Online-To-Offline (O2O) Commerce
What Is Online-To-Offline (O2O) Commerce?
Online-to-offline (O2O) commerce is a business strategy that draws likely customers from online channels to make purchases in physical stores. Online-to-offline (O2O) commerce recognizes customers in the online space, for example, through emails and Internet advertising, and then, at that point, utilizes various tools and ways to deal with tempt the customers to leave the online space. This type of strategy consolidates procedures utilized in online marketing with those utilized in brick-and-mortar marketing.
How Online-To-Offline (O2O) Commerce Works
Retailers once worried that they wouldn't have the option to rival e-commerce companies that sold goods online, especially in terms of price and selection. Physical stores required high fixed costs (rent) and numerous employees to run the stores and, in view of limited space, they were unable to offer as wide a selection of goods. Online retailers could offer a huge selection without paying for as numerous employees and just required access to transportation companies to sell their goods.
A few companies that have both an online presence and an offline presence (physical stores) treat the two different channels as supplements as opposed to competitors. The goal of online-to-offline commerce is to make product and service awareness online, permitting possible customers to research different offerings and then, at that point, visit the nearby brick-and-mortar store to make a purchase. Methods that O2O commerce companies might utilize remember for store pick-up of things purchased online, permitting things purchased online to be returned at a physical store, and permitting customers to place orders online while at a physical store.
Special Considerations
The rise of online-to-offline commerce enjoys not wiped out the benefits that internet business companies appreciate. Companies with brick-and-mortar stores will in any case have customers that visit physical stores to perceive how a thing fits or looks, or to compare pricing, just to eventually make the purchase online (alluded to as "showrooming"). The goal, thusly, is to draw in a certain type of customer who is available to strolling or heading to a nearby store as opposed to waiting for a package to show up in the mail.
Online-to-offline (O2O) is connected with, yet not equivalent to, the concepts of "clicks-to-bricks" or "click-and-mortar" models.
Online-To-Offline (O2O) Commerce Trends
Consider Amazon's $13.7 billion purchase of Whole Foods in 2017 and you can see where the leader in online commerce is putting down a portion of its wagers — in physical space. Amazon will even let you pay with your Amazon Prime credit card at Whole Foods and earn 5% rewards, equivalent to assuming that you utilized your Amazon card to pay online.
This isn't to imply that that traditional retailers aren't hedging their wagers also. Walmart has spent powerfully to bridge the gap between online users and retail areas, including its 2016 purchase of web based business company Jet.com for roughly $3 billion. One of Walmart's goals for the acquisition was to make advances in arriving at city occupants and millennial customers, demographics that Jet had succeeded in drawing in with their enormous client base that added around 400,000 new customers every month.
Getting companies that as of now have a tremendous online shopping customer base is just one O2O commerce strategy retailers like Walmart are utilizing. Expanded services like home basic food item delivery and curbside pickup are other O2O services that retailers offer. Target, Walmart, Kroger, Nordstrom, and numerous different retailers generally offer contactless curbside pickup. This service enables customers to buy what they need in a safe and ideal way without entering the store or leave their vehicle. Walmart executives see these types of value-added services as key to the company's growth and reported that online business sales became 97% in the U.S. in the second quarter of 2020.
Highlights
- Target, Walmart, Kroger, Nordstrom, and numerous different retailers have increased home delivery and/or curbside pickup services as two effective O2O strategies to address consumer issues for safe shopping options.
- Strategies that O2O commerce companies might utilize remember for store pick-up of things purchased online, permitting things purchased online to be returned at a physical store, and permitting customers to place orders online while at a physical store.
- Amazon's purchase of Whole Foods Markets and Walmart's acquisition of Jet.com are two instances of O2O commerce.
- Online-to-offline (O2O) commerce is a business model that draws likely customers from online channels to make purchases in physical stores.
