marketingstrategy

O2O: Bridging the Gap for the Online-to-Offline Consumer Experience

July 2, 2019 Loyalty6 Minutes

As e-commerce becomes more prevalent year-over-year, online and brick & mortar stores (and even DTCs) are scrambling for consumer attention. At the same time, demands for extraordinary experiences grow from both a digital and a physical retail point of view, but from the consumer perspective and certainly from the brand perspective, there is a struggle between the two worlds when it comes to how they work together.

Enter O2O: Online-to-Offline commerce.

O2O is a business strategy designed to bring online customers to brick & mortar locations, as well as create a seamless digital experience before, during, and after their purchases.

Many factors conspired together to create the need for an O2O strategy, but the most important one is that consumers see desktop-mobile-physical shopping and buying as fluid while many companies and brands distinguish them, set attribution targets for each, train and incentivize employees in silos, and make it hard to share data between digital and physical interactions.

The positive spin and the core of O2O strategy? More touchpoints and more opportunities.

Gone are the days of warehouse shelving and big brown boxes stuffed with peanuts and bubble wrap–consumers are driving expectations higher while asking for eco alternatives and at-my-fingertips convenience all at the same time and from every step of the buyer journey.

According to a December 2018 Shopify article, “Every brand wants to capture its market in totality, to reach customers new and old through mediums on-site and off. Today if your company doesn’t have a multi-channel marketing strategy…good luck keeping up.”

This means providing online, brick & mortar, catalog, mobile, and social options in unison. The article also explains that, on average, multi-channel marketing and selling increases revenue by 38%, 120%, 190% with each additional channel respectively.

This kind of growth is considerable and needed in today’s retail climate. However, one area that still gets left unnoticed is how one bridges the online/on-site gap.

Typically, businesses offer consumers choices: they can buy online and have it delivered, or they can go to a store and make a purchase. But what about those who research online and then go to the store to make their purchase? What happens when they order a product and want to pick it up in-store? More so, how do businesses convince consumers to buy online and pick up in store to not only create a more well-rounded shopping experience but to also create their own unique experience and brand-in-hand experience? What is the incentive for consumers to do both?

The answer lies in the conversation that already surrounds O2O. The known benefits of O2O commerce allow businesses to treat online and offline channels as complementary rather than competitive.

O2O Provides Opportunities for:

Rapid in-Store pickup of products purchased online
Online purchase of products while at a physical store (quantity, size, color variations and more vs a lost sale)
Physical store returns & exchanges for online purchases
Additional incentives and well-rounded shopping experiences when customers combine online and offline purchases
A combination of online tracking to offer personalized shopping experiences while consumers are actively shopping
New opportunities for trial and loyalty program engagement.

Research shows that many customers still want to have shopping experiences that allow them to have tangible interactions with the products they want to buy, but they don’t want to give up their technology.

In a recent study by CBRE Group, discovered that even younger people prefer an in-store, tangible shopping experience. The survey showed that 70% of millennials prefer shopping in stores, even though they spend an average of 7.5 hours a day online. This is one of the top reasons some 22+ beloved “DTC Only” brands have all opened physical spaces beyond temporary pop-ups (including Bonobos, Glossier, Aday, Everlane…and more)

However, despite the need for online and on-site stores to be interchangeable, there is still work to be done, but we are seeing considerable progress with how the two are working together in more efficient, collaborative ways. Nordstrom, Warby Parker, and Allbirds are all examples of companies who have their finger on the pulse of O2O strategy, and they see returns on investment for their efforts. We believe this competitive advantage will only increase over time.

The bottom line is that the buzz around O2O is getting louder, which means e-commerce, retail, packaging, marketing strategies, and on-site touchpoints are essential to address holistically–they can no longer be separated or standalone.

To learn more about how Vivabox can help connect your offline and online experiences using trial & loyalty kits, white label customer care, and more reach out any time! info@vivaboxsolutions.com

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by Maggie Tessier

It’s Not Medieval; It’s a Renaissance: Why Retail Isn’t Dead

May 17, 2019 Loyalty5 Minutes

marketingstrategy

We hear it quite a bit these days: online shopping is killing brick and mortar retail. It’s only a matter of time before it runs traditional stores out of business. Malls are drying up, stores we all grew up with are going out of business, and comparison shopping with the swipe of a finger on a digital screen has customers leaving stores without a purchase because they can buy it online, or somewhere else, for less.

As of the last quarter of 2018, e-commerce sales account for just 9.9% of overall retail sales in the US. That means 90.1% of all purchases are still being made in physical stores. The increase in online sales is growing, which creates a digital disruption of brick-and-mortar, but retail is far from dead and buried. To remain competitive in today’s mobile-fueled marketplace, retailers need to pay closer attention to market demand and conform their stores to changing consumer habits. Better yet, set a new standard for shopping and buying.

Despite the gloomy forecasts of retail, consumers still enjoy the instant gratification that comes from buying products in person instead of waiting for delivery (even if it’s only a day or a few hours). They enjoy the experience of shopping–not necessarily the simple act of purchasing. Those are two different emotions and should be catered to separately. They love a clever, or attractive, package that they can hold and inspect which might offer a spark of wonder and intrigue — all before they buy. They love a curated box that speaks to their inner “foodie” or “self-care” opportunity.

They want to explore new products and brands to break out of the same-old experiences they are used to. They want products (and services) that make them feel catered to and special. Even those on tight budgets love a little luxury that comes with experiential, adventurous shopping. They want beautiful environments with lovely smells, soft items to “pet,” and products with a wow factor (for themselves and others).

Moreover, the products consumers buy from retail stores are not just items they may need or want, but these items are also like souvenirs they bring home from the stores they frequent. I have been in eye-catching stores with beautiful set-ups and soft lighting, and I found myself wanting to buy something, even if it is a small item because I wanted to take a piece of that experience home with me.

As long as retailers are differentiating themselves on unique products and more remarkable shopping experiences (including exceptional customer service, BOPIS services, vibrant environments, and corresponding digital channels that pair well with their stores), it is easy to recognize that physical retail isn’t dead at all. The atmosphere is quite robust for stores that listen to consumer demands and think like consumers, not like legacy retailers.

Stop into Hudson Yards in NYC for a view into experimental retail spaces — touchable art, IG-friendly stores (Atelier Cologne), food halls and unique food stops (David Chang’s Fuku), landmark experiences (The Vessel), boutique coffee (Blue Bottle), stores that offer self- or assisted-checkout (Stance, Dirty Lemon), alongside a family-friendly sweets-and-games experience from Snark Park — all as ways to bring stickiness (borrowing from digital here) to an environment. And it’s working. Try not to feel wowed when you walk in.

Apocalyptic retail forecasts are only accurate for companies that continue down the “one-size-fits-all” branding and dull store experiences where products are stacked on shelves to get lost in the clutter. There is significant opportunity to take advantage of the 50% year-over-year growth that still exists in physical retail–it just has to be different than what has been done in the past.

Learn more about how Vivabox can curate exploratory, experiential packaging for your products to meet current consumer demands and offer your company better options and fresh SKUs for growth in the changing retail landscape.