The Online to Offline or O2O commerce is defined as a business model where online customers are brought to brick-and-mortar locations with creation of seamless digital experience before, during, and after the purchase.
According to data compiled by Statista and eMarketer, though a lot of product research are happening online, around 80% of all retail sales will still happen inside physical stores as late as 2021. E-commerce provides advantages such as tracking of consumer behaviour, payment information, and easy targeting over traditional commerce and it makes complete sense to formulate a strategy to bridge the gap between e-commerce and traditional commerce and O2O is the link between the two.
Businesses have started treating online and offline channels as complementary rather than competitive, allowing strategies like in-store pickup for online purchase, online purchase of products while at a brick-and-mortar store or return of online products in physical stores, a possibility.
Almost all the top e-commerce players have forayed into this space. Amazon is starting to roll out its AmazonGo cashier-free stores across the U.S. now and getting rave reviews for the new convenient shopping.
In China, Alibaba’s Hema stores have aisles that are interactive, digital screens reflecting product information. Pricing can be changed automatically via Wifi-connected, e-ink price tags. Self-check-out kiosks with cameras use facial recognition to pull up a payment app leveraging Alipay technology.
In India, this segment has been heating up with Reliance planning to enter into e-commerce backed by its 7500+ offline stores and Paytm scaling down its Paytm Mall to focus on the O2O space, led by its acquisition of NearBuy.
Recently, Samsung has opened its largest mobile experience store in Bengaluru that will showcase its entire range of electronic products. It has also partnered with Paytm Mall wherein customers can visit select Samsung outlets, scan the Paytm Mall QR code of the product they want to buy at the store to check online offers along with product details and then purchase the smartphone using Paytm as a payment mode.
Almost all major e-commerce players in different segments in India such as Myntra in fashion, Urbanladder and Pepperfry in furniture, Lenskart in optical, all have physical stores now.
We believe that the O2O commerce model is here to stay with small shops and sellers having unprecedented opportunity to expand online with this business strategy.
Credits : Akhil Handa,Aparna Anand