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Omni-channel: Online to Offline
Click-and-Mortar
Wei-Lun Chang
wlchang@mail.tku.edu.tw
Professor
Department of Business Administration
Tamkang University
Launching Yelp Reservation
2
Launching Yelp Reservation
• Motivation
– Yelp needs a partner (online reservation)
• OpentTable (2013), RezBook, SeatMe
• Background
– Industry: 661 billion , but only 20% survived
– OpenTable is the most popular platform
– Yelp can enhance revenue (increment of number of
employee)
– Mobile device integration
– More investment
3
Launching Yelp Reservation
• OpenTable
– Own reservation system (ERB)
– Installation fee: 600-700 USD
– Customer : via OpenTable (1USD) 、 via restaurant
(0.25USD)
– Restaurant : 270 USD / month
4
Launching Yelp Reservation
• RezBook
– Urbanspoon
– Online selection (seats)
– Restaurant : 200 USD / month
– Customer : 1 USD
• SeatMe
– Restaurant : 99 USD /month
– No fees of each transaction
– Earn 1188 USD of a customer per year
5
6
7
Failure: Webvan
• Too Quick to Scale
– Vans, computer systems and software, personnel costs
• The company did not outsource its distribution
– Webvan owned and operated warehouses
– efficiently rationalize delivery routes
Source:
https://rctom.hbs.org/submission/webvans-demise-or-when-technology-fails-to-meet-operations/
8
Walmart v.s Amazon
• Walmart
– Leading technology
• Amazon
– Auto-pricing robot
– Amazon Mom (competitor: Diapers.com,
2009)
9
Amazon
• Amazon Books
– 2015/11, Seattle
– First online to offline bookstore
• Amazon Go
– Real-world grocery store
– Artificial intelligence & Internet of things (cameras and
sensors)
• Whole Food
– Amazon fresh pickup
– Organic food (460 stores)
– 70% of population + 1-hour deliverySource:
http://finance.technews.tw/2017/01/08/retail-business-am
Source:
https://www.geekwire.com/2017/amazon-set-open-secon
10
11
12
Amazon
• Amazon Dash Button
– Amazon Prime
– $ 4.99 USD
– Set it, press it, and get it
– 80+ brands, 100+ products (2016)
Source:
https://techcrunch.com/2016/03/31/amazon-
expands-dash-button-line-up-top-sellers-to-
date-include-tide-bounty-cottonelle/
13
Amazon
• Amazon Key
– Amazon Prime
– Amazon Key In-Home Kit, $250 USD
– 58% prime members won’t use it
– 5% prime members will use it
Source: https://www.amazon.com/Introducing-
Amazon-Key-In-Home-Kit/dp/B00KCYQGXE
14
Walmart
• Walmart.com
– Ship from store
– Site to store
• 10 AM to 10 PM
• 24 hours pickup
• Walmart pickup grocery (2014)
– Online order, drive through pickup
– 2 hours
– 10,000+ items
• Shipping pass v.s Amazon prime
– 2 days guaranteed
• Merger
– Jet.com
15
O2O Blueprint
16
Effect of Omni-channel
• Amazon is accounting for 26% of online retail sales
• US Survey (2015/6-2016/8, 46,000 shoppers)
– 7% online-only shoppers
– 20% store-only shoppers
– 73% omnichannel shoppers
• The more channels customers use, the more valuable they
are
• Omnichannel shoppers are more loyal
– 23% more repeat shopping trips, are willing to recommend
• Encouraging online customers to visit a store increased
profits
17
Case: Warby Parker
• 2010-present
• Try-at-home, one-for-one business model
• Offer the best experience to customers
– 1st
: On-the-spot eye exams, next-day and direct-
to-door service
– 2nd
: Order online (5 frames), try at home (5
days), return the box (free shipping)
18
Logistics: IT Perspective
• Software
• Infrastructure
• People
To support process
19
Summary
• How to become competitive?
– Last mile of logistics
• Location is important
– Exclusive item
• Channel, …
– Omnichannel strategy
• Online x Offline
20
Successful Strategies for Omni-
channel Retailing
21

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Topic 3 o2o

  • 1. Omni-channel: Online to Offline Click-and-Mortar Wei-Lun Chang wlchang@mail.tku.edu.tw Professor Department of Business Administration Tamkang University
  • 3. Launching Yelp Reservation • Motivation – Yelp needs a partner (online reservation) • OpentTable (2013), RezBook, SeatMe • Background – Industry: 661 billion , but only 20% survived – OpenTable is the most popular platform – Yelp can enhance revenue (increment of number of employee) – Mobile device integration – More investment 3
  • 4. Launching Yelp Reservation • OpenTable – Own reservation system (ERB) – Installation fee: 600-700 USD – Customer : via OpenTable (1USD) 、 via restaurant (0.25USD) – Restaurant : 270 USD / month 4
  • 5. Launching Yelp Reservation • RezBook – Urbanspoon – Online selection (seats) – Restaurant : 200 USD / month – Customer : 1 USD • SeatMe – Restaurant : 99 USD /month – No fees of each transaction – Earn 1188 USD of a customer per year 5
  • 6. 6
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  • 8. Failure: Webvan • Too Quick to Scale – Vans, computer systems and software, personnel costs • The company did not outsource its distribution – Webvan owned and operated warehouses – efficiently rationalize delivery routes Source: https://rctom.hbs.org/submission/webvans-demise-or-when-technology-fails-to-meet-operations/ 8
  • 9. Walmart v.s Amazon • Walmart – Leading technology • Amazon – Auto-pricing robot – Amazon Mom (competitor: Diapers.com, 2009) 9
  • 10. Amazon • Amazon Books – 2015/11, Seattle – First online to offline bookstore • Amazon Go – Real-world grocery store – Artificial intelligence & Internet of things (cameras and sensors) • Whole Food – Amazon fresh pickup – Organic food (460 stores) – 70% of population + 1-hour deliverySource: http://finance.technews.tw/2017/01/08/retail-business-am Source: https://www.geekwire.com/2017/amazon-set-open-secon 10
  • 11. 11
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  • 13. Amazon • Amazon Dash Button – Amazon Prime – $ 4.99 USD – Set it, press it, and get it – 80+ brands, 100+ products (2016) Source: https://techcrunch.com/2016/03/31/amazon- expands-dash-button-line-up-top-sellers-to- date-include-tide-bounty-cottonelle/ 13
  • 14. Amazon • Amazon Key – Amazon Prime – Amazon Key In-Home Kit, $250 USD – 58% prime members won’t use it – 5% prime members will use it Source: https://www.amazon.com/Introducing- Amazon-Key-In-Home-Kit/dp/B00KCYQGXE 14
  • 15. Walmart • Walmart.com – Ship from store – Site to store • 10 AM to 10 PM • 24 hours pickup • Walmart pickup grocery (2014) – Online order, drive through pickup – 2 hours – 10,000+ items • Shipping pass v.s Amazon prime – 2 days guaranteed • Merger – Jet.com 15
  • 17. Effect of Omni-channel • Amazon is accounting for 26% of online retail sales • US Survey (2015/6-2016/8, 46,000 shoppers) – 7% online-only shoppers – 20% store-only shoppers – 73% omnichannel shoppers • The more channels customers use, the more valuable they are • Omnichannel shoppers are more loyal – 23% more repeat shopping trips, are willing to recommend • Encouraging online customers to visit a store increased profits 17
  • 18. Case: Warby Parker • 2010-present • Try-at-home, one-for-one business model • Offer the best experience to customers – 1st : On-the-spot eye exams, next-day and direct- to-door service – 2nd : Order online (5 frames), try at home (5 days), return the box (free shipping) 18
  • 19. Logistics: IT Perspective • Software • Infrastructure • People To support process 19
  • 20. Summary • How to become competitive? – Last mile of logistics • Location is important – Exclusive item • Channel, … – Omnichannel strategy • Online x Offline 20
  • 21. Successful Strategies for Omni- channel Retailing 21