90% of Sales Still Occur In-Store, So You Need to Up Your Online-to-Offline (O2O) Game
by Jon Carder
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Jul 31, 2018 1:09:19 PM / by Jon Carder
We know that 90% of retail purchases in the U.S. still happen in brick-and-mortar stores, and projections keep this number at 82.5% as late as 2021. This is true even as digital retail giants like Amazon take over more and more of our shopping habits. For you, online revenue will pale in comparison to the people walking through your doors looking to buy - especially when you consider that $3.9 TRILLION dollars are still spent offline, compared to $294 billion online. So, your marketing efforts need to support that online-to-offline (O2O) transition.
Your digital marketing initiatives should continue to push people into your stores for their shopping. If you’re not tracking that data or optimizing your campaigns for the O2O purchases, you could be missing out on plenty of opportunity.
Online-to-offline, or O2O, commerce is a new name for a business strategy that is almost as old as the modern Internet. Its aim is to find potential customers online and then drive them to a physical store to make a purchase.
You can't ignore the omnichannel nature of online-to-offline commerce. One important aspect of O2O is that most sales will have a sizable number of digital touchpoints, regardless of channel. Think about your own shopping habits and the way you interact with ads. These interactions probably include:
Successful O2O efforts focus on both driving customers to your retail locations as well as building a seamless, enjoyable experience via your online and offline customer service interactions.
Your customers still like buying things in your store, so O2O can be a smart way to drive them to their nearest location. This is even true for Millennials, 70% of which prefer to shop in stores even though they spend 7.5 hours online each day.
That’s why tapping into the O2O experience is so imperative.
If you have a strong digital presence and experience that offers potential customers incentive to choose your store over the next (like a 5% cashback offer), then you can stand out miles ahead of the competition.
Why? Because you’re offering your customers something irresistible (5% cashback) in the place they spend their time (online) for the place they like to shop (offline).
So, if you’ve got a digital experience, you can drive people to shelves, not just locations.
There are many different examples of O2O floating around the business space. We wanted to look at just one that’ll soon be impacting 1,000 local markets in the U.S.
Target is expanding its “Drive Up” service where customers order online or via the app, and then employees bring purchases out to their car. It’s expected to reach 1,000 locations by the end of the year. The big customer service win is that the app alerts users when the order is ready, so the brand is proactively working on minimizing wait time.
The company said its beta testing in the Twin Cities yielded roughly a 10% increase in orders.
It can be hard to figure out the best way to link your online ads, store, and social to physical retail locations. You might be tempted to highlight in-store-only specials or simply make in-store pickup, so customers save on shipping and get their orders sooner.
O2O provides plenty of additional opportunities, so we’ll wrap up this article with four of our favorite.
Early O2O revolved around QR code technology. Today you can use the same technology in your store to provide additional information to shoppers. Consider adding QR codes to shelf-level pricing information to give customers access to reviews, size charts, and more.
It allows your in-store shoppers to find value from your online channels and can improve satisfaction.
One easy and proven option is to use Empyr’s leading card-linking services for these in-store opportunities. Online shoppers and browsers see an offer on their favorite apps and sites to link a card to specific offer - like 5% cash-back on a purchase your store. When they make an in-store purchase with that card, they get their reward.
It’s simple and automated so they don’t need to remember coupon codes, print anything out, or get home and become frustrated after realizing they missed the best deal. No hoops, just savings for them and an increase in sales and customer data for you.
The process all comes back to using data to entice customers, and we know it works. About half of retailers say these card-linked programs will help bring customers back.
You’ve got two angles to personalization that improve sales based on customer data: chosen customization and special offers.
If you have products that someone can personalize to their own tastes, put as much of that online as possible. Whether it’s a message for a cake, color options for shoes, adding gift wrapping, or something similar, online capabilities make purchasing easier.
The second aspect is using your app or beacon technology to send a personal note to a known customer when they enter your store. Today’s tech makes it possible to deliver these targeted notes when someone with your app installed on their phone walks into your store or fires up a mobile browser after having visited you in the past.
Tailoring these messages based on user preferences can maximize your sales potential. The marketing is moving toward coupling this idea with Card-Linked Offers (CLO) - creating a seamless, customized rewards opportunity.
Provide in-store pickup at a designated location in each store. Stock this area with small, easy-to-buy goodies to help increase the chance of an impulse purchase.
If you’re able to control these elements across every location, you can further entice upsells by including a coupon with the digital receipt. That way, when your customer gets to the store and has to show their order information, they see your coupon/advertisement and the product itself at the same time.
You can discover more about card-linking for O2O campaigns, improving rewards, and your ability to use customer data, by contacting us here.