O2O2O: A New Business Model for Traditional Retailers
Investing in innovation for a new digital era of retail
Jan 15,2021

Betty Chen, our project execution manager, has years of experience managing e-commerce and retail software projects. Here, she describes an Online-to-Offline-to-Online (O2O2O) strategy that follows a staged digital transformation journey in retail. She offers Carrefour’s case as an example of how a well-formed O2O2O plan can help established retail businesses survive in the competitive new digital era.

What are O2O and O2O2O?

O2O is an abbreviation for Offline-to-Online strategy, which describes a situation where a business directs its physical store customers to its online store. Sometimes O2O can also refer to an Online-to-Offline strategy. In this case, the process is reversed as online customers are brought into physical stores.

O2O2O, short for Online-to-Offline-to-Online, describes a complete cycle where consumers are directed between offline and online stores as they encounter the brand across different contexts and platforms. A smart O2O2O strategy that leverages the latest technology has the power to reinvent the consumer life cycle while optimizing customer experiences.

From O2O to O2O2O: How retailers can keep up with consumers

In a time of profound disruption and change for retail and consumer goods, businesses must pivot from selling products to providing a complete, end-to-end customer experience through online and offline.

There are a few factors that underscore the urgency of this shift. The first is that the main customers of traditional retailers are between 40 and 60 years old, and shifting the consumption patterns of this group is a significant challenge.

At the same time, digital technologies now permeate our lives to the point where retailers must develop more sophisticated digital strategies to keep pace. Simply working alongside an online store is no longer sufficient as a digital strategy.

Betty suggests that traditional retailers develop strategic plans and encourage customers to engage with their brands across both online and offline channels through different activities. She provides an O2O2O strategy — formulated at three stages — to help retailers create a vibrant and unique shopping experience for customers while driving customers from digital devices to stores and vice versa.

Stage 1: Create a digital strategy by blending in-store advantages

People still value the in-store shopping experience. Traditional physical stores offer not only products but also atmosphere, entertainment, stimuli, and inspiration. At the first stage of their digital strategy, businesses should bring something customers value from inside the store online. The best way to do this is by connecting with customers and solving their pain points. In this way, an O2O2O strategy can boost the usage of your brand’s digital platforms and build customers’ trust in your upcoming digital services.

Stage 2: Predict mobile app usage in everyday life

Mobile apps are becoming a go-to tactic for retailers because they promise highly convenient digital engagement. Engaging first-time users the right way can secure a stream of loyal, returning customers for months and years to come. The question is how best to engage mobile users. To create a successful mobile app, you first need to think about the end-users (and keep them front-of-mind throughout the process). Your primary goal should also be to solve their problems and fulfill a particular purpose for them. A few key features that provide tangible solutions for users include:

  • Deals and Offers
  • Price Checker and Comparison
  • Analytics Integration
  • Loyalty Program
  • Mobile Wallet

There are many others, but these are a few to keep in mind as you embark on the journey of designing your mobile app.

Stage 3: Blur the line between digital and physical worlds

In the last stage, it’s time to create a new O2O2O customer life cycle through a series of online and offline activities. To ensure that these customers eventually become loyal consumers of your brand, these activities should meet and exceed their expectations for convenience, efficiency, indemnification, and potential benefits. At the same time, you can use data you gather to connect all facets of the customer and drive new retail success.

Case Study: Carrefour App Clips

Cloud Interactive has been working with Carrefour to develop the brand’s mobile app using an O2O2O strategy. We understand that customers like shopping in stores but hate standing in line. With this in mind, we helped Carrefour improve their customer experience in physical stores with Apple’s new App Clips, which were released with iOS 14 in September 2020.

App Clips let people quickly access a brand’s app without downloading it. Carrefour’s “Scan & Get The Loyalty Card” App Clip lets customers sign up for a Carrefour loyalty card without waiting in line. The “Go Self-Checkout” feature allows them to tap NFC to scan items they want to buy, expediting Apple Pay checkout.

These new One Carrefour app features improve customers’ shopping experience by solving their pain points and help Carrefour reduce labor costs and boost their online ROI. Additionally, customers enjoy acting as advocates. By having a great mobile referral program, Carrefour can attract new customers to stores via referrals and eventually generate a complete O2O2O consumer lifecycle.

More and more retailers are embracing app gamification to enhance the online shopping experience and build long-term brand loyalty, so you may want to include challenges and rewards in your digital strategy. However, remember that customers are diverse, and not all will find gamification engaging and appealing. Betty recommends referring to your customer personas every time you consider new digital features.

As with any other marketing strategy, you must understand your audience to truly improve your ROI.

Cloud Interactive has years of experience in e-commerce and retail software projects. Contact us now for help in boosting your business to the next level!


About Cloud Interactive

Cloud Interactive is an AI, Software Engineering, and Design consulting company founded in 2010.

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