O2O: Bridging the Gap for the Online-to-Offline Consumer Experience
As e-commerce becomes more prevalent year-over-year, online and brick & mortar stores (and even DTCs) are scrambling for consumer attention. At the same time, demands for extraordinary experiences grow from both a digital and a physical retail point of view, but from the consumer perspective and certainly from the brand perspective, there is a struggle between the two worlds when it comes to how they work together.
Enter O2O: Online-to-Offline commerce.
O2O is a business strategy designed to bring online customers to brick & mortar locations, as well as create a seamless digital experience before, during, and after their purchases.
Many factors conspired together to create the need for an O2O strategy, but the most important one is that consumers see desktop-mobile-physical shopping and buying as fluid while many companies and brands distinguish them, set attribution targets for each, train and incentivize employees in silos, and make it hard to share data between digital and physical interactions.
The positive spin and the core of O2O strategy? More touchpoints and more opportunities.
Gone are the days of warehouse shelving and big brown boxes stuffed with peanuts and bubble wrap--consumers are driving expectations higher while asking for eco alternatives and at-my-fingertips convenience all at the same time and from every step of the buyer journey.
According to a December 2018 Shopify article, “Every brand wants to capture its market in totality, to reach customers new and old through mediums on-site and off. Today if your company doesn’t have a multi-channel marketing strategy...good luck keeping up.”
This means providing online, brick & mortar, catalog, mobile, and social options in unison. The article also explains that, on average, multi-channel marketing and selling increases revenue by 38%, 120%, 190% with each additional channel respectively.
This kind of growth is considerable and needed in today’s retail climate. However, one area that still gets left unnoticed is how one bridges the online/on-site gap.
Typically, businesses offer consumers choices: they can buy online and have it delivered, or they can go to a store and make a purchase. But what about those who research online and then go to the store to make their purchase? What happens when they order a product and want to pick it up in-store? More so, how do businesses convince consumers to buy online and pick up in store to not only create a more well-rounded shopping experience but to also create their own unique experience and brand-in-hand experience? What is the incentive for consumers to do both?
The answer lies in the conversation that already surrounds O2O. The known benefits of O2O commerce allow businesses to treat online and offline channels as complementary rather than competitive.
O2O Provides Opportunities for:
Rapid in-Store pickup of products purchased online
Online purchase of products while at a physical store (quantity, size, color variations and more vs a lost sale)
Physical store returns & exchanges for online purchases
Additional incentives and well-rounded shopping experiences when customers combine online and offline purchases
A combination of online tracking to offer personalized shopping experiences while consumers are actively shopping
New opportunities for trial and loyalty program engagement.
Research shows that many customers still want to have shopping experiences that allow them to have tangible interactions with the products they want to buy, but they don’t want to give up their technology.
In a recent study by CBRE Group, discovered that even younger people prefer an in-store, tangible shopping experience. The survey showed that 70% of millennials prefer shopping in stores, even though they spend an average of 7.5 hours a day online. This is one of the top reasons some 22+ beloved “DTC Only” brands have all opened physical spaces beyond temporary pop-ups (including Bonobos, Glossier, Aday, Everlane…and more)
However, despite the need for online and on-site stores to be interchangeable, there is still work to be done, but we are seeing considerable progress with how the two are working together in more efficient, collaborative ways. Nordstrom, Warby Parker, and Allbirds are all examples of companies who have their finger on the pulse of O2O strategy, and they see returns on investment for their efforts. We believe this competitive advantage will only increase over time.
The bottom line is that the buzz around O2O is getting louder, which means e-commerce, retail, packaging, marketing strategies, and on-site touchpoints are essential to address holistically--they can no longer be separated or standalone.