How to Conquer Online-to-Offline Retail Opportunity?
When I shop, I expect convenient, fast, and efficient customer experience. Usually, I know what I want, grab it, and go out. But the recent experience in the local department store proved that digitalization is far from the offline world for now.
All I wanted is a bottle of water. Upon entering the store, the first challenge was to get to the needed department. Another uneasy task was to find an associate. It took us 15 minutes to reach the right section on the opposite side of the store.
Once I grabbed the bottle, I went to the nearest cashier and got in line. Frankly, the worst scenario of my Saturday evening is to spend in a long queue. Another 15 minutes passed as they were trying to figure out payment issues. Time to change the cashier.
A new line, moving faster, though. In general, I got my bottle of water after 45 minutes in the store.
“Consumers are demanding the excitement and personal engagement they get online when they shop in stores.” — says the IBM Customer Experience Index Study (2017).
The growth of online commerce seems to restrain brick-and-mortar shopping experiences, and the future of retail is bound to conquer the Internet. But no other industry is so impacted by the dynamic changes in customer demand as retail. We want easy, fast, and 24/7 shopping, be it online or offline store.
The fact that many offline stores aren`t prepared to fulfill the increasing consumer expectations is evident. IBM proves it with the numbers: nearly 88% of the in-store retailers don`t develop a customer engagement strategy. However, some great examples demonstrate how online trade has already impacted the brick-and-mortar retail. Here, I will discuss some of the digital approaches to offline shopping transformation.
The Rise of Online-to-Offline Marketing
You might have heard about the so-called “omnichannel” approach. Today, both offline and online markets merge to acknowledge the customer once they enter the store. And that`s not about the mouse-click-purchase or modernized store — it`s about all of those in one.
This approach is nearly 2–3 years old, and the most famous cases have already become a background for the analysis. Such global businesses as Zara or Matahari.Store.com enabled the customers to purchase online and pick the items at the convenient delivery hub. Besides, e-commerce giants like Amazon, Alibaba launched physical stores along with the online product description improvement. That helps customers better evaluate product quality and increase confidence in making purchase decisions.
A winning example is Alibaba`s Hema, a fine-dining supermarket chain that gained popularity in China. The business combines a supermarket, a restaurant, and retail. Enter the store with the smartphone in hand, select items, and if you live in a 3-mile radius, have them delivered within approx. 30 minutes. No wonder that the real-estate near Hema has become the desired place for the Chinese to live :)
Solutions as such gave birth to a new customer-type: the one who is used to a traditional storefront but enjoys digital convenience of easy & quick payment process and fast shipping. Omnichannel commerce is a way-out for start-ups and well-established brands to meet customer demands.
How businesses optimize O2O?
When Amazon acquired Whole Foods in 2017, the O2O idea exploded the market. Although consumers are confident online buyers, Shopify says that physical stores will remain the source for 82,5 % of retail sales by 2021. O2O commerce reaches the customers at all touchpoints to drive both engagement and sales. It enables companies to conduct a complementary online & offline strategy instead of having them separated.
Let`s have a look at the ways the business can optimize both marketing approaches:
Make digital experiences live offline
Consumer demand for convenience is never-ending. Thank such services as Uber and Alibaba, we have the chance to avoid the experience I had when buying a bottle of water. Click-and-collect shopping is the biggest trend of today for more than 70% of customers who`d like to purchase online and take the items at the nearest delivery hub. Such approach encourages visits to the physical store and might positively impact the impulsive purchase rate.
Embrace the Technology
Yes, that`s about AI and Augmented Reality solutions. Technologies like these allow your visitors testing digital products right in the store. Magnolia Market granted the visitors with the unique interactive experience with the iPhone app to check the way housing facilities would look in a real-time setting.
AR is one of the e-commerce trends to have users engaged even if a physical store is not your priority. Data from CNBC estimates 40% of online purchases are returned since the items customers get don`t meet their expectations. That means users are challenged by the poor product description. Instead of struggling with the “realistic” storytelling, an effective business idea would be introducing an AR-based extension to the online shop. Just like Magento & Phoenix Media did. A 3D-model extension launch is getting popular among those busy with home design.
Unite Smartphone & PWA
Forrester reports that mobile phone use drives $1 trillion of offline purchases. A smartphone will never become a just-to-make-a-call device. Today, it is your personal assistant to fulfill routine tasks. And this is the feature that makes a smartphone a dominant force in the area of retail.
AliExpress is a great example of a company following the latest trends in the mobile industry. Since the team clearly established the difference between the desktop and smartphone use, they managed to adapt their services for the small-screen phones. This was the smartest decision in 2011 to improve shopping experiences for those who sell and for the people who buy. Their progress didn`t stop, however. As soon as AliExpress introduced the Progressive Web App version, mobile commerce has become even more dynamic. Google estimates the business facing a twofold new-user conversion rate, while user-session shot up 74%.
“One of the reasons we built a PWA was to be able to invest in the web experience across all browsers. This is a sign of a great investment and will continue to pay for itself as browsers evolve.”
Lijun Chen, AliExpress mobile team lead.
Shift to PWA is a recent trend for the businesses to ensure users app-like interaction with the website and stay connected even in an offline mode. In search of the innovative approaches to improve SEO analytics, PWA technology might add value to your goals.
Final thought
The revolution of retail progresses along with technology growth. Adopting new digital approaches makes tech-savvy visitors engage in offline shopping and diversify their experiences. As customer expectations continue to rise, I think we might expect more and more retailers opting for the O2O commerce in the nearest years.
