What is the difference between OMO and O2O? Also explains the difference from omnichannel

What is OMO?

Mobile payments are so deeply rooted in China’s culture that “you can survive with just one smartphone.” In urban areas, almost 100% of smartphones are used, and due to the low reliability of cash and counterfeit bills, mobile payments have become commonplace, making it possible to pay not only utility bills but also payments at food stalls and even various fines. You can pay with just one smartphone.

China is one of the countries in the world where online and offline collaboration is the most advanced. OMO is a marketing strategy that focuses on eliminating the increasingly blurred boundaries between the two and creating a highly consistent UX (customer experience).

For example, by scanning the QR code attached to a product at a supermarket in a city, you can check detailed product information and customer reviews on the spot. As a result of this action, data such as viewing a product in a physical store, looking up detailed information, and checking reviews is linked to an individual ID and accumulated. In addition, all kinds of consumer behavior can now be used as data, such as shopping done using smartphone apps, sale information viewed, mobile payments made at physical stores, and items purchased.

Rather than analyzing vast amounts of accumulated consumer data as specific segments, we analyze all data linked to individual IDs to understand each consumer’s preferences and conduct appropriate One-to-One marketing. Measures can now be rolled out. In this way, OMO creates a highly consistent UX regardless of whether the consumer’s behavior is online or offline.

Differences between O2O and omnichannel

O2O (Online to Offline)

O2O is a marketing strategy that separates the two worlds of online and offline and encourages communication between the two. In other words, it is not as tightly coupled as OMO, but rather loosely coupled. For example, by distributing coupons that can be used at physical stores to users who visit an e-commerce site, we can guide them from digital to physical activities. These marketing measures have been in place since before smartphones became widespread, and have exploded in number since around 2013.

omnichannel

Omnichannel is a policy that integrates all sales and distribution channels, including physical stores, e-commerce sites, catalogs, call centers, and SNS, to connect with consumers at various points. By centralizing ID information and inventory information across different channels, consumers can purchase and receive products from any channel without worrying about the sales channel.

Difference between OMO and O2O/Omnichannel

O2O and omnichannel “separate online and offline” and then link different channels together to encourage consumer purchasing behavior. In other words, it is a measure from a company perspective. On the other hand, OMO is a measure that integrates the two worlds based on digital data accumulated both online and offline. OMO’s greatest feature is that we design our business not only around the consumer purchasing process, but also around all aspects of UX.

Alibaba’s OMO case study

In China, Baidu, which has the top share in search engines, Tencent, which operates web services such as WeChat, and Alibaba, which operates the largest malls in China’s e-commerce market, such as Tmall, are known as the three largest internet companies. Among these, Alibaba-funded supermarket Farmer Sheng is one of the stores that promotes OMO the most in the world. We provide a high-quality customer experience through advanced services that combine physical stores and online services.

Smooth shopping with mobile payments

At Hema Sensei, payment is completed by using a smartphone app and swiping the product’s barcode over the unmanned cash register. There are examples of smart stores with unmanned cash registers in Japan, but stores that can be used on a daily basis are overwhelmingly more popular in China.

Providing unprecedented added value from apps

With Hema Sensei’s smartphone app, you can check the entire history of a product from its production area to its arrival at the store by reading the QR code attached to the product. Furthermore, it is encouraging new purchasing behavior among consumers, such as being able to view recipes in videos and purchase all the other ingredients and seasonings needed to make that dish. By using Hema Sensei’s smartphone app, you can enjoy an experience of “fun” in addition to a sense of security with unprecedented added value.

Comfort as a physical store

Hema Sensei takes great care to create stores that consumers can enjoy, and compared to other supermarkets, the store is clean and has a wide selection of products. There is also a fish tank that sells fresh fish, and an eat-in space where the ingredients are prepared and served on the spot. What supports the creation of an attractive store is that it feels like a supermarket where you can have a high-quality experience, rather than just a place to buy ingredients.

Home delivery available within 3km

If you order a product using the Hema Sensei smartphone app, we also offer a service that will deliver it within 30 minutes if you are within 3 kilometers from the store. If you use the app to purchase a product that you have actually seen in your hands, the product will be delivered within 30 minutes even if you go home empty-handed, making shopping even more convenient.

Will OMO become popular in Japan?

The reason behind the penetration of OMO in China is firstly the overwhelming popularity of mobile payments. Cashless payments are also expanding in Japan, and although the cashless penetration rate in Japan is on an upward trend with an annual growth rate of 6.7%, it was 21.3% as of 2017 . In China, this number remains overwhelmingly low compared to advanced cashless countries.

However, the proportion of cashless payments is steadily increasing, and OMO has an “after-digital” concept in which “digital will swallow up real in the future.” This allows offline data to be linked to online individual IDs, allowing all consumer data to be managed.

By considering OMO measures based on this after-sales data, OMO is now possible even for Japanese companies. Also, at OMO, it is important to be “thoroughly UX-oriented.” Rather than separating sales and distribution channels from a corporate perspective, we can provide innovative products and services by thinking from a consumer perspective and designing a highly consistent UX. Why not take this opportunity to think about OMO measures for your company?