Fast and Convenient

http://www.memphisitcouncil.com/about-us.html

Experience

http://gaijincamera.com/

What is O2O Marketing?

Online-to-offline marketing– a business model or a marketing

strategy that involves using online methods to encourage consumption or purchasing at offline physical businesses (e.g. actual stores or restaurants)

2 Main Processes of O2O

Drive consumers captured online to purchase products/services at offline presences

1. Attracting consumers using online methods, thereby directing them to offline physical businesses

2. Improving customer experience at offline physical businesses using online methods in order to encourage consumption or purchasing

History of O2O Marketing

• 1990s: Popularization of e-commerce and emergence of “bricks and clicks” model = business model that integrates online and offline marketing efforts

–However, number of internet users were relatively limited

Number of Internet Users Worldwide

History of O2O Marketing

• Mid to late 2000s: Spread of smartphones and social media

↓• Increasing number of consumers become able to

connect to the internet at virtually any time or location↓

• Integration of online and offline marketing efforts becomes virtually seamless

↓• Around 2010: Term “O2O” begins to be used

Global Device Penetration Per Capita

Percentage of All Internet Users that Use SNS

Number of registered users of major SNS’s

Impact of Technology on O2O Marketing

• Advance in technologies open doors to various opportunities– GPS (Global Positioning System) and other location-detecting

systems– QR (Quick Response) codes: a complex form of barcodes that

allow smartphone users to access information easily and quickly

– AR (Augmented Reality): allows users to combine real word images or videos with computer-generated information or imagery

– NFC (Near Field Communication): allows electronic devices in close proximity to exchange information in a wireless manner

etc.

Characteristics of O2O

The customer acquisition process takes place online

The customer often reveals his identity online

Product or service is delivered and/orconsumed offline

No geographical and time restrictions

Transactions and user behavior can be easily tracked

When to adopt O2O?

Average time customers wait for the receipt of goods

Waiting and delivery time

Relevance

✔✔✔

Degree to which the marketing channel makes it easy to purchase the product

Spatial convenience ✔✔✔

The assortment provided by the marketing channelProduct variety ✔✔✔

Add-on services provided by the channelService backup ✔✔

Number of units the channel permits a customer to purchase on one occasion

Lot size ✔

Push or pull?

O2O is actually both….

It is a pull strategy since promoting brand awareness makes customers actively seek services on that website, i.e. the customer requests the product and pulls it through the delivery channel

On the other hand, it’s a push strategy since O2O companies actively push information to the client through intense online and (sometimes) offline advertising

Categories of O2O models

Companies that adopt O2O O2O Service Providers

BMW car configuratorBuild-your-own car

What are the advantages for BMW?

More physical store traffic

Customer education (communication with the customer)

Customer involvement

Tracking user behavior

Retailers: Argos, Macys’

Omni-channel of macy’s

Seamless Experiences!

In 2012, Macy’s had total sales of $ 27.7billion which was 17.8% growth

Search and sendbeauty spotTabletsTrue FitCustomer Service

Retailers: Argos, Macys’

Seamless Experiences!

Avoid Stock-outCustomized and Fast ServiceSeamless shopping

O2O Service Provider

O2O Service Provider

http://pardonmycrumbs.blogspot.jp/2012/04/uber-las-affordable-life-changing.html

customized and use of technology tools

4P Analysis

Worth the priceMore information

Product Price

Place Promotion

Change how the products are experienced and sold: seamless purchase experience

Competitive Price

Big Data and E-CRM

Attention

Reach

Action

Share

Loyal

Kuttner (1998, p.20) “The Internet is a nearly perfect market because information is instantaneous and buyers can compare the offerings of sellers worldwide. The result is fierce price competition and vanishing brand loyalty. ”

E-CRM Attract customers to offline stores

E-mail

Coupon

Connect to EC

Data Base

Data Connection

Data Integration

Point Card

Point Card Data

POSData

Member Informationdigitalized

Offline customers

become membership

IC card reader

Big Data and E-CRM

E-CRM Attract customers to offline stores

E-mail

Coupon

Connect to EC

Data Base

Data Connection

Data Integration

Point Card

Point Card Data

POSData

Member Informationdigitalized

Offline customers

become membership

IC card reader

Big Data and E-CRM

E-CRM Attract customers to offline stores

E-mail

Coupon

Connect to EC

Data Base

Data Connection

Data Integration

Point Card

Point Card Data

POSData

Member Informationdigitalized

Offline customers

become membership

IC card reader

Big Data and E-CRM

E-CRM Attract customers to offline stores

E-mail

Coupon

Connect to EC

Data Base

Data Connection

Data Integration

Point Card

Point Card Data

POSData

Member Informationdigitalized

Offline customers

become membership

IC card reader

Big Data and E-CRM

Advantages for companies / service providers

Significantly lower cost compared to other channels of mass advertising (especially considering global reach of online services)

Purchasing behavior can be exactly tracked and analyzed

Ability to communicate directly with target audience

Pricing strategies can be better tailored to clients’ needs and hence result in higher profit

Possibly higher customer retention level

Disadvantages for companies / service providers

Total transparency on the web leads to intense price competition if product/service is not differentiated sufficiently

Leads to potential channel conflict if physical stores compete for same customers

Very low barriers to entry

Web reputation difficult to control

Infrastructure needs to be maintained and developed further constantly

Advantages and disadvantages for consumers

Ease of use (shop anywhere and anytime, easy payment); ‘best of both worlds’ as O2O combined the advantaged of both online and offline shopping experience

Transparency (price, information, customer feedback)

Immediate feedback / review system (generation feedback, user-generated content)

Advantages and disadvantages for consumers

Loss of anonymity

Privacy concerns with shopping data and behavior

Difficult to sell high priced goods or services over the net (lack of trust, security concerns, etc.)

Delivery time potentially an issue

Additional thoughts…

Online Media Online Shop

Offline Media Offline Shop

Big Data

O2O marketing → O2O2O marketing

Conclusion

O2O as strategy to prevent physical stores from becoming “showrooms”

Utilization of technology tools and big data

Win-win situation

Thank you!!

Bibliography• Internet Live Stats. (n.d.). Internet Users. Retrieved on May 11, 2014, from

http://www.internetlivestats.com/internet-users/• Heggestuen, J. (2003). One In Every 5 People In The World Own A Smartphone, One In Every 17 Own A Tablet.

Business Insider. Retrieved on May 11, 2014, from http://www.businessinsider.com/smartphone-and-tablet-penetration-2013-10#!INJd0

• Kilroy, D. (2014). The Growth of Social Media in 2014: 40+ Surprising Stats [Infographic]. Retrieved on May 11, 2014, from http://www.sociallystacked.com/2014/01/the-growth-of-social-media-in-2014-40-surprising-stats-infographic/#sthash.GC8qko9t.dpbs

• P. Kotler & K. Keller. (2012). Marketing Management. Prentice Hall.• Microwave. (2012). 来店促進だけでなく「購買」促進に繋げるサービスとは？O2Oの新たな動向を探る . [Services that encourage not only visits to stores but encourage purchasing. A look into new O2O movements]. Retrieved on June 15, 2014, from http://www.micro-wave.net/column/digital_marketing/o2o.php

• EC-Orange. (2003). O2O型サービス・プロモーション・キャンペーン事例まとめ51選 . [51 Examples of O2O Service Promotion Campaigns]. Retrieved on June 15, 2014, from http://ec-cube.ec-orange.jp/blogs/?p=3809

• Kuttner, Robert. (1998). The Net: A Market Too Perfect for Profits. BusinessWeek. Retrieved on June 15, 2014, from http://www.businessweek.com/stories/1998-05-10/the-net-a-market-too-perfect-for-profits

• Current, Inc. (2013). カレン、薬局・ドラッグストア向けO2Oパッケージソリューションの提供を開始[Current Begins Offering of O2O Package Solutions for Drugstores]. Retrieved on June 15, 2014, http://www.current.co.jp/news/20130627.html