Online to Offline: Framework for Engagement

The average shopper now moves without hesitation across contexts, media channels, platforms, and devices. As a result, the lines between online and offline have become increasingly blurred and the traditional ways of looking at shopper behaviors need to be re- examined. Media-channel-specific targeting cannot keep pace with the ‘fluid consumer’ and is no longer an effective strategy. To maintain engagement in this shifting landscape, a new paradigm is required.

The Online to Offline (O2O) framework is the new paradigm.  Let’s take a closer look at the defining principles of O2O, by analyzing the O2O shopper and examining two cases of marketing in O2O ecosystems.

The Pervasiveness of Digital – Old Paradigms Broken

The term online-to-offline (O2O) reflects the latest stage of the rapid convergence of our digital and physical worlds. In this stage, the direct connections between a shopper’s actions in the online and offline worlds have become clearly visible. With this visibility, it becomes apparent that adapting a single insight to different media channels is not a sufficiently flexible approach to shopper engagement.

The O2O shopper has developed an increasingly complex web of habits and actions as part of their everyday consumption. The relatively straightforward decision funnel has become the highly non-linear Purchase Decision Journey (PDJ). It is not a simple case of the shopper being more enabled by the digital-physical convergence – they have actually changed as a result of these new technologies.

The proliferation of tools which utilize location data, the adoption of cloud services that conveniently replicate data across devices, and the increasingly habitual use of mobile have combined to create a world where shopping actions cross all of the old boundaries. In this world, the relationship between digital campaigns and in-store marketing becomes much more significant.

With shopper marketing and other disciplines coming together, the O2O discipline takes an integration role that requires a broader base of understanding. The discipline has the following capabilities:

  1. An understanding of multiple traditional disciplines
  2. The ability to draw new abstractions from complex systems of interaction.

Always On – The Nature of O2O Activity

We understand O2O to be inherently cross channel, underpinned by data and natively mobile. But what really distinguishes O2O from omni-channel marketing is the continuity of the journey. The shopper’s Purchase Decision Journey is “always on”. In real terms, a shopper is no longer simply purchasing a product, but engaging with community, participating in design, attending live experiences, sharing, researching, commenting, advocating and more. In this highly non-linear system, the shopper remains engaged across numerous interactions as they move between these steps. Such flows occur naturally as part of any O2O system.

Analyzing data on shopper actions allows marketers to see the full picture – a shopper who may research in-store, but purchase online, for example. Or perhaps the individual, while never actually purchasing, continues to influence other individuals’ decisions.

We have seen location-based apps, for example, bring the consumer and the brand together in ways that create completely new opportunities. Didi Dache 打 车 allows taxi drivers and passengers to find each other as long as they are in the same vicinity. By increasing the range of taxi availability beyond the line of sight, such apps introduce significantly more options for both parties, and create a selection process that empowers both the taxi driver and the passenger.

Shoppers who embrace these technologies throughout their decision journey are not easily captured by typical campaigns. Their activities are ongoing and fluid, the pulse of interactions, data and decision-making is no longer dictated by marketers. The onus is now on brands and retailers to take part in the organic O2O processes, by following the shopper, contributing content, enhancing measurement and communication, or changing the ecosystem by introducing new tools and channels. To do so, we must understand these organic O2O flows as they exist.

O2O Dynamics – The New Governing Principles

Most crucial to shaping an O2O system is the ability to precisely orient content, creative and digital tools to the roles that shoppers play throughout the PDJ.

“Precision activation” is the placement of the right creative in the right context, using triggers and mechanics that fit with the shopper as they move through the PDJ, changing roles as they go.

In the old model, as shoppers researched, discussed and purchased, the boundaries between media channels made cross-channel transitions difficult. In the new paradigm of O2O, we need to identify which steps are tied to which shopper roles, so that we can determine the right context for our marketing programs.

Data is key to indicating shoppers’ roles at each step. We can combine cross-channel shopper interaction data – whether from in-store displays and promoters or from search keywords and online analytics – as well as simple data from a single, offline touchpoint. When that data is harnessed in real-time, we can use it to target the shopper more effectively, maximizing the influence of creative when it counts.

A mother shopping in a Beijing baby store, for example, notices a display for an educational event on the topic of second stage infant nutrition and learns more by talking to the in-store representative of the brand. They follow the brand on WeChat to get more information. A unique QR code identifies the event in which the shopper is interested, and the event topic indicates the shopper’s stage of motherhood.

The representative can follow up with the mother through the brand’s official WeChat account. Creative and content are all targeted for the specific media channel and shopper category ensuring the shopper receives information relevant to her child’s stage of development. Mothers’ groups pass along trackable event content on WeChat and discuss the events as they happen on brand-sponsored sites. Through brand-retailer partnerships and retailer apps, the shopper can receive educational content triggered by in-store ultrasound signals.

The brand uses engagement KPIs relevant to these interactions and to the brand’s new educational platform – follows, shares, attendance, and research – to indicate the effectiveness of the O2O campaign.

Designing such interactions as part of holistic O2O engagement often means defining new supporting roles for brands or retailers and incorporating insight-driven creative into the shopper-brand-retailer interactions. The more dynamic the interactions, the more engaged the shopper becomes within the O2O ecosystem.

If we look at the example of Mengniu’s community shopper platform, we see another example of this holistic ecosystem. Mengniu’s app allows store-owners and shoppers in each others’ vicinity to connect for small convenience purchases.

Mengniu’s initiative to expand convenience consumption by local community shoppers relied upon the highly-fragmented community of retailers accepting the new service. The vast majority of these retailers are small, owner-operated businesses, with limited resources and very thin operating margins.

Using our proprietary shopper strategy platform, we mapped the Purchase Decision Journey and employed “agile” software practices to perform interaction analysis around the shopper-retailer relationship. The resulting insights provided the design principles for a marketing program that emphasized ease of use and used incentive mechanics to support shopper-retailer interactions. To ensure platform adoption, we deployed promoters in the retail operations, demonstrating the effectiveness of the platform, providing in-store training and assisting owners with fulfillment. This cross-discipline approach removed the major barriers to shopper adoption.

A well-designed O2O system is built on shopper insights and, therefore, will act as a natural filter for shoppers who find the brand relevant. The right mechanics allow the shopper to shift easily between roles. The right triggers map to each of the shopper roles. Developing consistent experiences, messages and promotional activities will keep the shopper engaged across channels, devices and platforms.

With real-time data illuminating the O2O system flows, holistic analysis of retail in each ecosystem, and re-occurring opportunities to target the shopper, the O2O discipline provides us with the principles and practices to actively optimize the digital-to-physical PDJ.

Shifting The Paradigm – Keys to Success

The greatest barriers moving from traditional omni-channel marketing to an O2O system are the lack of cross-discipline understanding and the existence of operational silos within organizations. The most effective way to overcome theses barriers is knowledge.

Our methodology starts by asking these questions:

• How well is your store connected to your eCommerce operation?

• Does your website drive in-store traffic as effectively as it could?

• Which touchpoint offers the greatest potential for increased engagement?

• During which steps does the shopper most influence others?

• How much do your analytics impact the shopper experience?

• Can you customize shopper experiences both online and offline?

• What value do you attribute to offline experiences when shoppers buy online?

• How do you collect data offline without retailer sell-in?

• Does your creative change with the guidance of data insights?

Closing the loop between online and offline remains a challenge, but digital’s increasingly seamless integration into our lives will continue to provide more solutions. We believe O2O is the framework for interpreting and profiting from this very dynamic landscape. From the old framework to the new, the guiding principles have changed:

• The previously linear purchase funnel has become non- liner network of interactions, known as the Purchase Decision Journey.

• Contextualization by media channel has been replaced by contextualization through cross-channel roles.

• Brands and retailers have expanded their roles to help lower barriers to new shopper interactions.

In this new landscape, we utilize data markers to identify transitions between shopper roles, more accurately mapping the Purchase Decision Journey and optimizing creative to target shoppers with increasing efficacy.

With these guiding principles in place, an approach for modeling O2O interactions and appropriate KPIs, our existing marketing disciplines work together to help clients make sense of the dynamic O2O landscape.

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