Insights for Entrepreneurs

Online to Offline Business Model: Benefits and Its Future

Glory Simmons

Insights for Entrepreneurs · 12 min read

online to offline business model

12 min read

Online to Offline (O2O) is an indispensable commerce strategy that protects all brick-and-mortar retail industries. Traditional retailers are highly worried about the growth of online commerce as it has made physical retail stores obsolete.

The new concept of O2O has given life to all physical retail stores. Many leading eCommerce giants like Amazon and Alibaba are also considering O2O’s strategy to be the future of eCommerce. If these popular brands find this concept to be promising then you can also escalate your business with the new O2O concept.

If you are a retailer struggling to compete in the market with your offline store, then it is time to learn about O2O commerce strategy and you need to implement them for your business. We will guide you to understand O2O and will let you know its benefits and its future in the market.

What is the online-to-offline business model?

The Online to offline business model is a unique commerce strategy that will drive all potential online customers to physical retail stores. This approach assures customers have a seamless digital experience in all stages of their purchase.

Retail stores use all digital platforms like social media channels, search engine optimization, content marketing, email marketing, and many more to identify their customers online. These customers are enticed to their physical stores to make purchases.

The working of Online to Offline business model

The O2O business model is very simple to understand. It will incentivize the customer to make orders through its online platform and will make them collect the same for its physical store. Customers can also return their products to the physical retail store.

In some countries, retail stores uses web-connected Kiosk machines installed with kiosk software that allow customers to have a digital experience to search, order products and to lock devices. This business model combines the benefit of both online and offline shopping and will deliver an excellent shopping experience to customers.

The Growth of the Potential Online to Offline business model – Future Trends

The future of Online to Offline business models has always been a great discussion among many entrepreneurs today. This is mainly because of its promising growth in the future. Customers who were obsessed once to buy online products are now eager to experience both online and offline shopping.

This change in consumers’ buying behavior has led to a clear path to the Online to Offline business model. Some of the interesting and convincing stats, that will prove the Online to Offline business model have a promising future, are listed below.

  • 70% of millennials prefer to buy products from physical stores although they have spent time online to know more about the product.
  • Buying Online, pickup in-store (BOPIS) service is being used by three-quarters of customers during the last six months.
  • In 2021, more than 50% of physical retail stores have supported curbside delivery.
    62% of customers have used Google search before reaching the physical store. They have visited the site to know about its location and also to check customer reviews.
  • 55% of consumers who are in physical retail stores still use their smartphones to search for product specifications before they make their purchase.
  • 47% of retailers place QR code machines in their physical stores, offering a convenient way for customers to pay online and leave without waiting in a long queue for paying their bills, thanks to a free online QR code generator. This will seamlessly blend the O2O shopping experience

O2O commerce examples

The most renowned eCommerce company, Amazon has placed its bet on Whole Foods and purchased the brick-and-mortar store for #13 billion in 2017. This shows that the brand has initiated to combine online and offline and started functioning with an online-to-offline business model.

This commerce clearly shows that Amazon is venturing into the physical space market. This trade has been added by purchasing 464 physical stores by the leading brand. This allows Amazon to use those outlets for order collection or order returns.

Another few examples of Online to Offline business model

  • The leading retailer Walmart acquired Jet.com for $3 billion in 2016 and has implemented an Online Offline business model.
  • Starbucks’ mobile order and pay will allow customers to place their orders from their mobile and collect their orders from nearby outlets.
  • Glossier, a leading beauty product, uses Instagram to attract clientele to its physical stores.
    The well-known eCommerce retailer Bonobos has launched a physical guide shop.

These examples are more than enough to prove how fast the Online Offline business model is getting into action and making its path in this competitive eCommerce industry.

Business Benefits of the Online to Offline business model

Although there are multiple eCommerce business models available in the market, the Online Offline business model is a newer concept. If you want to implement this model for your retail business then you need to know its business benefits that will help you to make sturdy decisions.

online to offline business model

Increases brand’s credibility

Having the Online Offline business model will make the brand gain better recognition. As potential audience keeps seeing the brand online, they get familiar with it. They can order online and can get them in the retail physical store instantly. This will enhance the brand’s credibility and in turn, increases sales and revenue.

Reduced delivery time

Ordering a product online and waiting for its door delivery will take a minimum of 2 days for the brand to reach the customer’s place. The easy and convenient buying process is what every customer expects from a retail store. The online Offline business model fills the huge delivery time gap by letting customers buy their ordered product in the nearby retail outlet. This gives a good customer experience.

Customers gain combined model benefits

The online to Offline business model is an enhanced eCommerce model that offers both online and offline product purchasing experiences to customers. The common rivalry between these two models can be easily eradicated through the O2O business model. Customers always want to be updated with technology and wish to use all the latest trends like online purchasing. Same time they cannot deny the fact that they wish to have the touch and feel of the product which they get by visiting a retail store. Both these wishes can be fulfilled with the Online Offline business model.

Stores get more footfalls

The major threat that any retail store faced when eCommerce started booming in the market, is the reduction in the footfall. People started showing interest in buying products online without visiting retail stores. This has reduced retail sales in any physical store. Only through the Online Offline business model, retail stores were able to get back their footfalls as usual and can get better sales in recent days.

Gain customer insights

Retail stores get clear insights about their shoppers. Customers who visit their site and don’t buy anything will still leave their trace of preferences on the website which will be collected and can be used by the store to offer special deals for them. Through proper marketing campaigns, they can grab the attention of their potential buyers and make them visit their platform and collect their details to understand their preferences.

Rapid order conversion

Die-hard shoppers always prefer a genuine touch experience that cannot be given by any on-screen product viewing experience. When a customer plans to buy a product online, he may need to spend more time to know more about that product. They need to check with customer reviews and finally, they make buying decisions. But with the O2O business model, they can just get the touch-and-feel experience and can make decisions easily.

Reduced shipping and return cost

The major demerit of using an online business model is customers may not get what they order. Some may differ in size, color, and other variants. This may lead to product returns often. Also, to deliver products to customers’ doorstep the company may face shipping costs. All these expenses can be reduced when customers visit the store to buy products.

O2O commerce strategies for retailers to implement

Let us check some of the popular Online to Offline business model strategies that will get you all the benefits that are listed above for your retail business.

Buy Online Pickup in Store (BOPIS)

BOPIS is a new retail concept that has become popular during the pandemic. People do not want to stay long in any retail store during the pandemic and so they order products online and will just visit the store to collect their orders. Offering in-store pickup is beneficial to both customers and retailers.

BOPIS uses the browsing capabilities of all online platforms and will give customers what they want instantly. Even same-day delivery cannot beat BOPIS’s strategy. This method assures retail stores get more footfalls and a better conversion rate.

In-store returns and exchanges

Online to Offline business model doesn’t only support the customer during the purchase but also supports them after purchase. 62% of consumers have mentioned that they prefer to buy online only when the brand allows them to return products to their store if it doesn’t fit their needs.

O2O business has an integral part in serving customers even after the product purchase. The return and refund processes are carried out simultaneously in the Online to Offline business model. This will give better service to customers and in turn, increases the brand’s reputation.

Pop-up stores

Pop-up stores are temporary physical stores that will give customers the best shopping experience. Opening a physical store is not an easy one for all retail owners. They may need to invest more in products to be stored in inventory, a physical space to run the business, and more expenses are there to be spent.

These pop-up stores will protect retailers from major financial risks as building a pop-up store is quite cost-effective. Retailers can run these stores in a rented place. Many startups business can check their business flow with these temporary pop-up stores.

Improve local SEO

This is a crucial approach for your Online to Offline business model. More than 67% of customers get to know about the brand only after finding them online. The top 3 to 5 websites that are listed on the search result page will get more traffic. Only these top-listed websites will get more order conversions.

This is possible only by focusing on local search engine optimization. Retailers should make sure that they have given their complete business details like address, contact number, email address, store photos, and many more. Companies with complete details will get more attention and customers will have trust in the brand and will visit the store easily without much difficulty.

Ways to optimize ‘online to offline business model’

In the buyer’s journey, customers keep shifting from online to offline easily. This is why the Online Offline business model is getting popular in recent days. To improve customer engagement, customer experience, and brand awareness we need to optimize the Online to Offline business model.

Allow a click-and-collect option on your platform

Many leading eCommerce brands have started providing this click-and-collect option on their platform and mobile applications. This simple option will let customers who want to visit physical stores choose and get an in-store experience by collecting orders from those stores.

Utilize advanced technologies

Many businesses are competing with the tough competition only by showing them unique to their customers. This is possible only when your platform inherits all the latest technologies. Many brands started using Augmented reality (AR) in their platforms which will let customers test digital products in their physical space. An interactive experience is gained by customers and will help them to make decisions on their purchases.

Use analytics and insights to offer personalization

Getting connected with the audience many times before they purchase with your brand is very essential for conversion. Your marketing campaigns should meet your audience’s preferences. This is where any offline business fails as they cannot collect customer data and their preferences. But with your platform, you can make use of those insights and understand what your customers prefer and can give better deals focusing on their interests.

Have a mobile-first approach

Consumers opt for mobile devices rather than their desktops for online purchases and other online activities. As per a survey, Americans spend more than 4.5 hours per day on their smartphones. Retailers can run campaigns focusing on customers’ devices and let them get often promotional messages that will create an urge to buy the product.

Align KPIs with online and offline marketing

To achieve your marketing goals, you need to focus on both online and offline marketing. The key performance indicators need to be linked with your Online to Offline business model. Identify the KPIs and need to spend wisely to get better returns. More than 47% of companies have started using their offline marketing tools to increase their online traffic. Likewise, 68% of companies use their digital platforms to promote brand awareness and increase store footfalls.

Have a flexible campaign

Nothing is permanent when it comes to customers’ buying behavior. They keep changing often and you need to plan your promotional campaign accordingly. Never stick to a particular keyword or KPI and promote the same. You need to analyze what currently your customers prefer and then you should frame your campaign.


Consumers have realized the importance of visiting physical stores and have started adapting to Online to Offline business models. Retailers should not ignore maintaining their physical stores as they may get a huge footfall in the coming days. To survive in fierce competition, one needs to go along with the trend changes and any latest revolutions in the retail market. The current revolution is Online to Offline business model, so, frame your business and get hold of your customers.

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Glory is a creative content writer whose writing has a deep connection with users and can provide SEO-friendly tech-driven content. Being a freelance content writer, all her writings meet the demands of any online business, solopreneur, start-up, and brand.