Have you ever heard of Groupon, Zomato, Justdial, Dineout, Table Grabber, Bookeventz,
and Quicksearch? What do all these businesses have in common? Well, they all bank on the
online to offline commerce (020).
Offline to online commerce is the new buzz word among industries and it has received a lot
of traction and investments in China. It is new business model which basically connects
online digital world to offline world. It is a strategy which involves finding consumers online
and enticing them to visit offline stores. It basically integrates the online commerce and
offline brick and mortar stores.
Here, companies employ various techniques to make consumers aware about their products
and services online and then attract them to visit offline stores where actual commerce or
purchase happens. The goal is basically to drive the consumers away rom online space and
enticing them to visit physical brick and mortar store to make the purchase.
Why O2O is a trillion-dollar
opportunity?
According to TechCrunch, O2O is a trillion-dollar opportunity.
As per the eMarketer, online retail currently constitutes 0.9 % of the total
retail sales. It is expected to reach to 3 percent by 2020. If we consider US
where online retail space has already saturated, online retail only contributes
about 8 percent of the total retail sales. This is testimony to the fact that offline
channels pose a great opportunity which is still untapped.
If we talk about India in particular, then people still
believe in touch and feel concept and they park more trust with offline
retailers as opposed to online retail space. There is also a term called
“Showrooming” where consumers visit local stores to actually touch and look at
the products and then they end up purchasing that product online. For some
industries like Car and Restaurants, it becomes even more imperative to create
the brand and product awareness online and entice customers to shop offline.
A lot of startups
have flourished in O2O space which promises to combine both online and offline
channels. We all are very well aware of the Zomato which is local search and
discovery service for restaurants. It leverages the potential of O2O space and
has turned into a global giant in a short span of time. Similarly, there are a
host of startups offering restaurant booking service. Also, services
marketplace has been growing at an unprecedented rate in India. Some of the
prominent companies in this domain are Justdial, Sulekha, Yellowpages,
Urbanclap and Quicksearch.
Businesses are employing a lot of techniques and tools like
e-coupons, Store locators, emails, newsletters and other form of direct
marketing to make the consumers aware of their product and services online. The
ultimate task is to make those consumers visit the offline brick and mortar
stores where actual purchase happens.
One of the advantages that O2O commerce has over traditional
e-commerce is that performance of digital campaigns is easily quantifiable. On
one hand, traditional e-commerce measures conversion using cookies and pixels while
on the other hand, it is difficult to track conversion in offline commerce
alone. Here comes the O2O which integrates the both channels and makes it
easier to track conversion rate and performance of online marketing campaigns.
In the nutshell, businesses can generate high value for themselves as well as
the consumers by bringing the benefits of online commerce to offline channels
By: Rahul Ranjan
PGP 1st Year (2015-17)
Indian Institute of Management Raipur
