The O2O trend

Jack Dikian

January 2012

Back in 1998 I become involved in providing strategic consulting to a small Sydney based e-tailing firm (those that know me know the firm). Back then internet business models were less well defined, building technology platforms from scratch was common, and whilst we knew that even large prime movers such as Amazon weren’t turning in a profit (and the internet bubble burst thing was still happily a few years ahead of us), we nevertheless, thought had some novel differentiation.

One of the big ideas was to forge symbiotic relationships with what (at the time) was called brick and mortar (read that as established shops and businesses) and the online services. For example, you might see our marketing material in a participating store, you might return goods purchased online to a local store, and so on. It’s important to note, these weren’t our stores. Just established business that saw value in integration with an on-line store.

The reason I’m writing this is because 13 or 14 years on Australians spend close to $25billion per annum on the net. Almost 40% of bought products on the net in 2011 and online sales are expected to grow 9% annually by 2012. If only we hung in…

The other reason, and, perhaps the more relevant one is the emerging trend for O2O over the next couple of years. O2O is the idea that small business use the internet (Online) to drive people into their traditional stores (Offline). People will agree that the in-person experience (at least across a variety of products) is the ultimate competitive advantage small businesses have. The O2O approach might see small business re-position themselves against the internet offensive.