O2O, A Revolution Led by China

Western countries have always led innovation in retail. Today China is leading with Alibaba being ranked second world’s most valuable retail brand in 2016. To understand the state China consumption, we can look at the 10.6 % YoY increase of the consumer trade revenue (August 2016). This opportunity is leading to a lot of competition. It is forcing prominent actors to create a unique shopping experience. The critical objective is when the consumer doesn’t feel any friction during his journey. Furthermore, the environment offered by the government optimise opportunities and exploration. This is when O2O appears, to expand the shopper’s experience.

O2O commerce is a business strategy that draws potential customers from online channels to physical stores. Online-to-offline commerce identifies customers in the online space such as through emails and internet advertising. O2O then uses a variety of tools and approaches to entice the customer to leave the online area. This type of strategy incorporates techniques used in online marketing with those used in brick-and-mortar marketing.

In the latest news, Alibaba Group Holding offered 2.6 billion dollars to acquire Intime Retail Group. By doing so, they are accessing to 29 Megastores and 17 malls all over the country. This investment could give Alibaba the chance of digitising that physical store. Also, they will offer consumer and brands more natural ways of consuming in an Offline to Online full and Online to Offline experience.

« In the coming years, we anticipate the birth of a re-imagined retail industry driven by the integration of online, offline, logistics and data across a single value chain. With e-commerce itself rapidly becoming a ‘traditional business,’ pure e-commerce players will soon face tremendous challenges. » – Jack Ma

Digitizing of commerce is growing and offers excellent opportunities for brands and retailers. O2O strategy development is the right answer to the e-commerce growth, 30% in 2015. Also, in 2015 we can highlight the fact that offline research still had a significant share in informing before buying. Furthermore, the unification of data collecting in O2O is essential in a market where consumers switch channels.

Here are a few existing solutions to cross online and offline behaviours:

M-payment:

China Boasts World's Largest Proximity Mobile Payments Market O2O

China Boasts World’s Largest Proximity Mobile Payments Market

Such as Alipay responsible of 68%(*) of m-payment transactions. It allows the consumer to pay without contact in real life. Simplifying the way of consumption and help monitor consumer spendings. Additionally, it creates a direct connection with the consumer.It gives the opportunity for the brand to contact the consumer by offering him promotions. For more information

Interactive Display solution:

Interactive display solution O2O

Today, product description printed on a simple cardboard are obsolete. Interactive display solutions are going mainstream. Providing full information on the product, the possibility of sharing to a friend for approval or even ask for delivery. This solution offers the endless opportunity to stay in contact in and out stores. Principal display actors such as Samsung is proposing tools to ease the tradition. By adding these « interactive sales device » to shops, the experience is enhancing in a blink.

iBeacons:

eBeacon O2O  

These in-store detectors send a push notification when a customer pass by or enter the store. To address these announcements, the clients need to activate his Bluetooth. As well, the rise of wearable and the inevitable disappearance of a connected cable device like the last iPhone or the future Samsung. This notification allows the shops and brands to send promotion. Event advertising at the moment where the consumer is the nearest from stores is also possible.

Electric Vehicle stations:

EV Charging station O2O

Electric vehicles market is rising with an estimated increase sales of 188% for June 2016. Recharging stations outside the store are giving a massive amount of information on consumer behaviour. This is going to help brands push sales towards users directly in the car and provide them with a unique sales experience.

In-store Wifi connection

Wifi in store O2O

Free Wifi in stores is a must have If you want to connect with your audience. Enabling your customer to sign in and link to your Wifi will help increase the experience of the shopper. Also, Wifi can be an entry point for marketing actions. Those actions may be addressed to customer in-store and even outside. Having some of their information, you could provide them with a more targeted offer and ask for feedback without being too intrusive.

Viral content

Viral content O2O

Boutique Louis XIII Beijing

To encourage social sharing and analyse consumers’ reaction to campaign viral content is critical. As we know the word to mouth is very important to ensure a good frequentation in store. When a shopper enters the store, the salespersons are as important as the product in the shop; but today to differentiate themselves shops need to integrate “happenings”, “viral content”. And with the rise of social media worldwide, everybody can add value or devalue a brand through pictures, comment or likes. Creating a viral campaign is understanding trends, creating a coherent creation.

Why is O2O winning in China?

59% of Chinese shoppers use their mobile device to check or compare prices in-store, and retailers understood it by integrating QR codes in their price tags or giving a free Wifi access in their store. Also, we can observe a two-speed Channel challenge, with offline starting to take an additional role as a complement to the online shopping experience. These reasons give an excellent base for O2O to develop and expand.

Whereas in western countries consumers still lack mobile usage during shopping with only 45% of all shopping includes usage of the phone says the last Facebook study. It also shows that 71% feels the transaction experience not yet satisfying, this could be an entry point for O2O enhancement.

Today O2O is a must have to increase and even maintain sales. Brands are going towards as it is estimated that O2O sales of service in China increased 38% in 2015 to RMB 335 billion ($53.78 billion). O2O is a tool to control the sales that come from online shopping or offline. By doing so, they target costumers and sell the right items in the right place.

 

 

 

 

By | 2018-01-15T06:07:22+08:00 January 19th, 2017|Categories: BAT, China, Retail|Tags: , , |Comments Off on O2O, A Revolution Led by China

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