As Big Data and Internet of Things (IoT) technologies speared out nowadays, Online-to-Offline (O2O) will become the predominant business model. Then, what is O2O? It is a business strategy that drives potential customers from online channels to physical stores. O2O identifies customers’ insights from the online channels such as email and online advertising opt-in, and then uses a variety of tools and approaches to drive the customer to the physical store for more and effective sales. This type of strategy incorporates techniques that have been used in online marketing within brick-and-mortar marketing. 64% of American adults now own a smartphone of some kind, up from 35% in the spring of 2011. This O2O integrated marketing strategy will become mobile-centric, not mobile-first anymore. Most of the cases, mobile users log on to their mobile devices all the time and are connected to things. So, collecting data of who, where, what, and how customers go and expense is possible.
Web banner replaced traditional offline advertising. Search engine created a new market for advertising. And, mobile is taking a chunk of advertising market with practical customer insights. Our question is how physical commerce can communicate with customers in the mobile market.
One of the successful cases stories of Nike is Nike Fuelband. From the everyday wearable devices, Nike can collect customers’ behavior data sources and use the data to gain insights for various marketing strategy. Certainly, the data-driven marketing strategy will be more effective to their niche customer because the insights of loyal opt-in customers have higher chances to convert into sales. Disney also uses wristband as hotel room key and payment system. This unique and convenient technology improves user experience and increases satisfaction in Disney, and more importantly communicating and understanding customers.
Major developments in the IoT industry is using Beacon hardware together with mobile apps to conduct Big Data analyses. Beacon allows customers in the store connecting a smart phone to Wi-Fi access points. The industry is not completed adopted the technology, but with more beacon hardware being installed shortly, more customer insights will be gained. With current technology, we can understand customers of who, where, and how information. However, more important part is why. To explain why or so what factor, either small or big data, data is the key. The data contains insights of what customers are interested in.
It is good news for data scientists, but it will be still facing various challenges such as the lack of case studies. Although tech startups have to gain the trust of large retail business, there are still not micro-location systems being installed.
World Wide Web allows people to search anywhere, and the smart phone makes that technology personal. IoT and O2O will allow them connected and automated. In the future, data science techniques to create insightful metrics and KPI from the extracting data will play very important role and will be the key to success.