Consumer Discretionary

O2O Commerce Business Model Benefits 

<p style="text-align: justify;">Give shoppers what they want&nbsp;</p><p style="text-align: justify;">How does this fit with the O2O commerce model? &nbsp;</p><p style="text-align: justify;">Research shows that 61% of shoppers would rather shop with brands that also have a physical location (versus those that are online only). &nbsp;&nbsp;</p><p style="text-align: justify;">Combine that in-store customer experience with an online strategy so shoppers can read detailed product descriptions without talking to a sales rep. They can use a mobile app to redeem points on a loyalty program and redeem social media coupons for money off in-store.&nbsp;</p><p style="text-align: justify;">Retailers can build niche audiences around their physical locations when they use these online channels effectively. This drives internet users toward brick-and-mortar stores&mdash;resulting in more foot traffic than if they were IRL-only. &nbsp;</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 14pt;">Save Money on Logistics&nbsp;</span></h2><p style="text-align: justify;">O2O commerce strategy&mdash;especially the buy online, pick-up in-store model&mdash;helps merchants cut down logistical costs. Retailers can regionalize their inventory and dedicate a percentage of their store space toward storing products that have been sold online. &nbsp;&nbsp;</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 14pt;">O2O Commerce Market Size and Opportunities&nbsp;</span></h2><p style="text-align: justify;">Retail sales are projected to reach $5.94 trillion by 2024.&nbsp;</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 14pt;">O2O Commerce Industry Statistics and Trends&nbsp;</span></h2><p style="text-align: justify;">E-commerce will make up 22% of global retail sales by 2023.&nbsp;</p><p style="text-align: justify;">To give context to this growth, 14.1% of global retail sales were e-commerce purchases in 2019.&nbsp;</p><p style="text-align: justify;">The growing number of e-commerce websites contributes to this holistic number. But there are many more e-commerce trends, in addition to those listed earlier, that are igniting this growth: &nbsp;</p><ul style="text-align: justify;"><li>Rise of mobile e-commerce</li><li>Increased implementation of omnichannel strategies (O2O)</li><li>Overall shift in shopping trends &mdash; like the power of influencers and social channels&nbsp;</li></ul><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">Understanding the Benefits of Online and Offline commerce.&nbsp;</p><p style="text-align: justify;">Physical stores also create high revenue since statistics show that customers who order online and pick up in-store or exchange items in-store tend to buy extra things.&nbsp;</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 14pt;">Conclusion&nbsp;</span></h2><p style="text-align: justify;">It&rsquo;s obvious that O2O commerce is now one of the most popular strategies throughout the retail industry, and no one wants to be an outsider in this race.&nbsp;</p><p style="text-align: justify;">With little to no surprise, companies like Amazon, Google, and Meta (Facebook and Instagram) continue to take precedence in the internet world. While they traditionally do not offer commerce solutions, these companies are focusing on more innovation in the commerce space.&nbsp;</p><p style="text-align: justify;">&nbsp;As we have seen omnichannel strategies become increasingly vital to growing companies, the leading internet companies are capitalizing on the opportunity to be leaders in the commerce world.&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;"><span style="font-size: 10pt;"><em>This article was contributed by our expert <a href="" target="_blank" rel="noopener">Chandan Laxman</a></em></span></p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><h3 style="text-align: justify;"><span style="font-size: 18pt;">Frequently Asked Questions Answered by Chandan Laxman</span></h3><h3 style="text-align: justify;">&nbsp;</h3><h2 style="text-align: justify;"><span style="font-size: 12pt;">1. How can an e-commerce business improve customer retention and loyalty? </span></h2><ul style="text-align: justify;"><li>Customers need to be engaged constantly through email marketing by sending them recurring emails</li><li>Keep the options for upselling and cross-selling, and returns</li><li>Offer price discount coupons after the first purchase, collect customer feedback, and provide free samples on new product launches</li><li>Pamper them with personalized shopping experiences.&nbsp;&nbsp;</li></ul><p style="text-align: justify;">.&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">2. What are some effective strategies for driving traffic to an e-commerce website?</span>&nbsp;</h2><ul style="text-align: justify;"><li>Engage in social channels and optimize your content with keywords</li><li>Work with influencers, craft engaging, high-quality content</li><li>Write blogs or articles, create targeted landing pages</li><li>Improve User Experience&nbsp;&nbsp;</li></ul><p style="text-align: justify;">&nbsp;&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">3. What are the most important considerations when selecting which channels to prioritize in a multi-channel marketing strategy?&nbsp;</span></h2><p style="text-align: justify;">Multi-channel marketing mixes many distribution and promotional channels into a unified strategy to attract customers.&nbsp;</p><p style="text-align: justify;">Multi-channel marketing should focus on a customer's demographic, psychographic, and purchasing history while considering the channels the customer frequents. &nbsp;</p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">4. What are the key trends driving the growth of O2O (online-to-offline) commerce?&nbsp;</span></h2><p style="text-align: justify;">To reach city dwellers and millennial customers, demographics.&nbsp;</p><p style="text-align: justify;">Expanded services like home grocery delivery and curbside pickup are other O2O services that retailers offer. Target, Walmart, Kroger, Nordstrom, and many other retailers offer contactless curbside pickup. This service enables shoppers to buy what they need safely and on time without having to enter the store or leave their car.&nbsp;</p><p style="text-align: justify;">&nbsp;The COVID-19 pandemic caused many brick-and-mortar locations to temporarily close their doors. Yet when lockdowns started to ease, and stores reopened, many consumers still had concerns about returning to complete in-store shopping normality. &nbsp;</p><p style="text-align: justify;">Did you know that 50% of people who used Google search before shopping looked for details about the store, such as locations or proximity? &nbsp;</p><p style="text-align: justify;">Also, 79% of holiday shoppers who visited a store turned to online search first.&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p>
KR Expert - Chandan Mangalore Laxman

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