Online to Offline, abbreviated O2O, refers to digital applications in retail that transform offline elements such as advertising material and the products themselves into digital sales areas.
Online to Offline O2O – Image: @shutterstock|Ribkhan
O2O, as a subfield of the Internet of Things (IoT), primarily focuses on solutions in the retail sector. Physical objects such as print ads, posters, catalogs, and the products themselves are transformed from a Point of Interest (POI) to a Point of Sale (POS) via a digital application. Amazon's Dash Buttons or those of the Swiss online retailer Brack are examples of online-to-offline solutions. These physical Dash Buttons allow customers to repurchase products with the push of a button. The corresponding business term for this type of order is replenishment. Replenishment currently primarily involves habitual purchases, mainly everyday consumer goods.
Point of Interest (POI)
“Place of interest”, literally “location of interest”. A term from marketing.
Points of interest (POIs) are sales points that are particularly important for product distribution. POIs can be used in various sales channels to promote a specific product. A POI is a location where potential customers learn about products from one or more suppliers, such as retail stores, trade fairs, public spaces (via a kiosk system), or at home (e.g., via the internet). Information is often conveyed through a multimedia system. With the increasing prevalence of e-commerce and the integration of ordering options, the POI is becoming increasingly synonymous with the point of sale (POS).
Point of Sale (POS) – Point of Purchase (POP)
The term "point of sale" refers to the location where the sale takes place. For the buyer (consumer), it is the point of purchase (POP), the place where the purchase is completed.
In the broadest sense, a retail location is the building or shopping center that houses a retail store. A visually appealing design of the building, its facade, and exterior signage (lettering, illuminated advertising) is crucial for long-range visibility and attracting potential customers from afar. In a narrower sense, the retail location refers to the store itself. From a design perspective, an inviting entrance, window displays, and the use of color and lighting are essential. The retailer aims to evoke positive emotions in the customer and awaken their intention to purchase the product through the presentation of goods in the window or at a point of contact (inside the store, on the shelf). The checkout area should not be visible from the entrance to avoid reminding the customer that they must pay for their purchase (positive feeling) (negative feeling).
The design of self-service stores aims to guide customers to the back of the store, ensuring optimal use of the entire space. Lighting design plays a crucial role in this: the brightness of the interior lighting must increase from the entrance to the back. Shelves are positioned according to specific plans that take customer flow into account. These plans are based on insights into consumer viewing behavior; for example, the right-hand corner just inside the entrance is considered a low-sales area, while areas directly in front of the customer are considered high-performing. Many additional shelves are seemingly placed "in the way"—they attract attention and lead to increased sales of the displayed merchandise.
The shelf layout refers to three levels of shelf height. The first (bottom) level is for direct sales. It is further subdivided into the optimal sales area, which is at the consumers' reach and eye level, and the bending and stretching area, which are less effective for sales. Products whose sales are to be promoted must be placed at eye level. The top "third level" serves to orient customers and includes signs and symbols indicating the products offered below. These include giant inflatable advertising displays, for example, a giant banana for the produce section or an oversized stuffed animal for the toy section.
The goal of POS (seller's perspective) or POP (buyer's perspective) displays is to encourage impulse purchases in the last minute before paying at the checkout. Products are placed additionally near the checkout (secondary placement) and not in their usual spot. The customer decides whether to buy a product, and an appealing and attractive presentation of the merchandise is essential. These points of sale are equipped and supported with displays, shelf stoppers, window stickers, demonstration and tasting stands, promotional boards, arrows, "rotairs" (movable posters suspended from the ceiling by a cord that rotate on their own axis), baskets, towers, floor stickers, and product push systems. Background music (instrumental pieces) played at a level just above the ambient noise and the use of scents have a supporting effect. A comfortable atmosphere, including appropriate temperature and humidity, is also used to encourage purchases.
In addition to these fundamental design elements, a positive atmosphere is increasingly being created during the shopping experience to suggest a sense of adventure. This development is particularly necessary in wholesale and retail to maintain a competitive edge. Frequently used elements of psychological stimulation include scenting, color schemes, and music at the point of sale.
The abbreviation 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 system used in retail where the barcode of the product sold at the checkout is scanned. The sale is then immediately compared with the inventory via a computer system. The individual product marked as sold is thus removed from the inventory, and the stock level is automatically adjusted.
