that carries a bright Future of eCommerce.

A final thought on O2O Commerce

There are a hell lot of opportunities for the retailers for merging the online and offline commerce in a correspondent purchasing experience of customers which will keep them satisfied and it will be helpful for the retailers to increase their profits. If the big shots like Amazon and Alibaba are taking the advantage of O2O commerce and think that it should be the next step in the development then the retailers should be so sure it will prove a kind of windfall for you to develop your business. It will provide customers a seamless experience to resort to them again and again. 

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