Generally talking about digitization of sales or business, we often think of e-commerce and although we have heard of it few people understand the O2O (Online 2 Offline) principle as well as the Omnichannel model applied to business digitization (both retail and wholesale). And most businesses upon digitizing retail & wholsale often think about Digital Marketing and E-commerce. In reality many businesses, even the giants of the retail industry, have tried to do it again and again without success. The biggest cause is not following the O2O principle. In short, reaching customers is increasingly shifting and dependent on Online, while converting into sales, most of them are still Offline.
A survey also shows that when applying the Omnichannel model, businesses can increase the frequency of shopping by 2.5 times and increase the order value by 13%. All are the result of adopting Omnichannel policy and model.
Offline Income Still Dominate Online Income
In Vietnam, in 2020, the total retail income on e-commerce will reach 8 billion USD, but only accounted for 5.5% of retail GMV in the year according to Vietnam E-Commerce and Digital Economy Bureau.
In Asia, in 2021, total retail sales on e-commerce will reach 74.36 billion USD, accounting for only 7.4% of retail GMV according to eMarketer.
Globally, in 2020, total online retail sales only account for 17.8% of retail GMV and is forecast to reach 19.6% in 2021 according to Statista.
International and Vietnam Industry Giants Have Deployed O2O.
Amazon.com according to published numbers and word of mouth from the US market seems to generate almost no profit and Amazon's profit seems to be generated from other infratructure services, the most famous of which is AWS. Walmart, which today has become a very sexy business in digital transformation, since 2000 has soon started to go online and today 80% of its brands are online, start to go online since 2000 and is considered to be event more sexy than Amazon. And Amazon didn't start going offline until 2015 and only can generate higher revenue than Walmart in 2020 and 2021 due to the impact of Covid.
In Vietnam Vingroup, MM MegaMarket, Coopmart, Lotte, ... have all deployed the O2O model.
Consider the O2O Omnichannel model for a better business outcomes in optimizing revenue and customer experience.
11. 11
Vietnam Online vs Offline Retails
Vietnam E-commerce and Digital Economy Agency 2020
278 5.5%
5,059
Vietnam E-commerce GMV 2020
(VND Trillion)
E-commerce Total Retail
12. 12
Asia Online vs Offline Retail
2021 Online Retail GMV takes 7.4% of Total Retail GMV in Asia
eMarketer
13. 13
World Wide Online vs Offline Retail
2021 Online Retail GMV takes 17.8% of Total Retail GMV World Wide
14. 14
SEA O2O Popularity
SEA-6 O2O Platforms Consumer Survey by Bain & Company
1 in 5 MSMEs are using O2O Platforms
80% MSMEs agree they need to use O2O
Platforms to succeed in the future
Merchants
Consumers
7 in 10 Consumers have increased spend on O2O
service compared to 1-2 years ago
80% Consumers agree that O2O Platforms have
had a positive influence on their quality of life
25. O2O Omnichannel Commerce Model
PAID ADVERTISING
SEO & SEM, Linkedin Advertising,
GDN, B2B Directory Advertising
Reach & Impress
AFFILIATE MARKETING
KOC & Publishers
MKTPLACE & SOCIAL ECOM
Lazada, Shopee, Tiki, Now, Grab, Zalo
Shop, Google Store, Fb Shop
DIRECT MARKETING
Email, SMS, Messenger
SOCIAL MEDIA
Linkedin, Youtube; Tiktok, Facebook
CHAT BOT
Social & Messenger
PR & SEEDING
News, Forum, Social
Nurture & Convert
MARKETING AUTOMATION
Automatically track, nurture, and convert
consumers
O2O OMNICHANNEL PLATFORM
(WEB + APP)
B2B2C E-commerce System
Point of Sales (POS) System
Driver App
Logistic & Delivery System &
Payment
Loyalty System
Care & Retain
CUSTOMER RELATION
MANAGEMENT (CRM)
Customer Data Platform
(CDP)
Helpdesk, FAQ,
LiveChat (Bot Enabled)
26. Online 2 Offline How To Connect?
Loyalty
Loyalty
Loyalty
O2O Centralized Loyalty App
How to find out if a customer is
acquired from online or offline?
▪ ONLINE: reward
consumers points upon their
engagement
▪ ONLINE: encourage
consumers to redeem their
points and earn more
▪ OFFLINE: ask consumer to
use their points when they
get in store Offline
27. Reach & Impress
PAID ADVERTISING
SEO & SEM, Linkedin Advertising,
GDN, B2B Directory Advertising
Reach & Impress
AFFILIATE MARKETING
KOC & Publishers
MKTPLACE & SOCIAL ECOM
Lazada, Shopee, Tiki, Now, Grab, Zalo
Shop, Google Store, Fb Shop
DIRECT MARKETING
Email, SMS, Messenger
SOCIAL MEDIA
Linkedin, Youtube; Tiktok, Facebook
CHAT BOT
Social & Messenger
PR & SEEDING
News, Forum, Social
ONLINE is the
MOST
EFFECTIVE
WAY
to REACH and IMPRESS
consumers
28. Persuade & Nurture
Nurture & Convert
MARKETING AUTOMATION
Automatically track, nurture, and convert
consumers
O2O OMNICHANNEL PLATFORM
(WEB + APP)
B2B2C E-commerce System
Point of Sales (POS) System
Driver App
Logistic & Delivery System &
Payment
Loyalty System
ONLINE is the
OPTIMAL
WAY TO
to NURTURE
and
OFFLINE is the
DOMINANT
WAY TO
to CONVERT
29. Care & Retain
CUSTOMER RELATION
MANAGEMENT (CRM)
Customer Data Platform
(CDP)
Helpdesk, FAQ,
LiveChat (Bot Enabled)
ONLINE is the
DOMINANT
WAY TO
to CARE and RETAIN
customers on all matters
and
OFFLINE is the
EFFICIENT
WAY TO
to CARE and RETAIN
customers on dedicated
matters
Care & Retain
42. Key Learnings
1
3
Less than 20% retails GMV generated online, more than 80% generated offline
Biggest commerce players in Vietnam already rolled out O2O commerce to maximize Sales & CX
4 Full O2O Omnichannel should involved not only digital tools & channels but also process & data
2 Omnichannel can boost purchase frequency to 250% and increase cart value up to 13%