One of the valuable “exits” for modern retail from difficult times is the O2O (Online to Offline) model, where consumer experience and needs are the “key”.
O2O (Online To Offline) is a model used by retailers to attract potential customers from online channels to their stores. This is a model where businesses will use online tools and other means to reach and influence customers’ shopping behavior to increase revenue.
It can be said that O2O is a concept that has been mentioned a lot recently, especially when Vietnam’s retail industry is having an impressive recovery in Q1-2022. According to a report from Vietdata, retail sales of consumer goods and services was estimated at 1,318 trillion VND, up 4.4% over the same period last year. Especially in March, trade and service activities were quite active, estimated at VND 438 trillion, up nearly 10% over the same period.
According to sharing from ByteTech – a unit specializing in providing technology solutions in the management and use of customer data, the first problem for the O2O model that Vietnam’s retail industry is solving is creating a digital experience. Seamless in multi-channel. Although O2O is a familiar concept in recent times, however, there are also many confusing definitions, for example Buy Online to pick up goods at the store is offline, get a Voucher or Ticket Online and use it in the store (Offline), O2O is Offline to Online… Of course things are not so simple.
“When starting the Online to Offline solution, Business Owners are usually very excited. They will know what advertising customers come from, however, a question arises right after that: “Then what do we do next?” follow?” This question will originate from a series of analysis such as brand, distribution channel, conversion rate optimization strategy…and accordingly, which retailers have the technology available to “understand” customers the best will be the winner,” said a ByteTech representative.
The retail industry is entering a recovery phase and the O2O model is asserting its strength from the virtual world to the real world. Source: illustrations
Change to adapt
With the retail industry continuing to shift into the “new normal”, what brands need is a sharp adaptation to survive and maintain a competitive advantage. An increasingly diverse customer experience directs businesses to invest in a separate shopping journey according to consumer behavior, thereby designing expensive touch points, “encircling” both emotions and reason to convince customers to make decisions.
Besides, in Vietnam, multi-channel business from online to offline is currently an inevitable trend. Currently, familiar domestic units are gradually approaching and implementing the digital transformation process from operational management to sales and business strategies extremely seriously and professionally. For example, in the process of developing sales channels, the O2O model is flexibly applied by these units in increasing the shopping experience, shortening the gap between online and offline, not just pulling offline customers online. According to ByteTech, from the experience of implementing practical solutions, many studies also show that the characteristics of the Vietnamese consumer market are very different when the majority of customers are young, update quickly and accept tend to be quite open-minded, even though their own true needs may not be clear.
Therefore, it is difficult to set up the right content to lead customers to find what they need and feel satisfied and convenient when shopping. However, if this need is met, everything becomes very easy, in terms of building brand reputation, in addition to increasing revenue and expanding customer base.
According to CBRE, in the long term, online retailing will continue to play an important role and retailers must adapt to this trend. According to the 2021 report released by Google, Temasek and Bain& Company, Vietnam’s online retail will grow at an average of 29% annually until 2025. Besides, brick-and-mortar stores will have to include many interesting topics and more lifestyle related to increase engagement and engage both online and offline consumers. In addition, the form of cashless payment (e-wallet, transfer, card payment, fintech applications, …) is also a factor in modernizing the retail industry, creating many digital interactions between sellers and buyers, in order to comprehensively recover the retail industry in 2022 and in the future.