Capitalizing On The Digital Trail To The Offline Purchase
As more consumers adopt multiple devices, how do you make the most of digital to drive in-store sales? Columnist Adam Weiss explains how you can successfully develop an online-to-offline strategy.
As marketers, we hear it all the time: We need to understand the consumer journey. It’s impossible for legacy marketing metrics to keep up with the modern path-to-purchase, where consumers are exposed to several touch points through multiple devices and exhibit behaviors often inconsistent by category, or even by purchase history.
Affiliate marketing programs offer ways to identify and analyze consumer behaviors that lead to purchases — something that should be top-of-mind for all retailers, particularly as we draw closer to the most crucial shopping time of the year.
What’s fascinating is how important digital influences are to driving in-store sales. A recent report by Deloitte Digital revealed just how much online activities contribute to offline sales — get ready to have your mind blown:
- Digital interactions are expected to influence 64 cents of every dollar spent in retail stores by the end of 2015, or $2.2 trillion.
- Consumers who use digital while they shop in-store convert at a 20 percent higher rate compared with those who do not use digital as part of the shopping process.
- Nearly 8 in 10 consumers (76 percent) surveyed interact with brands or products before arriving at the store, and they are therefore making digitally-influenced decisions much earlier in the shopping process.
Retailers must capitalize on how their customers discover, research and evaluate products online to inform a smart advertising strategy before the holiday shopping madness begins.
How to do that isn’t as complicated as it sounds. Understanding the different types of online-to-offline models and some of the key attribution metrics associated will help you identify digital opportunities that can close the online-to-offline loop.
First Things First: What Is O2O?
Online-to-offline commerce, or O2O, as it’s commonly known, refers to a business model that utilizes online marketing efforts that affect a shopper’s interaction with a physical store. Pretty broad and all-encompassing, isn’t it?
It occurred to me that many marketers who read about the importance of incorporating an O2O strategy might have absolutely no idea what these strategies can entail or how to measure their effectiveness.
While there are many different models, I’ve chosen the primary examples you’ve likely already seen and used as a consumer.
Printable & Mobile Coupons
Snipping coupons from the newspaper may still be alive and well in some industries and demographics, but most consumers simply look to their daily email promotions to find discounts for in-store purchases.
These coupons contain individual codes that, once scanned, reveal the referring source and let retailers identify what promotions were most effective in driving in-store sales. This information can be analyzed in real time, since it is collected by the point-of-sale (POS) system.
The logical next iteration of the printable coupon is the use of mobile coupons. This is the same concept as above, but instead of printing them out on paper, consumers access their coupons via mobile device and scan them at the POS in the store. Coupon aggregator apps have become a virtual Sunday circular for tech-savvy shoppers.
Local offers refers to online direct-response services that drive customers to local retailers and service providers. Groupon is a great example of a company that drives transactions to local businesses.
While some local offers charge advertisers to be listed on their site, there is often a revenue-share model involved. Since the purchase is made online, tracking for these offers is automated and reported back to the physical store or provider.
Card-linked offers sound complicated but are actually quite simple. As defined in this Forbes article, digital coupons are loaded straight to a consumer’s debit or credit card. Consumers shop as usual, with no slowdown at the register or confusion about coupon redemption policies, and the discount is applied.
If you are a client of a major bank, you have likely opted in to their cash-back or rewards program for using your credit card at a particular retailer’s website or physical store.
By completing your purchase, you are awarded points for air fare, shopping credits, cash-back or other similar offers. To make these offers available, your bank likely works with third-party companies.
The benefits for all parties involved are fairly obvious. Merchants can use banks to attract new customers, track the performance of the offer, and in return, pay a commission to the bank or loyalty program for offers redeemed. Consumers don’t have to worry about finding coupons on their mobile devices or printing them out prior to the purchase.
Location-based rewards primarily run on apps and let a merchant, or one of its partners, geo-target shoppers by location, sending them deals or points for walking into a brick-and-mortar location.
For example, you’re browsing around your favorite cosmetics store and receive an alert on your phone offering a 10-percent-off coupon. Naturally, this alert from your mobile app will entice you to buy the products you’ve got an eye on.
A variation of the model involves the user taking a specific action. This type of location-based or loyalty program rewards consumers when they “check in” to an offline store.
This model has evolved down to the merchant level, offering gift cards, prizes or discounts for advertising your location through social media properties. Free beer for checking into my favorite bar? Done.
There are services to help brands target, personalize and measure marketing messages by matching the data from online marketing campaigns to their internal customer relationship management (CRM) databases. This allows marketers to customize content and ads delivered to current customers or accurately reach potential customers who fall within its key target audience.
For example, CRM matching can entice offline purchases through in-store offers and discounts, then analyze which promotions are the most successful at driving which types of shoppers to physical stores.
With all the options to consider when developing an O2O strategy, choosing the right mix can seem overwhelming. Also, it’s not a set-it-and-forget-it strategy: To ensure success, programs must be frequently measured and evaluated and appropriate shifts made.
Luckily, most affiliate networks that work directly in the cost per action (CPA) space have established relationships with the third-party providers, like apps and loyalty sites, so O2O strategies can be easily integrated into your existing marketing mix.