The online to offline (O2O) economy is a relatively new concept. The O2O experience utilises a combination of the speed and convenience of the internet with the physicality of brick and mortar stores. While undoubtedly the strongest in countries like China, it is heralding a revolution in the way people engage in commerce.
Here are 4 use cases of O2O economy in action.
Time Inc. is one of the world's most influential media companies - home to 100 iconic brands like People, Sports Illustrated, Time, InStyle, Real Simple, Food & Wine, and Fortune, as well as more than 50 diverse brands in the United Kingdom such as Decanter, Horse & Hound and Wallpaper. Their digital properties include more than 60 websites, reaching 150+ million monthly digital visitors, 2 billion video reviews and a social footprint of 200+ million through FB, Instagram, Pinterest, Google+ and Youtube.
TimeInc announced early last year that one of their magazines, InStyle USA will relaunch as a digital first brand as they embark on a strategy to directly address changing needs of fashion-obsessed audience. Collaborating with their InStyle UK team, they will take InStyle to be a fully digital brand to deliver a "24-hour content offering" to their viewers. Their digital solution propelled them to achieve 200% growth in 2017, across all their inStyle branded digital platforms.
Their O2O strategy is simple, to restructure their organisation with a complete focus on digital content content so that they create more value on their Print Edition and get viewers to spend more offline at their sponsors.
The goal is to create what is essentially a 24-hour stream of content. "InStyle UK's transition to digital only is a huge opportunity for the brand online," editor-in-chief Laura Brown said. "We will be working closely with the team to generate and share original content, especially on news. We'll just have to manage 'color' versus 'colour'."
The brand has a loyal following, with readers purchasing an average seven items solely from the advertisements, more than any competitor. What’s more, of any major American magazine, InStyle has the highest number of readers with an annual household income of more than $100,000. Its readers also have the highest median household income: $83,554.
Autobahn car vending machines include cars from Ferrari, Bentley and Porsche, which can be purchased by customers who visit the Vending location. Rather than a regular sales process potential buyers can order a car all with the touch of a hand-held device. Once a selection is made, a promotional video of that car is played on a flat-screen television while the vehicle is transported down by a lift.
"When the customers see a car that is presented in a way like a beauty pageant, they just decide the winner and that's it." Gary Hong, Autobahn car-dealer
Autobahn has seen sales that have risen by 30% since the move to the new premises in December 2016.
With land at a premium in the city-state, Hong said his unorthodox SG$ 3.0mil facility optimises land use. The company stores between 70-80 cars at its facility, a number that will otherwise require 5 times the space if vehicles are parked traditionally.
Cars can be delivered to the buyer within 2 minutes after payment thanks to a unique "fishbone" delivery system.
Adiga is a 'vegetarian only' restaurant located in Shakambari Nagar, a quiet Bangalore suburb. Despite the efficient staff and quick turnover of patrons, over most weekends there is a wait time of about 15-30 minutes for getting a table. However, on weekdays it is a different story. "Our footfall decreases to a third of the weekend high," admits Sampath Adiga, the owner.
With skyrocketing real estate costs, Sampath could not afford to have the restaurant only partially full on weekdays. "We are able to keep affordable prices only if there is a certain amount of volume to offset it," says Sampath. After experiments like tweaking weekday prices didn't work out, he decided to offer deals on 'Little', an 'Online to Offline' marketplace. On weekdays, some of the items were offered at a discount of nearly 20-40 per cent. This, he claims, drove up traffic by about 35 per cent. "I also started getting clientele from a larger pool of people."
Alibaba has launched an smart speaker system to rival Amazon's Echo, called "Tmall Genie".
By encouraging the adoption of the speakers in hotel rooms, supermarkets and airports – and offering customised services such as answering shoppers’ questions like “where to find the shampoo” in store – Tmall Genie is expected to achieve higher sales.
In late September, Alibaba AI Labs announced plans to equip 100,000 hotel rooms with the speaker, starting with those owned by Marriott International, which recently set up a joint venture with Alibaba.
Answering to "Tianmao Jingling", the mandarin pronunciation of Tmall Genie, the speaker debuted in the China market in July, offering services similar to a real butler. Working in a similar fashion to Amazon Echo, it can switch on your television, read the children a story, and order takeaway food via voice request. Chen Lijuan, general manager of AI Labs, said she is confident that Tmall Genie will hit the 10 million unit sales mark in less time than it took Amazon Echo, the global market leader.
“We are confident that we can outpace Amazon Echo in growth,” Chen said without revealing Tmall Genie’s current sales numbers.
More than 10 million Echo units, the first such speaker in the market, have been sold since its launch in late 2014, triggering a rash of similar products, including Google Home powered by Google Assistant and Apple’s HomePod powered by Siri. In China, more than 100 companies from internet giants Baidu and JD.com down to small start-ups have jumped on the bandwagon.