Fast and Convenient
http://www.memphisitcouncil.com/about-us.html
Experience
http://gaijincamera.com/
What is O2O Marketing?
Online-to-offline marketing– a business model or a marketing
strategy that involves using online methods to encourage consumption or purchasing at offline physical businesses (e.g. actual stores or restaurants)
2 Main Processes of O2O
Drive consumers captured online to purchase products/services at offline presences
1. Attracting consumers using online methods, thereby directing them to offline physical businesses
2. Improving customer experience at offline physical businesses using online methods in order to encourage consumption or purchasing
History of O2O Marketing
• 1990s: Popularization of e-commerce and emergence of “bricks and clicks” model = business model that integrates online and offline marketing efforts
–However, number of internet users were relatively limited
Number of Internet Users Worldwide
History of O2O Marketing
• Mid to late 2000s: Spread of smartphones and social media
↓• Increasing number of consumers become able to
connect to the internet at virtually any time or location↓
• Integration of online and offline marketing efforts becomes virtually seamless
↓• Around 2010: Term “O2O” begins to be used
Global Device Penetration Per Capita
Percentage of All Internet Users that Use SNS
Number of registered users of major SNS’s
Impact of Technology on O2O Marketing
• Advance in technologies open doors to various opportunities– GPS (Global Positioning System) and other location-detecting
systems– QR (Quick Response) codes: a complex form of barcodes that
allow smartphone users to access information easily and quickly
– AR (Augmented Reality): allows users to combine real word images or videos with computer-generated information or imagery
– NFC (Near Field Communication): allows electronic devices in close proximity to exchange information in a wireless manner
etc.
Characteristics of O2O
The customer acquisition process takes place online
The customer often reveals his identity online
Product or service is delivered and/orconsumed offline
No geographical and time restrictions
Transactions and user behavior can be easily tracked
When to adopt O2O?
Average time customers wait for the receipt of goods
Waiting and delivery time
Relevance
✔✔✔
Degree to which the marketing channel makes it easy to purchase the product
Spatial convenience ✔✔✔
The assortment provided by the marketing channelProduct variety ✔✔✔
Add-on services provided by the channelService backup ✔✔
Number of units the channel permits a customer to purchase on one occasion
Lot size ✔
Push or pull?
O2O is actually both….
It is a pull strategy since promoting brand awareness makes customers actively seek services on that website, i.e. the customer requests the product and pulls it through the delivery channel
On the other hand, it’s a push strategy since O2O companies actively push information to the client through intense online and (sometimes) offline advertising
Categories of O2O models
Companies that adopt O2O O2O Service Providers
BMW car configuratorBuild-your-own car
What are the advantages for BMW?
More physical store traffic
Customer education (communication with the customer)
Customer involvement
Tracking user behavior
Retailers: Argos, Macys’
Omni-channel of macy’s
Seamless Experiences!
In 2012, Macy’s had total sales of $ 27.7billion which was 17.8% growth
Search and sendbeauty spotTabletsTrue FitCustomer Service
Retailers: Argos, Macys’
Seamless Experiences!
Avoid Stock-outCustomized and Fast ServiceSeamless shopping
O2O Service Provider
O2O Service Provider
http://pardonmycrumbs.blogspot.jp/2012/04/uber-las-affordable-life-changing.html
customized and use of technology tools
4P Analysis
Worth the priceMore information
Product Price
Place Promotion
Change how the products are experienced and sold: seamless purchase experience
Competitive Price
Big Data and E-CRM
Attention
Reach
Action
Share
Loyal
Kuttner (1998, p.20) “The Internet is a nearly perfect market because information is instantaneous and buyers can compare the offerings of sellers worldwide. The result is fierce price competition and vanishing brand loyalty. ”
E-CRM Attract customers to offline stores
Coupon
Connect to EC
Data Base
Data Connection
Data Integration
Point Card
Point Card Data
POSData
Member Informationdigitalized
Offline customers
become membership
IC card reader
Big Data and E-CRM
E-CRM Attract customers to offline stores
Coupon
Connect to EC
Data Base
Data Connection
Data Integration
Point Card
Point Card Data
POSData
Member Informationdigitalized
Offline customers
become membership
IC card reader
Big Data and E-CRM
E-CRM Attract customers to offline stores
Coupon
Connect to EC
Data Base
Data Connection
Data Integration
Point Card
Point Card Data
POSData
Member Informationdigitalized
Offline customers
become membership
IC card reader
Big Data and E-CRM
E-CRM Attract customers to offline stores
Coupon
Connect to EC
Data Base
Data Connection
Data Integration
Point Card
Point Card Data
POSData
Member Informationdigitalized
Offline customers
become membership
IC card reader
Big Data and E-CRM
Advantages for companies / service providers
Significantly lower cost compared to other channels of mass advertising (especially considering global reach of online services)
Purchasing behavior can be exactly tracked and analyzed
Ability to communicate directly with target audience
Pricing strategies can be better tailored to clients’ needs and hence result in higher profit
Possibly higher customer retention level
Disadvantages for companies / service providers
Total transparency on the web leads to intense price competition if product/service is not differentiated sufficiently
Leads to potential channel conflict if physical stores compete for same customers
Very low barriers to entry
Web reputation difficult to control
Infrastructure needs to be maintained and developed further constantly
Advantages and disadvantages for consumers
Ease of use (shop anywhere and anytime, easy payment); ‘best of both worlds’ as O2O combined the advantaged of both online and offline shopping experience
Transparency (price, information, customer feedback)
Immediate feedback / review system (generation feedback, user-generated content)
Advantages and disadvantages for consumers
Loss of anonymity
Privacy concerns with shopping data and behavior
Difficult to sell high priced goods or services over the net (lack of trust, security concerns, etc.)
Delivery time potentially an issue
Additional thoughts…
Online Media Online Shop
Offline Media Offline Shop
Big Data
O2O marketing → O2O2O marketing
Conclusion
O2O as strategy to prevent physical stores from becoming “showrooms”
Utilization of technology tools and big data
Win-win situation
Thank you!!
Bibliography• Internet Live Stats. (n.d.). Internet Users. Retrieved on May 11, 2014, from
http://www.internetlivestats.com/internet-users/• Heggestuen, J. (2003). One In Every 5 People In The World Own A Smartphone, One In Every 17 Own A Tablet.
Business Insider. Retrieved on May 11, 2014, from http://www.businessinsider.com/smartphone-and-tablet-penetration-2013-10#!INJd0
• Kilroy, D. (2014). The Growth of Social Media in 2014: 40+ Surprising Stats [Infographic]. Retrieved on May 11, 2014, from http://www.sociallystacked.com/2014/01/the-growth-of-social-media-in-2014-40-surprising-stats-infographic/#sthash.GC8qko9t.dpbs
• P. Kotler & K. Keller. (2012). Marketing Management. Prentice Hall.• Microwave. (2012). 来店促進だけでなく「購買」促進に繋げるサービスとは?O2Oの新たな動向を探る . [Services that encourage not only visits to stores but encourage purchasing. A look into new O2O movements]. Retrieved on June 15, 2014, from http://www.micro-wave.net/column/digital_marketing/o2o.php
• EC-Orange. (2003). O2O型サービス・プロモーション・キャンペーン事例まとめ51選 . [51 Examples of O2O Service Promotion Campaigns]. Retrieved on June 15, 2014, from http://ec-cube.ec-orange.jp/blogs/?p=3809
• Kuttner, Robert. (1998). The Net: A Market Too Perfect for Profits. BusinessWeek. Retrieved on June 15, 2014, from http://www.businessweek.com/stories/1998-05-10/the-net-a-market-too-perfect-for-profits
• Current, Inc. (2013). カレン、薬局・ドラッグストア向けO2Oパッケージソリューションの提供を開始[Current Begins Offering of O2O Package Solutions for Drugstores]. Retrieved on June 15, 2014, http://www.current.co.jp/news/20130627.html
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