Online to Offline Retailing - China - July 2016
“The online retail market is slowing, becoming more competitive and has to become more integrated with offline retailing. Retailing has to include a combination of both, requiring redefining what the role of physical stores should be and using more mobile technology. Rising competition is already driving mergers and cross-investment deals as retailers look for online-to-offline synergies. This will also help them provide the higher-quality products and value-added services consumers want, and are willing to pay for. Online and offline retailers can no longer survive on being the cheapest, nor can they survive much longer without profits.”
– Matthew Crabbe – Director of Research, Asia Pacific
This report examines the following issues:
- Is ‘peak internet’ around the corner?
- It’s all just retail!
- Tailoring the shopping journey to individual tastes
Online-to-offline (O2O) retailing (also known as Internet+, or omni-channel retailing) can be defined most simply as the integration of online retailing to traditional bricks-and-mortar retailing.
However, it covers a wide range of commercial and consumer activities, and aims to focus those online and offline activities into coordinated strategies as an integrated, multi-channel business plan designed to utilise online assets to re-establish in-store value, with a view to increasing overall retail revenue (both online and offline). This multi-channel approach is more two-way, from online-to-offline, and from offline-to-online.
It can also be seen as a business strategy that simply draws potential customers from online channels into physical stores, by identifying customers in the online space, via email, social media, online gaming, online retail channels and internet advertising, using a variety of marketing tools (both online and offline) to guide customers from those online spaces into the physical retail spaces. This approach is more one-way, from online-to-offline only.
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