O2O marketing has revolutionized the way customers shop from brands. This new model allows retailers to find customers online and drive customers to make a purchase at their nearest store.
Customers opting for this model can be due to multiple reasons such as convenience, competitive pricing, frictionless flow, easy returns, or others. Although the O2O model has grown popular in recent years, 69% of customers still prefer shopping online.
Let’s dig deep and understand how it works
What is O2O Marketing?
O2O Marketing a.k.a online to offline marketing can be defined as a complete commerce cycle that involves building targeted online consumer demand, converting them to retail store purchases, and then collecting, reviews, feedback, and building loyalty online.
This strategy identifies customers in the online space and uses tools to incentivize customers to leave the online space and visit the store to complete their purchases.
The rise of customer expectations has made it crucial for brands to offer hyper-personalized, dynamic, flexible, and curated experiences while shopping either online or offline.
Mobile commerce, social commerce, and proximity commerce are on the rise. Hence, people can search prices of goods from websites through their mobile devices, request expert comments from the social community, and find the nearest bricks-and-mortar through location-based service.
How does it work?
It treats online and offline as complementary channels rather than competitive. In this model, consumers can:
Browse and purchase products and pick up in store
Purchase a product online while at the store
Return a product purchased online at a physical store (A combination of both online and offline)
Advances in technology have now allowed brands to track consumer behavior in both online and offline spaces. This helps to target digital shoppers, optimize customer experience and incentivize them to visit their nearest retail store.
The goal of O2O eCommerce is to create awareness online, allow consumers to research and browse products and offerings and then visit the local retail store to complete the purchase.
O2O Marketing Statistics & Trends
Global retailers like Amazon, and Walmart is already in the league when it comes to Online to offline marketing. Amazon acquired Whole Foods for $13.7 Billion in 2017 to enter into the physical retail space. The purchase added 464 retail stores to the company. Now Amazon allows their customers to pay with Amazon Prime credit cards at Whole Foods and earn 5% rewards, the same as they would while buying online.
Walmart bought Flipkart to build a hybrid model and use Flipkart for its online presence and Walmart for its physical stores. They also purchase Jet.com for $3 Billion to bridge the gap between online and offline commerce.
A recent poll conducted by us on LinkedIn showed that 79% of responders believe that online and offline can work as complementary channels while 21% believe it to be competitive channels.
A Shopify report found that 82.5% of all retail sales happened inside physical stores in 2021. Modern shoppers also expect retail brands to keep pace with their changing needs and expectations.
Bonobos is an online store for fashion products. It recently launched its guide shops in NY on a trial base. The brand offers try-on experiences and enables customers to place custom orders on the go. These custom orders are delivered the next day free of charge. This initiative was so successful that the brand is going to open 20 such outlets across the US.
Magnolian market replicated its offline retail experiences on its retail channels. The brand used AR tools to entice prospective customers. AR makes it possible for brands to showcase products that customers have never touched before. Shoppers can use this tool to check how the products look in real life.
Another new trend is installing web kiosks that allow customers to place orders right from the store. Marks & Spencers is an excellent example of how they’ve used kiosks to drive online to offline marketing.
The Style Online touchscreens are designed to help shoppers stay up to date about the latest styling trend. It also provides a digital stylist that helps them combine garments and accessories to create a personalized style at the store.
“Rather than being a passing fad, in-store touchscreens are here to stay as they complement mobile commerce by offering the fast, high definition, widescreen digital access to information and offers that consumers now expect.” said a Marks & Spencer Official.
How can marketers optimize the O2O experience?
Shoppers love to browse and research products before completing their purchases. In the world of eCommerce, almost every detail such as information about the product, discounts, and offers can be provided online to ensure a seamless omnichannel retail experience.
Hence, it is crucial for brands to optimize their online and offline marketing strategies. Some of these strategies can include:
#1. Click and collect shopping
One of the biggest retail trends has been click-and-collect shopping. According to Adobe Analytics, US Click and Collect orders, both curbside and in-store pickup surged 208% between 1st April and 20 April 2020.
Customers favor convenience while shopping online. Some customers are even willing to pay more to opt for convenient options. 70% of customers take advantage of the ability to order items online and collect them from a nearby store. Hence, a great way to optimize your O2O marketing strategy is to enable customers to do click-and-collect shopping.
This simple technique appeals to every customer's desire for instant gratification and also encourages them to visit their nearest store. This, again, increases the chances of impulsive buying.
#2. Personalized marketing
Customers prefer shopping from a brand they can trust. Hence, personalizing your shopper’s interactions can go a long way in not only improving your brand image but also increasing sales.
With the advancement of technology, it is now possible to use Augmented Reality to inspect and test products digitally to create an immersive experience for shoppers.
Personalization allows brands to build a connection with their customers and let them know that they are listening to them to serve them better. A brand that provides the right products at the right time is a brand that stands out.
It is also essential to make sure that your app is connected across all touchpoints. An excellent example of this is Trip Advisor. The Trip Advisor app can be accessed offline thus allowing customers to access the app even when there’s no internet connection.
Although BOPIS (buy online pick up in store) may be a convenient option for some people, it may not be true for others. Shoppers living in busy cities find it extremely difficult to navigate traffic only to pick up their products from the nearest store.
In such cases, home delivery is more convenient for these shoppers. In fact, a Mckinsey reportfound that 23% of consumers are willing to pay more for same-day delivery. It is one of the major decision-making factors for customers and can play a major role in a brand’s success in O2O marketing.
One of the great ways to power this is by partnering with courier services. Another way could be hiring delivery executives to cater to a certain radius from your store.
In-store shopping behaviors indicate that shoppers usually look for three things while searching online:
✅Help to inspire a purchase such as “men’s watch brands”, “best makeup brands”
✅Help to plan the trip to the store such as directions, address, “restaurants near me”
✅Help narrow down purchase options
Retail brands should create a Google My Business listing for each store location and optimize it. It is highly recommended to add:
Opening and closing hours
Other details such as parking space availability
Hence, it is essential to invest in local SEO so that your brand can show up when your customers are looking for local stores to shop from. For instance, when a customer searches “restaurants near me”, the aim is to show up in search results and craft content that is convincing enough to make them visit your store.
A Complementary Shopping Experience
Despite the recent trends of digitization, most consumers care about making a connection with a brand. Combining online and offline commerce is an essential part of building this connection and marketers must ensure that each channel complements the other. Using new technologies, brands can use data insights and store apps to increase personalization effort and cater to customers better.