While online retail is catching up fast, it still holds a minuscule percentage of the total retail sales – online and offline. If experts are to be believed, even if e-retail is growing at a steady pace, offline retail will still hold about 82% of the market share by 2021, especially in the retail industry. The reason may be perplexing, but it could be mainly because most customers still feel comfortable buying a product after having a close look-and-feel of the item. We have a natural knack of trusting what we see – in the physical store, buyers can feel the items upfront with their vital sense organs like the eyes and the skin making the key difference.
Offline-to-online or online-to-offline business (O2O)
The phrase means that potential customers in the online digital world are tempted by brands in a way that they reach the brick-and-mortar stores of the brand to make a purchase. So, a customer who sees an online ad for a product or reads about it in social media is motivated to check the item out at the physical store and then buy it.
The term also includes the concept of customers at physical stores being impressed upon by point-of-sale marketing efforts to go online and buy a product. Many organizations do so by running discounted offers online to pull their customers into their e-commerce stores for purchase. This seems to have a positive impact on the buying behavior of the customers.
Benefits of this model
Most credible brands today are adopting this model to derive cost-effective results.
- The online and offline models of the business complement each other than behaving as two separate strategic business units, retail companies can now blend both the channels to derive maximum benefit. The O2O model operates from the online to the offline world and vice versa. While brand and product/service awareness are created online, conversions are made in the physical store.
- Increases customer interaction points from the online world to the offline world, adopting this model allows the brand to interact with potential and loyal customers at different points. This enhances the brand image giving enough chances for the company to engage and connect with its prospective customer base.
- Enables brands to take advantage of the marketing tools of both the mediums certain marketing and promotional tools work fine in the stores, others work great online. Brands can now brainstorm and decide on an effective marketing mix, combining the best features from both the world. From strategizing your website and e-store for search engines to using social media, marketers can promote, create stories, weave brand narrations, etc. online to impress the customer. At physical stores, window displays, freebies, discounts, cashback offers can be advertised to encourage people to purchase online.
- . Helps coordinate support services and provide seamless customer experience is true in case customers wish to return products bought. While products bought at the physical stores can be returned at the retail outlet itself, adopting this model allows customers to return products online at a physical store. This way, brands open an unlimited and unrestricted customer channel where experiences are delivered smoothly and seamlessly.
It is true that companies – big or small – can no longer afford to ignore either the physical or the online channels. Both are important and both have their pros. Rather than making them competitors, it is best to use them as support services to one another. Research in this field shows that though the young millennial crowd of today are never without their smartphones and are always online. Still, almost 70% of the crowd prefers to go to a brick-and-mortar store for a purchase rather than buy online. Hence, brands need to gear up, follow up the offline-to-online model and use both the channels to get the biggest pie in the market share.
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