Online-to-Offline commerce is a business strategy that attracts possible customers from online channels to brick-and-mortar stores. Online-to-Offline commerce (O2O) identifies customers on the internet such as in the emails, internet advertising and so on. Then the O2O commerce utilizes diverse tools and approaches to entice the customer to a brick-and-mortar store from the internet. This type of strategy includes techniques used in internet marketing with those used in physical stores.
Retailers can integrate by many ways from those based on providing experience (interpreted as ‘gimmicky’) to the practical (interpreted as ‘potential standard practice’) brick-and-mortar stores on the high street with their online ecommerce business.
There is a lot of information on blogs already about digital technology in retail stores such as Virtual Mannequiens, American/ AR, NRC Compatible Supermarket, and so on. The use of digital technology in retail stores has increased quickly over the last few years and has created a great experience for shoppers within the retail stores. The digital technology can be used in a variety of ways including the purposes of experience and observation, to enhance user experience (UX) for mobile users, increase convenience for shoppers, or promote a retailer’s online presence.
However, in a perfect digitally integrated world, there is a lack of internet services including wireless internet, contactless payment systems, click & collect, and so on; therefore, brick-and-mortar stores using a lot of digital technology should be thought of the norm by now.
Digital technology in brick-and-mortar stores is being innovated. There are lot of innovations to offer not only the digital basics but new ways of interactivity and online integration and going beyond the ways brick-and-mortar stores do business.
A few examples of stores using online-to-offline commerce including Wahaca, Lloyds Pharmacy, Sportsgirl and more.
Wahaca is a Mexican restaurant chain in London to drive mobile payments in some locations. The customers at Wahaca scan a QR code on their table which is connected to NFC tag. The bill will appear on the mobile screen and then the customer can pay for it. The customer needs to download an app in order to use the service. If the total bill needs to be divided among the customers, each customer needs to have their own app.
The healthcare chain, a Lloyds Pharmacy in Ukraine has introduced health kiosks in 9 of its larger stores till the end of 2013. Also known as Xen X5 kiosk, more customers can use the interactive touchscreens and printers to browse any of their products for sale, place orders, pay for merchandise by means of credit cards.
The sportsgirl, an Australian brand, has learned from the work of Ikea and Net-A-Porter by combining augmented reality into its offline concerns. Items that were published in the first half of 2014 in a print catalog can be scanned using the app, Sportsgirl. Customers can put the products they want in their homes from Ikea or watch videos about the products from Sportsgirl.
Five Strengths from Offline Retailers
Offline retailers have high inventory costs and overheads while they also have 5 strengths including: curation, knowing your customer, advisory in store, engagement and experience, and bridging old and new.
Retailers must realize that ecommerce is becoming more of a baffling ordeal than ever with hundreds of stock keeping units (SKUs) all trying to fit in a small screen. Consumers nowadays have so many choices as options, platforms and varieties that their attention span has reduced very much and decision-making has become more difficult than ever before. Reorganizing shelves based on data about products often makes the purchase process easier and faster in retail stores. Examples of reorganizing shelves include placing basmati rice next to Indian sauces, placing tinned tomatoes next to pasta, and reorganizing wings in categories especially mobile phones, fashion, furniture, home decorations, and more.
Know Your Customer:
There is a reason for buying offline which is a fairly anonymous experience unlike online. Retailers must get to know their customers better who stay in their proximity, understand the behavior of their purchases and start treating them differently. Unorganized kirana shops are doing it nowadays, but time has come for organized chains such as Café Coffee Day, Big Bazaar, and Shoppers Today to start doing it. Using the same tools of analytical and data that your online brethren are doing makes the experience within retail stores a lot more customized and personal.
Bridge Old and New:
Start using the latest technology and tools including cloud, software as a service (SaaS), and mobility to bridge the gap between new and older monolithic systems.
Engagement and Experience:
Shopping is not buying. Retailers need to understand that millennial customers don’t buy things but also have an experience. Try to bundle your product with services from setting up, usage, finance to post sale service and help. Start to engage with the shoppers through content, community, and experiences.
Deepak Wadhwani has over 20 years experience in software/wireless technologies. He has worked with Fortune 500 companies including Intuit, ESRI, Qualcomm, Sprint, Verizon, Vodafone, Nortel, Microsoft and Oracle in over 60 countries. Deepak has worked on Internet marketing projects in San Diego, Los Angeles, Orange Country, Denver, Nashville, Kansas City, New York, San Francisco and Huntsville. Deepak has been a founder of technology Startups for one of the first Cityguides, yellow pages online and web based enterprise solutions. He is an internet marketing and technology expert & co-founder for a San Diego Internet marketing company.