o2o - the future of retail

O2O: The Future of Retail Creating a true omni-channel customer experience

Prepared by Kevin HuangFeb 6, 2016

What is O2O?

Retail 1.0Birth of modern retail – 1900 ~ 1961

Retail 2.0Age of hypermarkets – 1962 ~ 1994

Retail 3.0eCommerce era – 1995 ~

Transformation of the retail business model

Product centric & one way experience

ShopperNeed Research Shop/Buy Collect/

Deliver Service Re-buy

Call Center/CustomerService

Offline WithOnlineIntegration

Offline

Social

Online Shop/Mobile

Print/Website

Browse Product info

SearchRead reviews

Check with friends

Queryspecification

Inspectproducts

Buy online

Check order

Pick up at store/Home delivery

QueryInstallation instructions

Write review

Checknew products/

features

Buy again

Your customers now live in an increasinglyomni-channel and social world… do you?

Buy at store

Source: http://goo.gl/x22ckt

A survey conducted by Accenture reveals that more than 88% of potential buyers would browse for the product online and then purchase it from a physical store.

O2O is all about driving customers from thatonline screen to offline experiences

Retail 4.0Customer centric & connected experience

Why should you care about O2O?

O2O business model

The goal for O2O is to blur the frontiers of all channels to create a seamless customer experience for a maximum conversion rate, regardless of where users make the final purchase. In other words, O2O aims to unify all channels into a single omni-channel.

O2O to enhance Customer ExperienceIkea's mobile app shows you real-time store stocks and gives users the

option to create a shopping list that can be printed and brought to the store. The app also has the shopping list function too and indicates where to pick

up your products and tick products you have collected already.

Multi-channel vs Omni-channel marketing

Multichannel is about putting customers at the heart of everything we do.

Omni-channel is an evolution of multichannel and is very much about making it consistent and giving a consistent experience for customers across channels.

Why is omni-channel important?••

Every customer is a point of buying

Source: McKinsey

Omni-channel: for customers

Single view of the retailer across all channels

Store TVE-Commerce

Social media sites

Returns anywhere

Fulfillmentanywhere

Mobile commerce

mPOS

Kiosk

Same price everywhere

Single view of the customer

Single view of data

Inventory Products & pricesPOSStore

E-CommerceSocial media sites Supply

chain

Mobile commerce Call

center

Sales & marketing

Personal info

Shopping preferences

Purchase frequency

Purchase historyLikes & dislikesLoyalty rewards

&Omni-channel: for retailers

Mobile is the new retail hub

Source: http://goo.gl/x22ckt

The impact of digital on various retail measuresof success

Omni-channel ExamplesMacy’s

• Check the availability of product in physical store

• Book an appointment for exclusive advices

• Coupons available online & in-store

Online Experience

• Pick up a product ordered online• Return a product ordered online• Scan barcodes and QR codes for

more information about products or promotions

• Use the mobile application in store for deals and promotions

• Use tablets in store to check availability of products (with sales staff)

In-store Experience

Omni-channel ExamplesCartwheel by Target

• Target is partnering with Facebook

• Offering deals that customers can only redeem in stores on their mobile devices

• Strategy is to get smartphone-carrying customers to visit and purchase in bricks and mortar Target stores

• Response to showrooming

Omni-channel ExamplesNordstrom

• New stores equipped with mobile point of sales devices

• Top salespeople given iPhones to contact customers

• Significant investments in IT to ensure online experience matches in-store experience

• Company has integrated inventory and fulfillment for stores, the internet, and mobile devices

Omni-channel ExamplesStarbucks• Disciplined, consistent approach to

Starbucks brand across all channels• Leveraged robust IT platforms to launch

new loyalty program• Loyalty program users can join the

program and also make purchases using their phones

• Now coffee can be purchased directly with a smartphone

• Customers have the option of checking and reloading their Starbucks card balance through their phone, the Starbucks website, or when they’re at the store.

Omni-channel ExamplesSephora• Sephora makes it easy for its loyal customers

to manage their “loved” products and purchase history from any device through its “My Beauty Bag” program.

• Sephora’s Beauty Insiders (i.e. members of its reward program) can use their Beauty Bag on their phone or on their computer to view and track their purchases and rewards. They can add items to their shopping list, view their buying history, save items for future purchases, and easily re-order items.

• Shopping is a breeze with the ability for users to purchase products right from the app itself. Alternatively, when they’re in the store, they can use Sephora’s app to access their shopping list to complement their in-store experience.

Experience Matters

Key enablers

Consider these three steps when starting omni-channel marketing

Step one: Find Your DMPWith an omni-channel approach, a data management platform is a must-have for retailers. A data management platform (DMP) collects, manages, processes, analyzes, organizes and activates data. There are plenty of DMPs available to marketers, so choosing the right platform is imperative to your omni-channel success.There are a few important qualities you may want to consider when choosing your DMP. Businesses should consider how the platform integrates 1st and 3rd party data, how the platform can be utilized, the platform’s cross-channel management abilities, and how easy the platform is to use.Finding the right DMP can help businesses create a much more comprehensive, 360-degree profile of their customers, a key foundation for marketing personalization.

Step two: Develop ContentThe key to a seamless, omni-channel experience lies within the content of the marketing messages that customers receive. Although consumers are receiving messages on different platforms, the messages must be unified and consistent with one another. All messages directed to customers must reflect products and ideas of the overarching marketing campaign.Developing consistent messaging can be a stumbling block for some businesses. When faced with the dilemma of message uniformity and also personalizing content, marketers often decide to just “batch and blast” generic campaigns across the board. However, with carefully planned strategy and new technology, businesses can combine uniformity and 1:1 personalized marketing with much less effort and spend compared with several years ago.DMPS and automation platforms can help pull in data from customers so that the right bits of content can be used in messaging, whether it be product offers, copy and language, or design.

Step three: Consider all ChannelsThere are a variety of other channels that retailers should be taking advantage of for optimal coverage.As the millennial generation becomes the primary target for retailers, companies must adjust their omni-channel strategies accordingly. Raised in an era that incorporates technology into everything, millennials are naturally tech-savvy. Their familiarity with technology will likely influence marketing strategies. Almost three-fourths of today’s consumers believe digital technologies will transform the way businesses use their channels to interact with customers.Therefore, marketers should be able to access these customers through more, nontraditional channels. This opens more doors for businesses willing to market through social media, apps or SMS. Businesses that are unwilling to embrace new technologies will be left behind.

Appendix

Retail stores aren't dead yet

Apple’s two New York stores

State-of-the-Art –Defined ! Fifth Avenue store Grand Central store

Microsoft’s flagship New York store

Opened on Oct 26, 2015, this retail store is one of Microsoft’s 110+ outlets across the U.S., Canada, and Puerto Rico, but the New York store is its first two-story incarnation and is the company’s largest in the world.

Samsung’s Experience Shop at Best Buy

The world's first ‘Google Shop’

Google is selling Android phones, Chromebook laptops, and Chromecast TV service through site at Currys PC World store in London

Amazon’s pop up shops

Westfield Galleria at RosevilleWestfield Valley Fair at Santa Clara

Left: Seattle, Washington - Nov 2015: Amazon opened its first real life brick and mortar bookstore called Amazon Books in Seattle's University Village.

Above: Amazon Pickup Point: UC Berkeley

Showrooming trends

comScore reported that in April 2014, 35% of US internet users showroomed, including nearly half of millennials and even 28% of seniors 65 and older. In a more recent Q3 2014 survey, comScore found that 44% of smartphone owners said they participated in showrooming.

How to Deal With Showroomers?

Source: RIS News Custom Research “Omnichannel Readiness”, Oct 2013

How to Deal With Showroomers?

Source: Capgemini Consulting “Digital Shopper Relevancy” July, 2012

The 2 Core Components of O2O

•••

Beacons are able to interact with customers as they move through the store. Providing them with an experience that is tailored to them.