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O2O Commerce: The Next Frontier of the Retail Shopping Experience

  • By Content Desk
  • May 1, 2019
  • 5 minutes read
Reading Time: 5 minutes

Digitization is shaking up almost every Industry, creating an opportunity like never before. However, the retail industry has been experiencing a significant force of digitalization compared to other industries. Clearly, online commerce is increasingly challenging traditional brick and mortar retail operations.

Shopping appears to have moved from traditional brick-and-mortar retail to digital channels like e-commerce. This is because the expectations of consumers at each stage of the buying journey – from pre-purchase research to post-purchase experience are changing. Nevertheless, the future for brick and mortar stores does not seem as depressing as it looks.

Despite this online hype, it is estimated that in 2020 about 80% of US retail sales will still happen in brick-and-mortar stores.

The value of the in-store experience clearly cannot be overlooked. Despite the conveniences of mobile shopping, there’s still no substitute for in-store shopping. The physical interaction with the product and experience of personalization in the form of a sales assistant is an unparalleled experience.

For example, the consumer barometer, showed that 60% of consumers in the UK were looking for purchasing cameras online – but a significant percentage of customers researching online made their final purchase in a store.

The in-store experience remains an integral part of the Retail Industry. However, its relationship with the buyer is clearly in a state of evolution.

Forward-thinking retailers have started to realize that instead of seeing online and in-store retail as different sectors of their business, both can work complementary to each other rather than competitively with each other. This way they can reach customers at all digital touchpoints to drive better sales and engagement.

Research shows that 82% of consumers use smartphones to look for more information about the product to support the purchasing decision they’re about to make in a store.

Therefore, the mobile, website, and other online marketing efforts can contribute to both the online and offline purchase decision. All are essential to get better ROI.

online vs instore

Customers expect to move fluidly between all channels available, both online and offline. Many digital-first brands like Alibaba, Amazon and Walmart have started to shift their focus from online to offline (O2O) commerce to create omnichannel and multichannel experiences around their customers.

Online to Offline (O2O) Commerce

Online to Offline (O2O) commerce is a relatively newer type of e-commerce strategy to draw customers from a digital channel online and drive them in-store to brick-and-mortar locations.

The rapid development of smartphones, technologies and ready access to the Internet unlocks new digital opportunities to engage customers with products, expands the in-store experience in a way that meets the personalized demand of customers, can drive sales, and enhance the reputation of the retailer’s brand.

The global Online to Offline Commerce market is expected to grow at a CAGR of 15.3% between 2019 and 2024

There are various digital technologies enabling O2O to prevail in the retail industry and allowing consumers to continue an online shopping trip offline in the store.

Click And Collect: Bringing Brick-Click Into Action

Click-and-collect is an effective O2O strategy to bring online customers to offline stores. According to Shopify, 70% of customers have been taking advantage of it to order items online and collect them in a nearby store at a time that is convenient for them. This simple technique fulfills the customer’s instant demand and gratification. It encourages more customers to visit physical stores and increases the chance of impulsive buys. 

Predictive Analysis – Fundamental Data Discovery

Monitoring and tracking customer preferences, demands and needs is a cumbersome process. Predictive analysis enables brands to analyze huge data sets through AI algorithms that can predict and recommend products and services relevant to the needs of customers. For example, the trend forecasting AI algorithm retrieves data from social media and purchase history to identify the preference of users which allows brands to drive high engagement. Similarly, sentiment analysis helps to uncover the context in which the product is discussed online i.e. positive, negative, or neutral.

Businesses can create a 360-degree view of the customer. They can then use those insights to deliver an enhanced customer experience, which probably leads to better retention rates and increased brand value.

Nike, for example, has its own Nike Plus membership program. It consists of massive data about their member’s preferences for clothes, shoes, and exercise habits. They use these data to curate stock at its Nike Live concept store and offer personalized advice to ensure that members have the best kit for their fitness goals.

omnichannel shopping experience
[Source: DHL]

Mobile First – Proximity Marketing

Mobile is one of the most important digital touchpoints to provide an integrated customer experience. Beacon technology helps retailers to meet customer needs and create a more cohesive online-to-in-store experience.

Beacons can facilitate retailers to welcome customers to the store, who have the app installed on their phones. It will offer various deals, rewards, discounts, and product recommendations as soon as they open the app while entering the store. Combined with a voice or text search function, this can be extremely helpful for speedy grab-and-go shopping. Cygnet Infotech developed a scalable Android and iOS mobile application integrated using Beacon technology with real-time in-house GPS tracking, continuous advertising, and push notifications enabled with geo-fencing.

Brands can also promote an in-store experience by engaging store visitors with instantly available mobile content right on their mobile phones using NFC tags or QR codes. This helps in converting store footfall into qualified e-commerce traffic. 

Immersive Technologies – Merge Real and Virtual Experience

Augmented Reality and Virtual Reality technologies have unique ways of increasing brand engagement and generating new ways to interact with customers.

For example, a mall in Hangzhou, China, has a smart ladies’ room that has been upgraded with new retail features. It has augmented reality enabled mirrors that allow you to try on new makeup colors virtually and order with only a few clicks. This example proves the potential of innovative technologies – taking the shopping experience and product trials to the next level.

Mobile POS: Flexible and Secure Payment

Long checkout lines can frustrate genuine buyers. Retailers can now allow customers to use their apps to scan and buy their products. For instance, allowing mobile payments using mPOS, or ePOS systems can accelerate the cashless checkout process. This ensures they spend less time waiting and can complete their purchases more quickly.

Self-serve kiosks are becoming more prevalent. When combined with mobile wallets, they can speed up customer transactions and offer real-time offers based on a customer’s purchasing journey.

McDonald’s, for example, has started experimenting with self-order, self-pay kiosks to take customized orders and provide quick services.

Keep this in mind and start investing in understanding your prospects both in the online and offline space. Redefine your value chains with emerging technologies to fulfill the rapidly changing demand of customers across every digital touchpoint. For more technical solutions, Get in touch with experts at Cygnet at +1-609-245-0971 or

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