O2O – Online to Offline Business

It is said that Online to Offline (O2O) business would be the future as its a trillion dollar opportunity. its estimated that only 9% people buy in online mode, while remaining are purchasing in offline mode.  There are 2 challenges here.

1. The retail business can’t survive on the Offline business model alone and they have to come to Digital side of the business with their online presence as this helps to spread the news and connect to new customers.
2. At the same time, the second problem is there are many businesses are suffering at the hands of eCommerce companies who charge a bomb to sell your product online. Many eCommerce platform charges a commission from 8% to 25% for selling a product. In a competitive market with many items are returned, your profit margins are vapoured in commerce sales.

So how a Retail or Trader or Mom & Pop business can survive the onslaught by Amazon, Alibaba etc?

They have to be innovative. The old traditional Sales model is changed to O2O model and this could help to sell more products. Now Traders can sell in Online and also in Offline mode.

During the last 2 years there is a change in the way business is done. Many Retail business are not able to compete against the Online eCommerce business who doesn’t have any Overheads of space or rental etc. Traditional retailers are worried on the growth of the ecommerce companies and they don’t know what to do.

But the scenario is changing. Now traditional retailers are looking at an option of “Online to Offline (O2O) business” model and few who adopted are seeing the cashflow into the company.

Even Amazon couldn’t avoid this and bought Whole Foods and slowly moving towards Brick and Mortar Business. Its “Amazon Go” is towards the same model to achieve excellence in Online and Offline sales.

Because the truth is eCommernce cant replace the traditional business model. Today more than 90% of Business to Customers (B2C) or Business to Business (B2B) are happening out of the ecommerce purview. So to survive and grow the business we need to move to O2O model.

Online to Offline (O2O) business – Advantages

Back in 2000, the focus was creating awareness in people, who could come to Brick and Mortar Stores. So the idea was to find them in Online world and make them purchase at offline stores.

Now few of the traditional retailers realised the value of “Online to Offline” and are growing fast.

O2O means “Online to Offline” business model. This is a new business model that’s been adopted by many. Today to survive in the market, we don’t have much option other than having physical and digital presence all the time 24×7. So brick and mortar business are happy to adapt O2O model.

Using online sales techniques including SEO, Digital marketing, Contents etc. gives a branding and visibility to Brick and Mortar business. eMail marketing with discount coupons are the best way to attract customers to come and visit their premises.

One of the major advantages is the “Long Tail effect”. Many times, we have a specialized product, but not able to reach out to many due to our location and market reach. Digital Marketing with eMail marketing has broken this challenge. This ensures to reach to many long distance customers, who are not aware of you. Now suddenly they see a value additional service or product.

With smaller budgets and less time, retailers can reach more customers than those would ever come across their brick and mortar shops. Moreover, based on the online profiling, we could have targeted them with right product and features that’s impossible to do in the traditional marketing.

Online to Offline Business Benefits

1. Reach out to many customers at one go with less budgets and time. “Long tail effect”.
2. Improve the brand image as we have the option to send beautiful product catalogue with details at very less price. No need to send the snail mail that costs a bomb.
3. Time to market is low and connecting to new customers is fast.
4. It improves brand reputation and increases the Business visibility – Now you are in Facebook, Instagram, Social media, eMail marketing etc
5. Once the brand is built, customer loyalty increases, as the Traditional retail stores are good at personal customer services. This is plus for the brick and mortar business. So the revenue is more.
6. Many customers use the online features to learn more about the product. Once they do their research, then they decide to buy from their known companies whom they trust. So the digital marketing helps Online 2 offline business to work and flourish immediately.

So Online to Offline business (O2O) is the new business model that could help Traders to make more money, reach to many customers and gain the trust.

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