Online to Offline – O2O

Published on: September 21, 2020 / Update from: September 21, 2020 - Author: Konrad Wolfenstein

Online to Offline, abbreviated O2O, refers to digital applications in retail that transform offline points such as advertising material and the products themselves into digital sales areas.

Online to Offline O2O – Image: @shutterstock|Ribkhan

O2O, as a sub-area of ​​the Internet of Things (IoT), is primarily concerned with solutions in retail. Physical objects such as print advertisements, posters, catalogs, the products themselves are transformed from a point of interest (POI) to a point of sale (POS) via a digital application. The Dash buttons from Amazon or the Swiss online retailer Brack are examples of online to offline solutions. The physical Dash buttons allow products to be purchased at the push of a button. The corresponding business term for this type of order is replenishment. Replenishment currently primarily focuses on habitual purchases. This primarily includes everyday items.

Point of Interest (POI)

“Place of interest”, literally “place of interest”. A term from marketing.

POIs are sales points that are particularly important for selling products. The POIs can be used in various sales channels to promote sales of a specific product. POI refers to a place where interested parties can find out about products from one or more providers, e.g. E.g. trade, trade fairs, public places (via a kiosk system), at home (e.g. via the Internet). A multimedia system is often used to convey information. Due to the increasing spread of electronic business and the integration of ordering options, the POI is increasingly identical to the point of sale (POS).

Point of Sale (POS) – Point of Purchase (POP)

The term “place of sale” means the place where the sale is completed. For the buyer (consumer) it is the point of purchase (POP). So the place where the purchase is made.

In the broadest sense, a retail location is the building or shopping center in which a retail store is located. A visible design of the building, the facade and the outdoor advertising (labeling, illuminated advertising) is important in order to achieve a long-distance effect and to address potential customers from afar. In the narrower sense, the sales location is the shop itself. In terms of design, an inviting entrance design, shop window design, color and lighting design are important. By presenting the goods in the shop window or at a contact point (in the store, on the shelf), the provider wants to trigger positive emotions in the buyer and arouse the intention to buy this product. The checkout should not be visible from the entrance area so as not to remind the customer that they have to pay for their purchase (positive feeling) (negative feeling).

The purpose of self-service store design is to direct the customer to the back of the store so that the entire space is used optimally. The lighting design is important for this: the brightness of the interior lighting must increase from the entrance to the rearmost area. The placement of the shelves is carried out according to special plans that take into account the running logic. These plans are based on findings about consumers' viewing behavior; for example, the right corner behind the entrance door is considered to be very weak for sales and all areas that are directly in front of the customer are considered to be high for sales. Many additional shelves appear to be “in the way” – they stand out and lead to increased sales of the goods presented.

The level design refers to three levels of shelf height. The first (= lowest) level is used for direct sales. It is further divided into the optimal sales area, which is at the consumer's gripping and eye level, as well as the bending and stretching area, which are inherently weaker in sales. Goods whose sales are to be promoted must be placed at eye level. The top “third level” serves to orient customers and contains information signs and symbols about the goods offered below. These are huge advertising media inflated with air (inflatable giants), for example a huge banana for the fruit department or an oversized stuffed animal for the toy department.

The aim of the POS (seller's perspective) or POP (buyer's perspective) is to encourage spontaneous purchases in the last minute before paying at the checkout. Goods are also placed in front of the checkout (secondary placement) and not at the regular location. The customer decides whether to purchase a product and a pleasant, attractive display of the goods is necessary. The sales points will be equipped with displays, “shelf stoppers”, window stickers, demo and tasting stands, promotional boards, arrows, “rotairs” (moving posters that hang from the ceiling on a string and rotate on their own axis), baskets, towers , floor adhesives, goods pushing systems equipped and supported. Background music (instrumental pieces) and “scents” that are just above the prevailing noise level have a supporting effect. Likewise, “feel-good climate” such as temperature and suitable humidity are used to determine the willingness to buy.

In addition to these basic design elements, a positive atmosphere is increasingly generated when shopping to suggest a feeling of experience when shopping. This development is particularly necessary in wholesale and retail in order to maintain a competitive advantage. The frequently used elements of psychological stimulation include scenting, color design and music at the POS.

The short form POS stands for both “Point of Sale” and “Point of Service”, although the distinction between the two can sometimes be unclear.

Electronic Point of Sale (EPOS)

A further development of the POS is the Electronic Point of Sale (EPOS). This is a retail system in which the barcode of the product sold at the checkout is scanned. The sale is then immediately compared with the warehouse via a computer system. The individual product marked as sold is removed from the inventory and the stock level is automatically corrected.