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What does the future hold for the e-commerce industry with a boom in O2O model?

Posted by Harsh Shah
March 6, 2018

E-commerce, like all advances in today’s tech-savvy world, is experiencing modifications in the way it deals with its customers. Organizations are capitalizing on the growing need to reduce the time and bridge the gap between demand and supply.

E-commerce applications are now endorsing their services online and working towards a new generation of online to offline supply. This, unquestionably, is increasing their footfall and demand.

Taking things online helps to save on infrastructure costs, as you buy space (known as the cloud) on a server as opposed to buying physical space. This cloud acts as an interface between customers and businesses. These businesses often do heavy marketing on offers to gain initial traction.

From FirstCry to Lenskart to Fynd, a lot of organizations are today progressing towards a strengthened O2O (Online to Offline) model. The results of which are evident – maximized customer satisfaction and growth of the offline business.

What is the O2O Model, you ask?

Online-to-offline commerce, or the O2O model, is a business strategy that draws potential customers from online channels to make purchases in the respective offline stores. The O2O model is the best fit for services dealing with the restaurant business, food delivery, travel, consumer goods, beauty salons, movies, and the fashion industry. This model gives the customer full control of how they wish to utilize their service and time – offline or online. The deals are available to you, all you need to do is make your pick!


Online to Offline model


How to does the O2O model beat stagnation in the E-retail Industry?

Latest statistics suggest that there are 14 million retail outlets in India, hence, translating to a demographic distribution of almost 1,000 shops per 11 customers. These statistics can be used to understand why a collaboration between retail outlets and e-commerce can prove to be beneficial. And the O2O model is one of the quickest ways to achieve that.

Let’s have a look at more reasons as to why the O2O model is essential, and why should you invest in it:

  • Reach new customers: If your business has both online as well as offline stores, you should definitely consider an integrated O2O marketing strategy. Primarily, such an approach capitalizes on both the presences to drive increased sales. This can work in both directions, however, online to offline allows you to reach a much broader audience of potential customers.
  • Stay ahead of the curve: With the world rapidly adopting the O2O model, there’s a high opportunity cost to not investing in the same. Businesses which execute online to offline strategies often see significant returns, while competitors who keep both marketing strategies separate can lag behind. According to a statistic, more than three-quarters of searches on mobile with local intent result in offline purchases. Research also indicates that 73% of customers prefer to try before they’ve bought, in-store. Therefore, implementing an efficient e-reservation system provides your customers with the best of both worlds.
  • Increased overall sales: According to a research conducted by the International Council of Shopping Centers, nearly 70% of shoppers ordering online and collecting offline buy extra items impulsively which only goes to show that the O2O model can increase your overall sales in more than one ways.

Now, let’s see some benefits of such an integrated approach:

  • Lets you capitalize on your online traffic and social media channels to increase in-store sales.
  • Makes you the first choice of the prospective customers local to your stores when they are thinking about making a purchase.
  • Eases your customers’ product search as they can easily browse and search your full product range online, and buy in-store – best of both worlds.
  • Increases customer satisfaction manifolds by providing an effortless buying experience across all channels.
  • Allows you to personalize incentives for your customers online, and reap its benefits offline.

Many big names have stepped up their game by setting up an O2O model. FirstCry, Lenskart, PepperFry, and PayTM are just to name a few. With the clear benefits that this model offers, the coming year is sure to see a rise in the number of brands adopting this strategy.

How It Will Change the World’s Shopping Scenario

Offering such a choice to the users allows them to choose between the offline mode and the online mode depending on the need and convenience. For instance, if a customer is doubtful of the product at hand (which they’ve come across on your online store), they can visit the offline store of the same retailer to test the quality of the product. If completely satisfied, they can now go ahead and buy it – either online or offline. In some cases, the prices will be lesser online. So that they can get the satisfaction offline, and the lower prices online. With ease in comparison of prices and product options, customer’s needs are met easily, and a direct link is established between the retailer and the client, ensuring a potential future relationship of trade. A sense of control is maintained in the user who is provided a wholesome experience by these applications and websites, and an ability to choose is pretty much what brings you back for more!

With an increased reliance on online services to look out for offline services as well, the shopping scenario is changing today. An O2O strategy will undoubtedly improve your brand reputation, increase your revenue and loyalty, and accelerate your growth in the market. And, if that’s not enough, you’ll be doing your bit to keep the good old physical world shopping experience refreshing and exciting.