Online-to-offline commerce is a business strategy that draws potential customers from online channels to physical stores. Online-to-offline commerce, or O2O, identifies customers in the online space, such as through emails and internet advertising, and then uses a variety of tools and approaches to entice the customer to leave the online space. This type of strategy incorporates techniques used in online marketing with those used in brick-and-mortar marketing. - Investopedia
The drawing factor from shopping online is the big discounts and perks given by e-commerce retailers. In 2013, a slew of online furniture retailers in China attempted to turn brick and mortar furniture stalls into mere showrooms. That prompted the China furniture association market committee to issue regulations that mandated e-commerce sites to inform physical stores and key partners if they are running deep discounts, so that prices can be adjusted together at the same time. The regulations also outlawed the use of online campaign to appear on in-store advertisements.
Deep discounts works in China, and it's not hard to get followers of popular sites like Tmall to notice when deep discount campaigns are running.
In the rest of Asia, and mainly Singapore, we are still seeing the traditional way of running discounts in-store, and only purchasing online for convenience reasons rather than financial.
In an environment of reliant on manpower and burdened by high rental, shouldn't furniture stores considering opening up their online channel and be their own Tmall?
Furniture companies can save operating expenses by running deep discount campaigns from their own online platform. This makes them become asset-light instantly, while achieving a higher ROI as it doesn't take much to run a website or an App. - Johnson Koh, theAsianIR CIO
The flow process goes like this;
Fig 1: Official account of KeLei Furniture
The Benefits of O2O business model
Many of today's internet technology are open-source, thereby reducing cost of systems and only having to fork out design and developer fees. Which is why we are seeing the companies are starting to invest in Apps and Marketplace sites that are specific for their own use.
theAsianIR provides such an E-commerce App system for the furniture industry at a price less than the cost of one year's salary for a sales person. The ROI is instant because the company immediately becomes asset-light and reduces their operating expenses.
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