O2O Strategy: Ecommerce & Retail Store Synchronization

In the retail segment, consumers who engage in online and offline shopping spend an average of 60% more than those who shop in traditional stores. In the first half of 2015, the O2O market in China increased by 80% (calculated by HSBC). The enormous numbers and innovations are proof of the popularity and opportunities of O2O in the market today.

In other words, the mutual support between Online and Offline is a critical key to retailer’s success. Hence, the goal of this session is to help retailers maximize their sales with ultimate solution – synchronize eCommerce site and retail store.

Table of Content How to synchronize eCommerce site and retail store? 1.1 Use Technology -1.1.1 Integrate POS and Inventory System -1.1.2 Integrate eCommerce site with POS System 1.2 Use Marketing methods -1.2.1 QR code/ ibeacons/ Website Address on In-Store Advertising -1.2.2 Inviting Customers to Pay a Visit -1.2.3 Click and Collect -1.2.4 Customer Review Case of Success – Topshop – Taobao Shopping Center – 99 Ranch Market and WeChat’s Shake – Macy’s and Nordstrom – Amazone Locker Conclusion

1. How to synchronize eCommerce site and retail store?

1.1. Use Technology

With the integration of online and offline sales channels, customers can have a better, personalized, and convenient shopping experience. This approach will terminate the disadvantages of each channel as well as quickly expand the sales. Thus, retailers really want to adopt this method as soon as possible.

And the first step to reach the success is to improve or use technology solutions to strengthen the online-offline integration.

1.1.1 Integrate POS and Inventory System

To keep up the leading position in today’s competitive retail market, you need a good POS and Inventory system to help you run the business properly.

Why do you should integrate POS and Inventory System?

The integration between your Inventory Management and POS system leaves plenty of good points:

a. Save time, reduce costs

• Quickly finalize an order – faster checkout processing: No need to wait for a long time. Your customers will enjoy a quick and accurate checkout at an effective retail POS system. Every item with a barcode can be easily scanned and tagged. Sometimes, just carrying an iPad or iPhone enabled POS system with a credit card reader is enough.
• Track goods with high accuracy – Speed up Inventory management: With inventory and barcode scanning system, you do not have to worry how much inventory you have on hand. POS system keeps track of that and you have information at a glance.
• Minimize the chance of human errors – POS Inventory Management System allows the business owner to have multiple sales locations and track inventory at each location without being present. The boss can be away and no longer worry about employee theft. The efficiency of the staff can be maintained.
• Prompter payroll processing – The system will automatically calculate the payroll and can even print out payment slip to your employees. No longer manually logged.

• Find data without receipts – You can search for any transaction you want by using the search engine, no matter how long the transaction is.

b. Up to date and close management

• Updating sales reports – Do not guess the sales trend, a good retail POS system provides you with up-to-the-minute sales reports for the day, week, month or year. It will show you the background of your business.
• Real-time inventory tracking management – The system will warn when you’re too low, complete the PO, and track your providers. A complete tracking system helps you know what is going on in your business.
• Market analysis to keep up with the trend – Know what are the best sellers and who’s selling the most? The reporting capabilities of the POS system can take care of that and help you make informed sales decisions.
• Staff management – the program helps you check who’s coming in early and who’s slacking off.

c. Improving CRM

• Upgrade customer data – Updating customer information has never been easier. You can send emails about campaigns and special occasion or sale-off program to your customer and more.
• Reward point – Know your customers better by tracking what they buy and giving them points for each sale. That point will keep customers coming back for more shopping.
• Customer loyalty programs – Loyalty programs are to encourage repetitive transactions and increase your average customer base. Discounts, coupons and free gifts can be easily managed for loyal customers.

d. Smart, cool and modern

• IPad-based POS System – Smaller than your typical POS system, iPad-based systems quickly replace large and cumbersome systems.
• Handheld POS system on iPhone – Use your POS system with you wherever you go by turning on the iPhone.
• A farewell to login – No need to manually write orders and count inventory anymore. You will also help the environment.

So, How to integrate POS and Inventory System?

You should know that the unique business model of online-offline integration provides a consistent experience, simplifies processes and daily operations to improve customer relationship.

Moreover, each business, whether small or large scale, faces managing a huge of orders every day. Not only does it require Pos to quickly complete the order, it is also now more necessary to integrate your POS with inventory management system. Retailers can easily track the amount of merchandise available and quickly update your data as well as enhance customer shopping experience. In order to make this union a success, implementing POS or tablet-based POS is a viable option.

Then now it’s up to you. If you are planning to buy a POS system, it should be able to do everything on this list and then some. To help retailers can integrate Pos and inventory system, consider taking the following steps:

a. Find POS Inventory integration solutions for Magento merchants

If you don’t have an existing POS system, let’s “surf” around on marketplaces and find for POS solutions made for Magento users and have full feature lists including integrating with inventory management. Therefore, you’ll likely run into fewer headaches when setting up and running your retail store.

b. Hire experts/ Choose third-party integrations

Retail businesses who find a POS system can’t find a direct integration or recommended add-on partner. One option for them is to talk to POS experts who will solve all messy problems for you. Besides, to keep up with retail trend nowadays, a lot of suppliers are providing the Omnichannel solution. That is one single system to centralize all of your inventory, orders, customers, and purchases across online and offline stores. They provide so many modules including point of sale and Inventory Management, so that to save your time and cost, retailers can consider buying whole one Omnichannel solution instead of buying sporadically.

There are a number of really good providers out there, including MicroBiz and Ebizmarts, etc, but Magestore is not an exception. It also provides Magento POS module that is easy to set up and a joy to use. With POS system, you can be selling in minutes, easily track your profits, manage product and take control of your inventory and customer loyalty

• Quick, Smooth and Accurate order processing
• Multiple Payment Methods
• Streamline inventory management
• Enhance reward & loyalty system
• Better Order tracking and In-store management

c. Create your own integration

Can’t find a solution that works for your own? Setting up a custom module for your business is a good idea. However, this step requires you to have access to your POS system’s API in order to build an integration for it. Additionally, building your own module can get highly technical so if you’re not adept at developing software, don’t hesitate to hire a Magento expert.

1.1.2  Integrate eCommerce site with POS System

Through the integration of your eCommerce site and point-of-sale (POS) systems in store, your business can reach higher goals with ease.

Why do you should integrate eCommerce site with POS System?

Integrating the physical and digital stores has many operational benefits and customer experience, including:

a. Allow businesses to track and manage goods with high accuracy

Save time, minimize costs and inventory control in the best possible way with the functionality of a store to simplify the inventory process and help track, manage a stand-alone warehouse or a chain of stores.

b. Save time and money

Increases productivity and efficiency with a very simple and easy-to-use way that can meet the changing demands quickly.

• Maximize profits with flexible pricing options
• Effective Staff Management:
  • Improve the efficiency of employee management with time clock, attendance, and employee tracking.
  • Manage closely sales management by sales staff, calculate sales by employee, work shift, etc.
  • Create cashier reporting.
  • Easy integration

c. Make faster and more accurate business decisions

Maintain a competitive edge and maximize revenue opportunities with flexible, easy-to-use reporting options to better assist you. You will know exactly which products sell the best at each time, as well as what you will need to buy or discount something. Similarly, you can track the benefits of your investment in advertising, mailings to customers, promotions, discounts, etc.

d. Other reasons

When you do not integrate your eCommerce and POS systems, your customer experience is being threatened. Moreover, your team is responsible for manually moving data between them, such as:

• Product data from POS to your eCommerce site
• Sales Orders From eCommerce To POS
• Shipping information
• Tracking status from POS to eCommerce channels

When these processes above are not automated, mistakes happen. It will lead to wrong product data, encounter slow shipping times, and wrong inventory level. Product information may be incomplete, inaccurate or missing.

And, all these manual processes take hours and hours to fix. This is the time taken away from something more important – your customers.

So, How to integrate eCommerce site with POS System?

After collecting information about why retailers should connect online and offline stores, let’s move on to how can do it. There are some different ways to connect your POS and eCommerce systems, which will help you find the best solution

a. Researching POS eCommerce Integration Solutions

Running a quick service, retail store or restaurant? Then you know how important it is to have an effective POS to cut the long queue of customers waiting to check out as well as save the amount of time for more profitable actions. But looking for a POS solutions is not easy. Because some systems don’t work harmoniously with other systems. The tip is when researching POS and eCommerce integration solutions, it’s necessary to note these types of integrations processes.

b. Talk to consultant from Pos Provider

Maybe, talking to the specialist is the best way to integrate your Magento store. When talking to your provider, they can help you to overcome all troubles. Don’t hesitate to ask about how the integration works, what you need to do to connect your eCommerce store with POS, or what and how data is synced between the two systems.

c. Third-party Integrations – Why not?

Firstly, before going into the main idea, I would like to reiterate that: The best POS system, for example, a Magento POS, will help you with lots of effective features about customers, inventory, eCommerce, security, reports, and more. Retailers want everything to be linked together, but it seems like finding a suite of extension that fits the online store really gives them headaches. Sometimes they do not work with your existing module or you want to install more applications. Then, finding a third-party offer is also a good choice. Because besides the product is pos, they can help you set up as well as install other modules to launch your e-commercial store.

In particular, the channels are interconnected between extensions like Omnichannel solution. You should refer to the Omnichannel package that the suppliers have. As you know, it is the overall solution for your business. Not just POS or inventory system. That includes a lot of other management features. What I think will help you succeed in the o2o market as well as grow your business.

• Driving sales and enhance customer engagement across all channels (Point of sale, Point of sale App, Marketplace, Reward Points, Store Credit, Gift Card)
• Growing quickly with a professional, efficient and streamless B2B solution
• Centralized Inventory Management & Fulfilling customer expectation (In-stock Management, Multi-warehouse, Dropship, Barcode Management, Advanced Inventory Management, Order Fulfillment, Store Pickup)
• Streamline purchasing workflow with robust Purchase Management
• Stay in the know with real-time inventory and sales report – Inventory Report
• Make it fast and efficient with billing system for your business
• Developing an Omni-channel User Experience on Mobile Apps

d. Do it yourself
If you have done everything but still not satisfied with, or cannot find the solution for your online store. Retailers had better consider creating a custom module for your business. But keep in mind that creating your own module may require high technology so if you are not good at software development you should hire a Magento professional to do this for you. It is a good way because you will get help even if everything’s done.

1.2. Marketing

O2O is one of the most important marketing strategies, which is probably what all businesses should consider and learn about O2O and O2O marketing – a component of Omnichannel, multi-channel sales.

Today most major brands use O2O in marketing activities and not all brands are successful with O2O. So here are some suggestions for your business to reach the success.

1.2.1  QR code/ ibeacons/ Website Address on In-Store Advertising

a. Use QR Codes to Promote Your Store

In the last few years, QR code “Quick Response code” has appeared more and more. QR codes immediately become a marketing tactic for marketers, even if they do not actually provide consumers with any relevant or useful content.

But that does not make QR code is not effective. Recent reports show that 19% of UK consumers have ever scanned a QR code. In the second quarter, 3.3 million people scan them. There are also a number of campaigns using QR codes that have been successful.

So if you are considering using a QR code to promote your store, there are helpful tips for you:

• Use for the proper purpose
• Do not link the QR code to a page designed for viewing on computer
• Placement: In fact, people will not be interested in scanning your QR code unless it is placed in front of them, so think carefully about the ad placement.
• Size: The minimum size of a QR code should be 2.53 x 2.53 (1 square inch) because if smaller it will be difficult to see and difficult to scan.
• Use short URL: The larger the QR code, the smaller and more difficult to read on smartphone. Thus, to reduce the number of pixels and simplify your QR code, use the shortcuts like Goo.gl or Bitly. This will make the scan become smooth and reduce the number of people who encounter errors when accessing your link.
• Tell the customer the benefit of the scan
• Try it to get the experience
• Track the results: Just like other technologies, tracking user interaction and QR codes will provide you with data for subsequent deployments.

b. ibeacons

The term Beacons or iBeacons is a small, low-power Bluetooth enabled Bluetooth Low Energy (BLE) device – also known as Bluetooth Smart, which allows all mobile devices with BLE technology to be able to capture the signal emitted from this fixed device.

It is a technology that allows brick-and-mortar retailers to send text messages directly to customer’ smartphones. This is a great way to track, attract, and convert your customers.

Bluetooth Low Energy Bluetooth technology can detect devices up to 100 meters. Based on this, ibeacon is built as a protocol that allows mobile devices to communicate short-range with fixed beacon devices via pre-installed applications using a BLE connection. Once the device is detected, Beacon can send a personalized message to the smartphone in case they have installed their mobile app.

This brings the positioning marketing to an entire level when you can detect when customers walk through your store and you can send a timely message to encourage them to take action at this time.

Now, Macy’s is using Beacons to track customer activities in their stores and offer coupons, discounts, and related information.

According to ABI Research, about 400 million beacons will be put into operation by 2020 and it is expected that in about five years, about 70% of retailers will use the device extensively. Marketers have also been preparing to unveil new ideas with plans to bring ibeacon into the technology that accompanies future marketing campaigns. Hence, to succeed with O2O marketing, using ibeacons is a must.

c. Advertising:  Attached web address is necessary

Advertising continues to be one of the most powerful marketing tactics. Marketing factors are indispensable for O2O. It’s one of the best ways to attract customers to your physical store. On advertising, don’t forget to enclose your eCommerce site address. Why? As customers may not be able to pay attention to all the details of television advertising, they may visit the site if they are interested in the products or services offered.

It does not stop at traditional advertising, brands can also promote text messages, social networking profiles, and various mobile applications to promote their website address.

1.2.2 Inviting Customers to Pay a Visit (Coupon, Promotion Code)

Retailers can use online marketing to invite customers to visit their brick-and-mortar store. That is when the o2o marketing form is applied. Landing pages with special offers can enrich those online invitations by offering discounts or small gifts to visitors. The release of coupons, vouchers is a way to stimulate customers to use your service next time.

Customers are always very sensitive to the price factor. Therefore, one-way encouraging customers to finish their orders is to give them a discount coupon code during the purchase process.

Of course, the optimum code entry will be at the last step, just before the customer clicks Pay / Order. This will help reduce the rate of unfinished orders of customers. A reasonable discount can be a boost for higher order completion rates.

No one denied the great effect of promotions for customers from eCommerce websites. After such programs, there will be more people regularly visiting the web.

Bonus: Download this Ultimate Guide to Start a Loyalty Program for your O2O Business.

1.2.3  Click and Collect

One of the biggest problems in the online shopping industry – delivery.

Fortunately, the recent trend that is developing in online and offline marketing is a term called “Click and Collect“. It solves everything.

According to one study, 60% of online shoppers have problems with online delivery. They prefer to use the car for free in the store rather than paying for shipping cost. And even when everything is done, people just do not want to wait to receive their orders. Rarely it sounds like, most shoppers like to go and pick their orders from the store. At the same time, they do not want to spend a lot of time to visit your store and find out that you’re out of stock.

So, a shipping method that creates a win-win situation for store owners and customers? It’s definitely Buy online – Pickup in store.

As a result, 72% of retailers began allowing customers to shop online before arriving at the store and receiving purchased items. This is where click-and-collect service help. Customers can buy products online and if there is a chain of stores available, the customer will select the nearest one and the appropriate time to do their shopping.

Today, there are many technological solutions that can help businesses in this case. Examples are modules installed on platforms such as  Magento Store Pickup extension – the most professional Magento shipping extension, allowing for the establishment of multiple Magento stores, displaying the address and opening hours of each store for customers.

• Create multiple stores, set the address and opening time for each
• Customers can select the nearest store at the appropriate time
• Connect to a Google map to find the store’s address

It’s a much more convenient shopping experience for both the e-commerce and the physical storage environment. This also supports the Magento POS application and the Magento Retail POS to make customers happy with the free shipping charge.

Both John Lewis and Next are using click-and-collect services and they found that it increased their online sales by 11.2%, while the business at the stores dropped slightly.

1.2.4 Customer Review

The trend of online sales is not only focused on quality of products, not only focus on developing a quality website (image, quality content …) but also focus on customers.

Your customer’s evaluation of your product or service is extremely important. Only a bad rumor about your item will definitely affect the sales much.

Now, there’re lots of smart consumers, they not only search the net for their favorite products/services but also view comments around these ones. Is that good? Is the price consistent with the market? Does the business offer prestige or not? As a business owner, be the owner of an eCommerce store, you need to pay attention to that. Retailers should change the way your customers feel about their business.

Thus, how do customers make good reviews on your product?

It is a long story. Maybe your customers forget to rate the products they bought or not feel excited enough to write a review. At that time, businesses can:

• Use email Marketing
• Should optimize your website: Make it easy for customers to leave feedback.
• Create promotion strategies

2. Cases of success

In the retail industry, the marketing strategy using O2O and forthcoming Omnichannel has been gaining attention as a key of business growth.

Here are examples of some successful brands when applying the O2O model in the retail market.

Topshop

In collaboration with ShangPin, Topshop used the pop-up store The Place at Beijing when it first introduced its brand in China in September 2014. This translation is considered a smart move. Rather than open a brick-and-mortar store, the UK’s leading luxury fashion brand has teamed up with ShangPin to launch the first mobile-industry campaign. The pop-up shops around the mall are equipped with ShangPin-style giant iPhones along with Topshop’s fashion sense. Customers can access the mobile by scanning the QR code, allowing them to share on the media as well as place orders on the network.

Taobao Shopping Center

In 2011, Alibaba’s Taobao opened a home shopping center in Beijing that allows customers to come in and try out the actual couch or bed before deciding to buy them online. PwC research shows that 60% of Chinese consumers shop at the store because it allows them to touch, feel and try to buy.

Obviously, one should not underestimate the practical experience of buying household goods and the impact of real-world trading – which the online environment cannot replace.

99 Ranch Market and WeChat’s Shake

WeChat has recognized the strategic importance of O2O and has launched a “Shake -Nearby” feature based on beacon technology. This technology allows mobile users to connect with nearby retailers by shaking their phones. The information, materials, surveys and offers will become available, encouraging them to participate in real-life shopping experiences.

The 99 Ranch Market has also taken this platform to work in the United States by leveraging both the O2O model and the popularity of WeChat with Chinese consumers. They developed a game triggered by the beacon in the store, allowing buyers to win prizes and coupons.

Macy’s and Nordstrom

In America’s largest department store chain, “Macy” tested iBeacons. Customers entering the store with the ShopKick app installed on their iPhone will be notified of the deals and items they may be interested in. Although there may be an annoying risk for shoppers, this type of accurate marketing can be very effective.

Further to increase the shopping experience in the store by scanning the barcode of the product right at the place of sale, introducing a suitable search, room status, product rating, and encouraging sales products.

In addition, the “Nordstrom” retailers in the United States, the establishment of touchscreen exchange information with the fitting room. You can get the goods by scanning the barcode, check the inventory of different colors and sizes. Everything can be completed only by touchscreen operation, one can enjoy a try without hesitation.

Amazon Locker

“Order online, pick up here” is a slogan in Amazon Delivery Box. Simple but enough to say it all.  

Amazon Locker is born as a service which permits customers to pick up their orders from a self-service location, accessible with a peculiar pick-up code.

It’s very convenient for customers who cannot guarantee they’ll be at a delivery location at a specific time and also saves on a trip to a depot the next working day.

This is also great for customers wishing to return goods who don’t have access to a post office or Collect+ location at a convenient time.

Conclusion

Building an O2O Business (or Omnichannel Business) to provide a seamless Online and Offline shopping experience for customers is the most crucial factor for all retailers today. So, synchronize eCommerce site and retail store is the best choice to solve this challenge and boost sales in both online-offline stores.

With our 6 tips, including Marketing Statics and Technology, I believe you can be easy to create your own plan to implement a perfect O2O strategy.

Don’t miss below guides in order to have better knowledge about O2O business.

» Omnichannel retailing: The Ultimate Guide

» A Breakdown of Online-to-Offline Business

» How to build an Online Store with Magento

» How to Start a Retail Store that complements an Online Business

If you have any question, feel free to comment. We are ready to answer for you.