Typically, it is safe to view the 'next big thing' moniker with skepticism when it comes to the Internet. There is such a history of false starts and ideas that seemed good on paper―but then ultimately failed―that it is a common response. But the newest 'next big thing' in online commerce is not something to dismiss so easily. It's called 'Online to Offline' commerce, or O2O. Like its predecessors in the Internet commerce world―B2B and B2C come to mind―it promises to be something that truly is a big deal.
Put simply, O2O Commerce is the utilization of online efforts and methodologies for driving offline, local sales. As online local commerce continues to explode on the web, brick-and-mortar business owners who once felt helpless to take advantage of the worldwide phenomenon of the web are now grasping it enthusiastically and with a very specific direction.
Some very obvious examples of O2O Commerce are Groupon, Restaurant.com and SpaFinder, all of which were recently highlighted in an article on O2O Commerce in TechCrunch. What all of these sites have in common is their use of the Internet to appeal to consumers via an online connection, and the leverage of that connection to persuade the consumer to purchase locally, and in person.
According to research, the average e-commerce shopper spends around $1,000 per year. However, that number is still dwarfed by the amount of money that is spent 'live and in person' at local establishments. All the aforementioned companies, as well as essentially all companies engaging in O2O Commerce, share one thing in common, in that they act as a platform for discovery of local venues or service providers via the web. For example, even though a great restaurant may be only a few miles away, you may have never heard of it. With Restaurant.com, and many others that work in the same space, you can research restaurants in your area by type of cuisine, price, reviews, and other criteria, and then make reservations online.
Groupon, another big player in the O2O market, is unique in that it provides coupons for local services directly to consumers. Consumers sign up to receive special offers from Groupon―narrowing down their interests via the site's functionality―and receive one offer each day in their local area. In some instances, consumers may receive deals for stores, restaurants, pubs, and other establishments that they are already familiar with, but are nonetheless drawn back in by the 'deal' that they received via e-mail. In other instances, consumers can discover new spots via Groupon, making the company one of the best known and biggest in the O2O space.
And while all of these O2O sites are very attractive for consumers, they also are huge for local businesses. In the past, local businesses had great difficulty tracking the effects of their local advertising efforts. With Groupon and other O2O sites, however, everything is very easily and obviously quantified and tracked. Businesses utilizing O2O services understand exactly what their ROI is on their ad spending, and can make fine-tuned changes as needed to bring in more business. And, thus, the era of brick-and-mortar businesses not getting to share in the joys of widespread Internet marketing are a thing of the past.